While representing some buyers, I recently submitted an offer to purchase an REO (bank owned) home. I later found out I had no chance of competing for the deal because the listing agent changed the rules for submitting the offer AFTER it was already submitted...and that's just the beginning. I then filed the following complaint with the State of Florida's Department of Business and Professional Regulation (DBPR). DBPR found sufficient evidence to launch a formal investigation, the name of the realtor who's under review has been omitted pending the outcome.
On May 17th, 2010 an REO home was listed for sale in Southwest Miami, FL in the 33145 zip code. The listing agent for this property works with Coldwell Banker. As a licensed Realtor, I represented two buyers who decided to submit an offer in an attempt to purchase the home.
On May 18th I emailed the property's listing agent to ask if she thought the bank would accept an offer at full price and she replied "we submit all offers, please send". The home was an REO and the description on the MLS (multiple listing service) stated that all purchase offers were required to include certain forms that were posted on the MLS by the listing agent. The forms were in a PDF attachment and contained 8 pages. I printed them out and reviewed them with the buyers. 5 of those pages included an "As is" contract which had the name of the required title agent already typed in. The other areas that were already typed in included: '14 days allowed for a loan commitment' and '3 days for inspections'. My buyers wanted to use their own escrow agent to hold the deposit and wanted to have at least 5 days to do inspections. The house was listed for $246,900 but my buyers offered to pay $270,000 which is $23,100 above list price. They planned to finance 80% of the sales price with a conventional mortgage. We prepared our offer along with a pre-approval and escrow letter. We also filled out the 'buyers information' sheet that was included in the PDF attachment. Our offer was submitted to the listing agent via email on May 20th, 2010 and she acknowledged receipt.
On May 21st I sent the listing agent the following message "Please let me know if you have any questions or concerns. The buyers don't want to lose this deal so we will do the best we can - just let us know what we need to do please". After not hearing from her for a couple of days I called her Broker to confirm my offer had been submitted and whether I needed to increase the price or change the terms. The broker could only assure me that the listing agent submits all offers.
On May 28th, I again emailed the listing agent to find out the status of the deal and 5 minutes later someone on her team emailed me to say the bank accepted another offer.
On June 8th the deal was closed and the buyer's agent happened to be a member of the listing agent's own team which means they received both sides of the commission. That team then re-listed the home the very next day for $350,000 - a whopping $100,000 more than it just sold for.
When I learned of this, I went back to review the closed listing. I opened the PDF attachment and was shocked to find that it now included 16 pages instead of the 8 pages that were there originally. The new PDF attachment included additional documents such as an information sheet outlining exactly what is required for an offer to be considered. For instance, it stated that all buyers must contact their Chase loan officer so she can cross reference the buyer's pre-approval for financed offers. That document went on to state that Chase's verification of funds was extremely important because the listing agent "can not upload a financed offer without this". There is no way I could have known this information because it was not available when I submitted my offer and the listing agent failed to notify me at any point during my communications with her later on. That document also stated that "any changes made to the contract will not be acceptable," but again I could not have known this because it was not previously disclosed.
There were still more additional documents that were added to the MLS after I had made my offer. They included: a mold disclosure releasing Chase from any liability, an addendum regarding forfeiture of deposit, a drywall disclosure and a Chase advertisement about getting cash back incentives on a mortgage. Curiously, the 'As is' contract was replaced with another one that stated the title company was 'TBD' and the name of the previously required title agent was no longer there. The inspection period had also been changed, the '3 Days' was simply taken out and left blank. Section 5 of the contract concerning who was responsible for obtaining the title commitment was also changed from 'Seller at seller's expense' to 'Buyer at buyer's expense'.
On June 10th I called the listing agent to ask why the documents in the PDF file had been changed and she said she wasn't sure but someone in her office may have made a mistake. I found that hard to believe since the MLS indicates that someone used her license number to log in and upload the new PDF attachment. She maintained that my offer had been submitted but the bank accepted the other offer because it was a cash deal with a lot of earnest money down.
She not only closed that deal by selling the home for $250k to her own investor but she then turned around and relisted the home for $100k more the very next day. When I asked her about this she bragged about already having multiple offers on the home at the new price of $350,000.
I now question whether my offer was ever submitted. I also wonder if Chase knew the home was worth much more than $250,000 when they listed this REO with this agent. Shouldn't they be upset to know the listing agent turned around and listed the same home for an additional $100,000 the very next day and, as she says, there are already 'multiple offers'?
It is grossly unfair for this listing agent to have changed the required contract documents on the MLS after agents had submitted their offers. If documents needed to be changed then she should have called each agent who had submitted an offer and told them about the new documents that needed be filled out and submitted. According to the new documents, my offer would be considered incomplete and would not have even been submitted for review because it was missing critical addendums and I didn't contact the Chase loan representative to verify funds. There is no way I, or any other Realtor, could have known this and it was the listing agent's responsibility to notify us. My buyers were extremely disappointed and disheartened to see how this deal played out. Because of this they are losing confidence in all real estate professionals. At the very least, the listing agent did not allow buyers a fair shot at purchasing her listing and her actions regarding the required paperwork appear deceptive. I believe this deserves some type of recourse.
This particular agent has sold 125 homes in the past 12 months and claims to be one of the highest producers in the nation. Has this agent really created a winning team if she doesn't play by the rules of the game?