Joined May 2010
L8: Grand Teacher
Forum Thread
Should I sue my real estate agent? or do I have a case.
April 13, 2023 at
03:31 PM
Thread Details
Long story short.
I know nothing about real estate or agents. Never owned a home.
So I saw a place on Zillow. I contacted the agent (seller's agent) and asked to look at the place. He accommodated and I liked it. He told me 8 people saw it already (this is day 2 of the listing) and that he will be holding back all offers until day 4. After that he (the owner's wishes) won't be taking any more offers.
I'm ok with that and the next day (Day 3) I tell him I'll offer the asking price. He said that's fine and he can write up the offer for me. Seems simple enough so I get docusigned papers for the full asking with only a septic inspection. I notice he's also listed as my agent so I guess he would get both commissions. I'm ok with that to be honest and he seemed nice enough to show me the place.
So I'm excited. But that all falls apart when 2 days later (day 5) I get a txt from the agent saying the seller went with a "higher" offer.
Now I'm annoyed to put it mildly. If I was told that higher offers were required then I would have at least been aware to make that decision. I would have gone up to 10% higher. And since he was the seller's agent he would have known all the offers...so I'm scratching my head wondering why he was ok with my "lower" offer. Especially now in retrospect he wa technically my agent and should have looked out for my best interests/desires. This was a unique property an I doubt it'll come up again. Plus I'm not young anymore.
I feel like I was swindled somehow; or at least deceived. And most of all I've missed out on the home.
So I'm looking for a way to recoup my sense of loss on the matter.
Do I have any case against the agent for damages of losing the home?
Thanks
I know nothing about real estate or agents. Never owned a home.
So I saw a place on Zillow. I contacted the agent (seller's agent) and asked to look at the place. He accommodated and I liked it. He told me 8 people saw it already (this is day 2 of the listing) and that he will be holding back all offers until day 4. After that he (the owner's wishes) won't be taking any more offers.
I'm ok with that and the next day (Day 3) I tell him I'll offer the asking price. He said that's fine and he can write up the offer for me. Seems simple enough so I get docusigned papers for the full asking with only a septic inspection. I notice he's also listed as my agent so I guess he would get both commissions. I'm ok with that to be honest and he seemed nice enough to show me the place.
So I'm excited. But that all falls apart when 2 days later (day 5) I get a txt from the agent saying the seller went with a "higher" offer.
Now I'm annoyed to put it mildly. If I was told that higher offers were required then I would have at least been aware to make that decision. I would have gone up to 10% higher. And since he was the seller's agent he would have known all the offers...so I'm scratching my head wondering why he was ok with my "lower" offer. Especially now in retrospect he wa technically my agent and should have looked out for my best interests/desires. This was a unique property an I doubt it'll come up again. Plus I'm not young anymore.
I feel like I was swindled somehow; or at least deceived. And most of all I've missed out on the home.
So I'm looking for a way to recoup my sense of loss on the matter.
Do I have any case against the agent for damages of losing the home?
Thanks
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If the seller for whatever reason just basically told his agent (also your agent) to go with the highest bid by date X, it is end of game. In my experience, buyers usually have to worry more about unscrupulous agents who will claim there is a higher offer (whether there is one or not) in order to jack up the price and their commission in a seller's market than the case potentially here, but it is what it is. Most sellers don't restrict themselves like that and will try to get a bidding war going if possible though.
I would suggest just moving on as such and not harping on it. Get yourself your own agent as well. Real estate agents have reputations just above used car salesman and lawyers imo, so generally get one that ideally is working for you (though in reality they almost all are paid completely by the seller so they really are not in the end looking out for your interest imo). Never tell your agent what your max price is (as that will guarantee that is where you end up at lol) and never act too hot for a house no matter how much you like it because they will read that and try to get you to come up more. In the end the only thing real estate agents care about is their commission. They will try to get a seller to come down to meet a buyer's price if the market is cold and play games to get the max price possible in a seller's market.
My 2 cents.
Now they never accepted your offer so you are not out anything and have no loss. I am not sure about your state but I have seen where people will put in an offer that says I will offer 2K more than the highest offer up to X dollars so you bid 100K but will go to 120K but only 2K more than another offer up to 120K.
If you are going to buy a hose you need to educate yourself and look and see if your state has buyers agents where you pay them and they work for you.
Real Estate agents are no different than car salesmen, they make you feel they are on your side against the manager but the manager pays their salary.
You really need to do a lot of research when making an offer on a house and waive inspections too. The inspection is used more as a bargaining chip to get a lower price or to walk away if you find a major issue.
We looked at a house years ago and many of the windows did not open properly. On the face of it, it could be a minor issue, well the whole house had shifted due to the soil and that was why the windows did not work. We walked away very quickly, there is also some electrical panels that had an issue and are dangerous.
Radon gas can kill you if you are going to be using your basement in some areas of the country.
You were very lucky and should be very grateful the house fell thru.
I told him don't be surprised your offered wasnt even shown kind of sucks getting people like that honestly.
Seems simple enough so I get docusigned papers for the full asking with only a septic inspection.
2 days later (day 5) I get a txt from the agent saying the seller went with a "higher" offer.
If I was told that higher offers were required then I would have at least been aware to make that decision.
I would have gone up to 10% higher. And since he was the seller's agent he would have known all the offers
Tell them you would like to give them a backup offer if that's okay. Have the offer ready with the amount blank.
If that's not your style. Drop an offer in their mailbox. You love their house and would be honored to pay xyz.
Or, go to another agent. It's not unusual for houses to fall out of escrow.
as soon as possible.
RE agents don't have much incentive to hold out for the highest price.
Depending on where you live, commission can often be 5%.
