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I wouldn't pay a dime over $850,000 for this house!

By Alan May

Real Estate Agent with Jameson Sotheby's International Realty

November 30, 2009 02:25 AM

"I wouldn't pay a dime over $850,000 for this house!"

This was the statement made by the agent who was sitting the Sunday Open House, yesterday. It was not the listing agent, and the house is listed for just under a million dollars. Conveniently, the "sitting" agent made this statement, to a potential buyer... while others were in the house, and overheard it.

One of those who overheard the remark, was the brother of the seller. The brother of the seller, of course, immediately told the seller of this statement, which in the opinion of the seller, goes directly against the "marketing agreement" that the seller and our agency signed.

The "sitting agent" claims he has done nothing wrong. In his opinion, he is an independent agent, with no loyalty due to the lister.... he's sitting the open house for one reason, and one reason only... "to pick up new clients".

The "listing agent" feels betrayed, by a member of his own office, and is at risk of losing the listing... his clients are furious, because as they and the listing agent believe: "the sitting agent should at all times, represent the property to it's best".

I'll open this one up to the Active Rain brain trust.... thoughts? Whaddya think?... who's right here? Should the person sitting the open house be representing the house... or should they be representing themselves and fishing for clients. Or is there a mix of both?

(I do already have my own strong opinion, but don't want to taint the pool by stating it yet.)

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Michael Ford

San Diego, CA

California+Hawaii+Oregon

fascinating. so to clarify...if the agent was from an outside agency would the same obligation arise? is this statutory?

it seems odd to me that an agent affilliated with a broker could transact on a listed property on behalf of a third party (the buyer) and be unconflicted. are their specific disclosures that precede such an arrangement?

calif. may be ground zero for nutty everything but that seems like an irreconcilable conflict to me should a dispute arise.

Dec 02, 2009 09:10 AM

Alan May

Jameson Sotheby's International Realty - Evanston, IL

Home is where the hearth is.

Michael - if a Coldwell Banker agent were to decide to ask a Century 21 agent to sit the open house, I imagine that a "conversation" would have to take place... as to obligations, and requirements.

In my opinion, any agetnt that "agreed" to sit the open house, automatically takes on an obligation to "represent the house"!

Dec 02, 2009 11:31 AM

Anonymous

Elaine Koecher

Listings are the property (owned) by the Broker. All agents are representatives of the Broker; therefore, the sitting agent was wrong. We all know that pricing is an opinion, even with appraisers. But you NEVER, EVER say anything negative to the homeowner or within ear shot. You must be professional at all times. Opinions should be kept to themselves and not aired at an open house.

Dec 02, 2009 12:03 PM

#193

Alan May

Jameson Sotheby's International Realty - Evanston, IL

Home is where the hearth is.

Elaine - all agents are representatives of the broker... but not all agents of that broker are representatives of that listing.... BUT... while SITTING that listing... they should be considered a designated agent.

Dec 02, 2009 12:12 PM

Jenny Kotulak

RE/MAX Real Estate Centre Inc., Brokerage - Oakville, ON

Broker - Oakville Ontario Real Estate

Hi Alan,

This agent would not be the first one to put his foot in his mouth. The mistake he made was to open his mouth out loud. If indeed this visitor was a potential buyer the agent should have suggested they meet privately after the open house to discuss further. Did the agent just feel it was overpriced in his opinion or did he have proof to back it up?

Also IMHO that was pretty sneaky of the seller to send his brother in to check up on the open house. Was he asked to sign in? With buyer agency, the first question we have to ask a visitor is "are you working with a REALTOR"? I wonder how he would have answered that question. Is there a trust issue here on the sellers part?

I think the whole situation was unfortunate and I'm sure the agent has learned a lesson. Now, how much is the house really going to sell for lol????

Dec 02, 2009 12:58 PM

Alan May

Jameson Sotheby's International Realty - Evanston, IL

Home is where the hearth is.

Jenny - I have to disagree.... the seller has every right to send in a relative or friend to see how their property is being marketed. I don't consider that "sneaky"... and we don't require people to be represented, or even seriously looking at homes when attending an "open house".. that's the entire purpose of an open house... anyone can attend. There is no trust issue here.

And the agents mistake was speaking ill of the property, while he should have been representing it. Whether he said this to the seller's brother... a neighbor, or even a looky loo. He should be representing the property to it's best advantage to everyone who attends the open. Period. It's not a mistake just because he got caught. It's a mistake to have said it at all. With or without "proof to back it up".

Dec 02, 2009 01:23 PM

Jim Hale

ACTIONAGENTS.NET - Eugene, OR

Eugene Oregon's Best Home Search Website

Alan -

Under your state's rules or your brokerage's rules:

Can a sitter represent (i.e sell the house to) one of the parties coming through the open house?

If the listing agent was hosting the open house, could the lister represent (sell the house to) one of those attendees?

If either of them can do that, at what point can they offer information or opinion about price to that buyer?

Dec 02, 2009 10:13 PM

Alan May

Jameson Sotheby's International Realty - Evanston, IL

Home is where the hearth is.

Jim - yes, under Illinois law, dual agency is allowed, so the listing agent (if sitting his own open) would be allowed to represent both sides... and a "sitting agent" would not even have a "dual agency" issue to deal with, as they could easily represent the buyer, without any conflict HOWEVER (As I've been saying over and over and over in this post)... "NOT until his responsibilities as the sitting agent of that open house are over!!".

