A Dual Agency Kerfuffle ...132

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Deerwood Realty and Friends Podcast

There is a lawsuit on a dual agency transaction and I wanted to go over it…going to remove the names of the people involved and change price and location because it’s an ongoing lawsuit.

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Story:
A. Listing agent lists a house for sale .. 3 Million Dollars
B. Listing Agent is representing the seller and a buyer as a dual agent
C. Buyer not represented by dual agent loses out on the sale
D. Losing buyer made an offer with an escalation clause to 4 million dollars
E. Losing buyer finds out that an offer was accepted for less than 4 million dollars(strange)
F. Losing buyer drives to the house to talk to seller…and try to offer more to buy house than winning buyer. Losing buyer alleges that seller was not presented key facts of their offer and that only winning offer was presented in writing (which would be bad)
G. Dual Agent alleges to tell sellers that winning buyer offer was the “cleanest” and that losing buyer offer contained inspection language that could allow them to walk from the contract.
H. Losing Buyer’s agent….says that she told Listing agent inspection clause could be waived if seller required, BEFORE losing buyer talked to sellers….now this is a big deal because, this would seemingly indicate that their could have been a cleaner offer presented…buyer should have waived inspection to compete, in writing…none of this talking bs.
I. There were two real estate brokerages on the deal but they are both franchised brokerages. Losing buyer goes to his brokerage to complain and they tell him to complain to listing agent brokerage because they have nothing to do with it. Losing buyer, who has no expertise in real estate franchising, contends that franchised brokerage doesn’t have control over their brokerages.
J. Losing buyer goes so far as to try to buy out the contract of the winning buyer (after rejected by seller). Losing buyer is not a saint by any means..his demonstrated actions are deplorable. He is a wealthy man accustomed to getting everything he wants…this is obvious in the story.
K. Even after all of this, listing agent tells losing buyer there is another property for sale, near where the current sold house is. Losing buyer would have to pay for commissions…and that is where the math gets funny. Somehow losing buyer is claiming the commissions he paid added up to something like 300k more than the asking price of the house, which makes no sense
L. Losing buyer then sues listing agent, which includes the difference between what he would of paid at house losing buyer didn’t get and the one he did(wild)
M. Losing buyer alleges that listing agent as a dual agent conspired to keep him from acquiring original house and that the sellers were manipulated out of a lot of money

Thoughts:

1. Listing agent can’t talk because he is being sued. But, even in the allegations, the act of telling losing buyer that there is another house available could be seen as a conciliatory gesture by some…vicious money grab by others if he happened to be the listing agent on that house ultimately purchased by losing buyer as well.

2. The allegation that the offer by losing buyer was not presented….that would be bad…oral offers are allowed in Missouri, but the best policy would be to have it in writing. Think about it…I have a written offer I present to the sellers and say some rando just told me he would pay 20k more than this but won’t put it in writing…who do you think sellers will choose?

3. I can easily understand the cleanest offer presented being less than the losing buyer offer and still getting accepted. Quick example, say someone offers 100,000 for a house with inspection clause, subject to financing. Say someone then offers 95,000 for a house no inspection clause, cash. Which offer is best? 95k. Why? Inspection clause might mean a drawn out negotiation for repairs over 5k, and house might not appraise which could lower the price as well.

4. How did losing buyer find out that they took less than his offer BEFORE the deal closed and in time for him to go to the seller to complain? This would be confidential information not to be disclosed by listing agent/dual agent. This is suspicious.

5. The allegation by losing buyer that seller was not adequately informed about their offer…that’s a certain type of personality.

5. Losing buyer somehow finds out who winning buyer is and contacts them to buy them out?

6. What are the sellers suing for? Do they sincerely feel they were duped by their agent? If so, why? They should have a copy of all relevant documents.

7. I am sure that I am biased.

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