The Nest

NestApple's Real Estate Blog

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.

A Broker did not reflect a $5 MILLION DOLLAR OFFER

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A Broker did not reflect a $5 MILLION DOLLAR OFFER: This is a true story. Ever since Nestapple was created I’ve been repeatedly told; “I don’t like dealing with brokers”, “I’ve had a bad experience with a broker before“, “All brokers are the same” and so on. I’ve heard it all.

My answer has been consistent: there are good and bad brokers like in every profession; our issue is not with brokers personally but with the industry itself and how outdated and inefficient it has become.

Having said that I need to share the story, TRUE story of what recently happened to us. To protect our client and potentially not damage an ongoing investigation I will refrain from giving names and/or addresses.

A Broker did not reflect a $5 MILLION DOLLAR OFFER: TRUE STORY

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 and they attended an open house. Remember: a person can attend an open house unrepresented. He spoke to the listing broker, asked questions and his representation/or lack thereof was never mentioned nor discussed.

We confer with Buyer A (our client) and decide to make an offer.

Next I introduce myself to the Listing Agent (aka the-most-unprofessional-broker-ever). I get some initial push back about not attending the open house; completely unrelated and insignificant. Asking price was $5,800,000. Our offer was for $5,300,000.

Yes, not full ask. Yes, $500k apart but it was a good offer, with supporting material (proof of funds and pre-approved letter) and it came from a legit and committed buyer.

Listing Agent tells me our offer is insulting and too low and seller wont even counter.

Her response didn’t make any sense: a pretty peculiar property that’s been sitting on the market for months receives a legit offer and the seller doesn’t even respond nor counters? Something didn’t smell right so I asked for an offer acknowledgement. This means I wanted proof that my offer had been presented: Listing Agent said no.

Fast-forward to a couple of days and Listing Agent contacts Buyer A (my client) directly. Clear violation of ethics code since both brokers are members of REBNY. My clients notifies me and I remind Listing Agent that we are representing them and 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 or lessor if he knows that such owner, or lessor, has an existing written contract granting exclusive authority in connection with such property with another broker.

After discussing potential renovations, trying to make number work and future due diligence my client loses interest and moves on.

Months go by and we notice the property goes back on the market for a reduced price of $4,800,000 and with a new listing agent. Suspicious. Since Listing Agent did no longer have the exclusivity agreement we contacted the seller directly. Casually we asked if she had received our offer from months ago for $5,300,000 and unfortunately our suspicions were confirmed: seller never received our offer.

The illegal and unethical behavior of the Listing Agent cost the Seller millions of dollars, limited my Buyer the possibility of buying a home and prevented my earned commission.

Why did she do it? Unclear. Ego? Didn’t want to share a potential 6% commission if the buyer was unrepresented? We will never know.

The seller is unsure about pressing charges or file a claim against the Attorney General. We are considering our options. Stay tuned as the saga unfolds. What is accuate is that Broker did not reflect a $5 million offer



Georges Benoliel Founder of NestApple - NestApple NYC cashback rebate

Georges Benoliel

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.