Special offer

The Best Interest of Who!?

By
Real Estate Agent with RE/MAX Executives Nampa, ID

When you represent a party to a transaction, you must look out for the best interest of that party (your client).

 

As far as the best interest of the seller:

1.     They want to sell the house prior to it being foreclosed on.

2.     They would like to be assured of no costs out of pocket.

3.     The timing must fit their needs as best as possible.

4.     They need to be assured of no deficiency judgments.

5.     Price may not matter.

 

For the buyer’s best interest:

1.     They want the house.

2.     They want to buy it at the best possible price.

3.     The timing must fit their needs as best as possible.

4.     They want to be assured of a real deal & plan on the move.

5.     They don’t want to pay any hidden fees or costs on behalf of the seller.

 

Agency laws vary by state, however, most will allow “Limited Dual Agency.”  The limited part refers to confidential information and you must not favor one party over the other or compromise the best interest of one over the other.

 

When you represent the seller and the buyer in a short sale transaction, agency has a little different twist.

 Historic Bank

Where does the bank come into play…or does it?

 

If the seller is satisfied with a low-ball offer, and the buyer is happy with the deal, why not go ahead and get the bank to approve it?

 

…In comes the other offer.  Now you have another agent who represents a buyer with a higher offer. You have no agency relationship with this new buyer, but it’s in the best interest of the bank or third-party lender, to get the highest price for the sale of this home... Isn't it?

 

What do you do?

Juli Vosmik
Dominion Fine Properties - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

Don, I have had this discussion so often with other agents and still get no answers.  IMHO, it's all about fiduciary responsibility.  Because the bank is now, technically the seller, I think our responsibility has to move to the bank's best interest.  I'm sure I'll be in the minority here, but they are the ones ultimately paying our commission. 

Dec 13, 2010 04:30 PM
Don Wixom
RE/MAX Executives Nampa, ID - Nampa, ID
"Looking out for your next move..."tm

Juli, that's why I brought it up! We only have an agent/client relationship with the seller and the bank is just a third-party. This is a tough one.

Dec 13, 2010 04:32 PM
Jim Paulson
Progressive Realty (Boise Idaho) www.Progressive-Realty.info - Boise, ID
Owner,Broker

Where is the "All the above" option?  If you represent the seller, (deeded owner) you have the obligation to get them the best price in the appropriate time frame.  If you take less than the amount that satisfies that lenders, just make sure you have either a release of contingent liability or a release of liability from the seller before you accept an offer that might subject them to a ghost tax.

Dec 13, 2010 04:35 PM
Stacey Smith
Keller Williams Realty - Aliso Viejo, CA
Your Orange County Beach Cities Realtor

Your still the seller's agent and your job is to present ALL offers to them and they make a decision which one to put on the banks desk to be a dust collector for a few months...You almost have to have dual personalities when taking a a dual agency...

Dec 13, 2010 04:38 PM
'The Diamond Group' 'A Cut Above The Rest'
The Diamond Group @ Keller Williams - Lubbock, TX
Lubbock Texas Real Estate

I agree with Stacey, we do represent the sellers no matter if it is a short sale or not.  Interesting dilema

Dec 13, 2010 04:46 PM
Jim Hale
ACTIONAGENTS.NET - Eugene, OR
Eugene Oregon's Best Home Search Website

Never at any time does an agent represent the underlying lender.  Not even close.

We never have a fiduciary duty to a lender.  Banks do not ever pay our commission. Ultimately, it's the buyer who always pays the commission.

But neither can any agent deceive the lender - because that is mortgage fraud.

 

Most short sale offers in my area are written with a provision that only one offer is being forwarded to the seller.  All parties, including the lender can see this is the case.  Back-up offers are sometimes taken but not submitted to the lender unless the first sale is rejected.

Dec 13, 2010 05:15 PM
1~Judi Barrett
Integrity Real Estate Services 116 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

Don,

Oklahoma did away with agency law per real estate in 2000.  I work as a transaction broker...

Dec 14, 2010 01:25 PM
Don Wixom
RE/MAX Executives Nampa, ID - Nampa, ID
"Looking out for your next move..."tm

It is an interesting dilemma and I don't know if there is really an answer. If one were to go with the highest offer for the benefit of the bank (a non-client) and reject the buyer's (client) offer, then you are compromising the best interests of that client.

Thanks for the good comments!

Dec 17, 2010 02:37 PM