A Real Estate Broker did NOT reflect a $5mm offer (2019)
Go Back To Previous PageThe 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 The real estate sector is outdated and inefficient.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 happened to us recently. I will refrain from giving names and addresses to protect our client and to avoid damaging an ongoing investigation.
Buyer A was searching for a home. He had a healthy budget and was a 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 without a buyer’s agent. He spoke to the listing broker and asked questions. The exchange between Listing Broker and Buyer A was not discussed, whether he had representation.
Buyer A reached out and asked us to represent him. We decided to make an offer.
Next, I introduce myself to the Listing Agent (the most unprofessional broker ever). I received some initial pushback about not attending the open house, which was wholly unrelated and insignificant. I informed her that we were working on an offer and that we would receive one soon. The asking price was $5,800,000.
Million-dollar real estate: Our real estate offer price was $5,300,000.
Yes, it is not a complete full-ask offer. We were $500k apart, but it was a reasonable offer. It was not a low-ball 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 it came from a legit, committed buyer.
The seller’s agent responded. She said our real estate offer was insulting and too low, and the seller won’t even counteroffer.
She has the exclusive right to sell the unit, and it’s not listed as an open listing.
The managing Broker did not reflect a $5 million real estate offer.
Her response didn’t make any sense. A peculiar property, on the market for months, receives a legitimate offer, and the seller doesn’t respond or counter? Something didn’t smell right, and I requested an acknowledgment offer.
In other words, I wanted proof of the reflection of my real estate offer; the seller’s Broker said no. This violates all real estate laws.
Fast-forward to a few days, and the Listing Agent contacts Buyer A (my client) directly. A clear violation of the ethics code, since both brokers are REBNY members. My clients notify me, and I
remind the Listing Agent that we represent them.
Any further communication should go through us. NY State regulations also prohibit this behavior:
§175.8 NEGOTIATING WITH PARTY TO EXCLUSIVE LISTING CONTRACT
“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 we discussed potential renovations and tried 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 suspicious. We contacted the seller directly since the Listing Agent no longer has the exclusivity agreement. We inquired about her receipt of our real estate offer from months ago for $5,300,000, and unfortunately, our suspicions were confirmed: the seller had never received our offer.
Therefore, the Listing Agent’s illegal and unethical behavior had drastic consequences.
For instance, it costs the Seller millions in an eventual sale. Additionally, it has also limited my Buyer’s ability to purchase a home and prevented me from earning my commission.
The Broker did not reflect a real estate offer.
Why did she do it? Unclear. Maybe she didn’t want to share a potential 6% commission if the Buyer was unrepresented? We will never know.
The seller is unsure whether to press charges or file a claim with the Attorney General, so we are considering our options. Stay tuned as the saga unfolds. However, it is accurate that the Broker did not reflect a $ 5 million real estate offer.
In conclusion, this is a story to share with future buyers and sellers, reminding them about 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 receive the offer.
Georges has been working in Wall Street for the last 16 years trading derivatives with hedge funds. He has been an active real estate investor for over a decade. Georges graduated from HEC Business School in Paris and holds a master in Finance from ESADE Barcelona.