While he's sitting that open, he represents that house... and should consider himself a dual agent. As a dual agent, he cannot offer any advice that would give an "edge" to either side. Therefore advice that says "this property is, in my opinion, overpriced by at least $150,000." Is out of line.

Once the open is over, he can shed the "dual agency" mantle, and counsel is buyer client however he wants (although I still think a little tact regarding the listing of a co-Coldwell Banker office-mate is in order)... but at that point to counsel his client to bring an offer that's $150,000 short of the listing price, is just fine.

Dec 02, 2009 11:40 PM

Wendy Hodges

Re/Max Southern Shores - Myrtle Beach, SC

Davis & Hodges

Thats crazy. If you are sitting you must represent the seller. You should also have some ethical since, since the listing agent is letting you gather leads off their listing.

Dec 03, 2009 01:32 AM

Michael Ford

San Diego, CA

California+Hawaii+Oregon

the reason i asked about the third party open houses was because they are fairly common here. more common still is the holding by a newer agent that needs the floor and face time.

we have dual agency here in calif. as well and i've always been uneasy with it. fortunately i've only dealt with it 3 times.

interesting thread, very thought provoking.

as an aside was the property overpriced at $1 million or was the home more accurately an $850k home?

Dec 03, 2009 02:24 AM

Alan May

Jameson Sotheby's International Realty - Evanston, IL

Home is where the hearth is.

Wendy - we're agreed.

Michael - third party opens are very rare here.

Dec 03, 2009 05:23 AM

Cheryl Ritchie

RE/MAX Leading Edge www.GoldenResults.com - Huntingtown, MD

Southern Maryland 301-980-7566

Loose lips sink ships would be an observation of this scenario.

Dec 03, 2009 06:54 AM

Anonymous

Sherry Adcock

The listing agent and listing agency was stabbed in the back by the sitting agent. In Alabama the listing agreement is with the listing agency not agent. All the agents of the listing agency represent the seller. Unless the sitting agent has a buyers agency agreement with the buyer, then it would be dual agency. In dual agency nothing can be said or done by the dual agent to the detriment of either party concerning price. Any way you slice it, the sitting agent is wrong. The company broker needs to take action and fire this sitting agent.

Dec 03, 2009 06:57 AM

#204

Jenny Kotulak

RE/MAX Real Estate Centre Inc., Brokerage - Oakville, ON

Broker - Oakville Ontario Real Estate

Alan, anyone from the public is welcome at our open houses. The only reason the Open House agent asks if the prospects are working with a realtor is to find out if they are already under a buyer agency contract.

If they are then the agent must treat them as someone else's client and not try to "scoop" them. If not then they are fair game.

You're right the seller technically has a right to send in a mole but I still think it is a little on the sneaky side. Especially if they are pretending to be looking for a house.

Dec 03, 2009 10:03 AM

Alan May

Jameson Sotheby's International Realty - Evanston, IL

Home is where the hearth is.

Cheryl - yep... and others agree with you.

Sherry - not quite the same, here in Illinois, but the sentiment is similar

Jenny - well, what where they supposed to do... "announce themselves" when they arrive... "hi, I'm the seller's brother?"... do you really think the would learn what they want to learn? I really don't have a problem with that... sneak away.

Dec 03, 2009 10:50 AM

Bill Lumpp

Century 21 The Combs Company - Rocky Mount, NC

Realtor, GREEN

This is crazy...legally, ethically, and just wrong! I hope they did not get paid for doing the open house.

Blessing in disguise could be that the home is over priced and the seller will lower the price (and stay with your firm)!

Pull that off and you will be the hero!!!

Bill

Dec 04, 2009 02:44 AM

Alan May

Jameson Sotheby's International Realty - Evanston, IL

Home is where the hearth is.

Bill - I've never paid an agent to sit an open house.

Dec 04, 2009 05:32 AM

Rosemary Brooks

BMC Real Estate - 209-910-3706 - Stockton, CA

The Mother & Daughter Realty Team

Well lesson learned. That listing agent should be more selective of who they get to sit in for them.... because at the end of the day it is the listing agent that will lose out. Make it clear of your expectations upfront and one is to keep your self promoted opinions to yourself because at this sitting you are representing me as the listing agent, the seller and the property. Your side line opinions should be said only in your quiet/silent voice. Right now, its all about sitting at this open and representing the seller properly -- and should you get some leads that is your advantage.

Dec 06, 2009 08:10 AM

Brian Madigan

RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON

LL.B., Broker

Alan,

Interesting point. When I was practicing law, we sued an agent (including the listing agent and the brokerage) in a similar situation. The defendants through their insurance company settled the case after discoveries.

We were not retained to deal with any licensing issues or discipline matters.

At least, in Ontario this matter seems to have been settled law for years.

Brian

Dec 06, 2009 11:37 PM

Alan May

Jameson Sotheby's International Realty - Evanston, IL

Home is where the hearth is.

Rosemary - I think you're missing the point. Whether sideline opinions are said quietly to one client, or loudly enough to hear... when representing the property, they should be nothing but positive. Period. Once you are out from under the obligation of the open house, you are free to say whatever you'd like. But while sitting that open house, you represent the property. And if you don't represent it well, you might find yourself talking to an attorney like Brian.

Brian - we have it figured out here too... but the sitting agent just didn't get it.

Dec 07, 2009 02:48 AM