E.g. Asking Price $500k
$500k sale price = 25,000 Commission
$550k sale price = 27,500 Commission
By the time an agent pays an office fee, broker/owner fee. $2,500 split between two agents is almost negligible.
Most will take the $25,000 and run.
I know nothing about real estate or agents. Never owned a home.
So I saw a place on Zillow. I contacted the agent (seller's agent) and asked to look at the place. He accommodated and I liked it. He told me 8 people saw it already (this is day 2 of the listing) and that he will be holding back all offers until day 4. After that he (the owner's wishes) won't be taking any more offers.
I'm ok with that and the next day (Day 3) I tell him I'll offer the asking price. He said that's fine and he can write up the offer for me. Seems simple enough so I get docusigned papers for the full asking with only a septic inspection. I notice he's also listed as my agent so I guess he would get both commissions. I'm ok with that to be honest and he seemed nice enough to show me the place.
So I'm excited. But that all falls apart when 2 days later (day 5) I get a txt from the agent saying the seller went with a "higher" offer.
Now I'm annoyed to put it mildly. If I was told that higher offers were required then I would have at least been aware to make that decision. I would have gone up to 10% higher. And since he was the seller's agent he would have known all the offers...so I'm scratching my head wondering why he was ok with my "lower" offer. Especially now in retrospect he wa technically my agent and should have looked out for my best interests/desires. This was a unique property an I doubt it'll come up again. Plus I'm not young anymore.
I feel like I was swindled somehow; or at least deceived. And most of all I've missed out on the home.
So I'm looking for a way to recoup my sense of loss on the matter.
Do I have any case against the agent for damages of losing the home?
Thanks
I've been burned by many real estate agents. Actually every one that I've dealt with has been either incompetent or completely devoid of ethics, or both. Other responders to your post were overly generous when comparing real estate agents to used car salesmen or lawyers.
Over 40 years, I've bought and sold several homes without an agent. For the few times that I used an agent, the experiences were terrible. I much prefer dealing directly with owners/buyers and find them to be WAY more honest than agents. Don't believe the real estate hype that you must use an agent. Especially in todays environment where info is accessible online, you can do this yourself. In every situation of mine where agents were involved, I found that I did more research and was knowledgeable than the agents who claimed to be experts.
If this is too scary, do your research and engage the right person as the buyers agent so that they have a legal and financial obligation to look after your interests.
No doubt my post will bring an avalanche of opposing and venomous opinions but know that I am not a professional real estate person with any financial interest. Just someone like you that's been down the same road as you and wish to help you avoid some headaches.
In the meantime, enjoy this quote from Upton Sinclair and think about how it can apply to unscrupulous real estate agents.
"It is difficult to get a man to understand something, when his salary depends on his not understanding it."
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I appreciate it all came together quickly for you but I wouldn't be using the same agent as the seller, just seems basically impossible for that person to have both of your best interests at heart simultaneously.
I abhor RE agents. Not personally, but the fact that they exist. As a seller you're eating 5-8% for people to do paperwork. Hear me out - yes there is some value in that, but the work required to do all this shuffling does not scale with the home. Does a $400k home take twice the amount of effort as a $200k home? No? Then why do the RE's get twice the pay? Unfortunately the system is stacked with lots of landmines that make navigating it tough for the seller if they choose to FSBO, and these listings are looked down upon by RE agents. It's very much a cabal.
I appreciate it all came together quickly for you but I wouldn't be using the same agent as the seller, just seems basically impossible for that person to have both of your best interests at heart simultaneously.
I abhor RE agents. Not personally, but the fact that they exist. As a seller you're eating 5-8% for people to do paperwork. Hear me out - yes there is some value in that, but the work required to do all this shuffling does not scale with the home. Does a $400k home take twice the amount of effort as a $200k home? No? Then why do the RE's get twice the pay? Unfortunately the system is stacked with lots of landmines that make navigating it tough for the seller if they choose to FSBO, and these listings are looked down upon by RE agents. It's very much a cabal.
The seller's agent is the biggest waste of them all imo since they get paid 2-3% for doing very little. They write the listing in the MLS, have some photographer come over and take some pics and maybe do an open house. For that they get 2-3% of the value of the sale. The buyer's agent actually has to bring clients in to show the place and that is hit or miss but the seller's agent is basically doing a few hours worth of "work" if that.
The whole industry could be replaced with an online listing portal and some title company\real estate attorney supervision imo and save everyone a lot of money, but that will never happen.
If you did sign an agreement of representation, then the realtor would likely have functioned as a dual agent.
https://www.realtor.com/advice/buy/dual-agency/
"A dual agent is supposed to be neutral, helping clients on both sides of the deal equally."
"Also, since a dual agent works for both buyer and seller, he must tread carefully not to betray the confidence of either party. So, he might stay mum about juicy tidbits that you might have more easily learned if you'd had your own agent in your corner."
The agent can't go and leak to you what the highest offer is, or that your offer was not the highest, because that could end up being to the detriment of the seller. What if one of the buyers doing dual agency is colluding with the highest bidder? The agent tells the dual agency buyer what the highest bid is, and the dual agency buyer tells the other buyer they are the highest bidder, and so the highest bidder decide to lower their bid? That would be to the detriment of the seller. It's best the dual agent gives each side as little information as possible, so that the transaction happens as if there was a separate buyers agent.
It's likely the agent presented all offers to the seller, and the seller decided they were happy with the highest and didn't want to do a second round of bids.
It's generally a bad idea to use a dual agent. The agent cannot fight for you the way a buyers agent can. Next time, get your own agent.
And getting into a bidding war is dumb.
I would not get involved in a bidding war myself it seems many winners actual never close the sale. I had low bid a home and someone else had a higher bid but they had issues and the seller contacted my agent and said they would take my lower offer.