Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
The story below is factual and accurate: A Broker did not reflect a $5 million real estate offer. I created Nestapple 2 years ago, and I have repeatedly heard, “I don’t like dealing with brokers,” “I’ve had a bad experience with a broker before,” and “All real estate agents are the same.” Above all, I’ve heard everything. My answer has been consistent: every profession has good and bad brokers.
As a result, our issue is not with designated brokers personally but with the industry itself. The real estate sector is outdated and inefficient. I need to share the TRUE story of what recently happened to us. I will refrain from giving names and addresses to protect our client and potentially not damage an ongoing investigation.
Buyer A was searching for a home. He had a healthy budget and was a very savvy client. He found an apartment in the city that met his family’s needs. Therefore, they attended an open house.
Remember: a person can visit an open house unrepresented. He spoke to the listing broker and asked questions. The exchange between Listing Broker and Buyer A was not discussed if he had representation.
Buyer A reached out and asked us to represent him. We decide to make an offer.
Next, I introduce myself to the Listing Agent (the most unprofessional-broker-ever). I get some initial pushback about not attending the open house, wholly unrelated and insignificant. I informed her we were working on an offer and would receive one soon. The asking price was $5,800,000.
Yes, it is not a complete full-ask offer. We were $500k apart, but it was a reasonable offer. After all, we provided all relevant supporting material: proof of funds and a pre-approved letter. That means the request was complete and severe and came from a legit and committed buyer.
The Listing Agent responded. She said our real estate offer was insulting and too low, and the seller won’t even counter.
She has the exclusive right to sell the unit, and it’s not among open listings.
Her response didn’t make any sense. A very peculiar property on the market for months receives a legit offer, and the seller doesn’t respond or counters? Something didn’t smell right, and I asked for an acknowledgment offer.
In other words, I wanted proof of the reflection of my real estate offer; the seller’s Broker said no. This is a violation of all real estate laws.
Fast-forward to a few days and the Listing Agent contact Buyer A (my client) directly. A clear violation of the ethics code since both brokers are members of REBNY. My clients notify me, and I remind Listing Agent that we represent them.
Any further communication should go through us. NY State regulations also prohibit this behavior:
“No real estate broker shall negotiate the sale, exchange, or lease of any property directly with an owner if he knows that such owner has an existing written contract granting exclusive authority in connection with another broker.”
After discussing potential renovations and trying to make the number work, my client lost interest and moved on. In conclusion, they no longer want to move forward.
Months pass, and the property returns to the market with a new reduced price of $4,800,000. Now, there is a new listing agent, which is very suspicious. We contacted the seller directly since Listing Agent no longer has the exclusivity agreement. We asked if she had received our real estate offer from months ago for $5,300,000, and unfortunately, our suspicions were confirmed: the seller never received our real estate offer.
For instance, it costs the Seller millions in an eventual sale. In addition, it has also limited my Buyer’s possibility of buying a home and prevented my earned commission.
Why did she do it? Unclear. Maybe she didn’t want to share a potential 6% commission if the Buyer was un-represented? We will never know.
The seller is unsure about pressing charges or filing a claim against the Attorney General, so we are considering our options. Stay tuned as the saga unfolds. However, what is accurate is that the Broker did not reflect a 5 million dollar real estate offer.
In conclusion, this is a story to share for the future with buyers and sellers and remind them of the concept of exclusive agency listings.
The listing broker must provide written affirmation that the offer was presented to the seller or that the seller waived the obligation to have the offer given.