Is this ethical? Is this legal? What can I do?
Question: Here is the situation, please let me know your thoughts. This is a particularly frustrating situation as buying a home in the Bay Area is so tough, expensive, and competetive to begin with. If you are making a judgement, please also let me know what sort of experience/expertise you have (ie are you a realtor? licensed realtor? lawyer?)
THANKS IN ADVANCE
My friend lives in a nice, but very under the radar part of town. He tells me that his 95 year old neighbor is selling his house and wants to do it quickly. We go over and talk to the neighbor. He tells us the house has been sold. No big deal, you snooze, you lose.
Four days later, my friend calls. He is upset, and tells me he has learned a few things.
Turns out, the old man’s agent sold the home to her friend, another agent in her office. Additionally, they offered 20k below ask, telling the old man and his nephew (who lives 100 miles away) that the house is not worth what they were asking. Additionally, they bully the old man into crediting them for many repairs.
My friend found this information out from the nephew who was uncomfortable about the whole thing, but went through with it because he was under time constraints and lived far away. The realtor never listed the house, showed the house, or let market forces into the picture. She bought it, below market value, probably double ended the commission, and bullied them into accepting the deal. The contract is in escrow.
Is this legal? Ethical?
As a side note, the story becomes more complex, because I have put a backup offer on the house at the original asking price. The nephew called me, and told me, point blank, that he was upset about how his agent represented him and his family’s interests. He also said that he wants to sell the house to me.
Is there anything that can be done?
Answer: Oh BTW I am licenced in Utah, I am currently getting my brokers license and I also have a company that helps homeowners facing foreclosure. I have 6 years experience and I have a background in bankruptcy as well as finance. As far as real estate knowledge goes, i can hang with anyone. I still think that you might have a very simple out by not performing, but before you take that advice talk to an attorney. If it ends up that their damages are limited to an amount equal to the ernest money then lose the $500 or whatever it is and do the other deal. CONSULT AN ATTORNEY THIS IS JUST A SUGGESTION AS ITS THE FIRST COURSE I WOULD LOOK AT IF IT WERE ME. I’m still studying my real estate courses, so I’m not experienced. But this is highly unethical, and you don’t have to go to real estate school to know this. It may also be illegal, depending on the disclosures. At the very least, someone should complain to the broker or even the DRE.
But a lot depends on what the paperwork says. If the agent disclosed everything, and the old man signed on the dotted line, he may not have any recourse. It’s hard for the law to save people from their own bad judgement. As for the nephew, I mean, c’mon… 100 miles is just a couple of hours’ drive; it’s not like it’s two states over.
Further, you have no standing here. You’re not the victim. In fact, since you stand to benefit, some could say your involvement is suspect. How well do you know the house? How do you know what it’s worth? Well, there’s two things going on here. One thing is stopping the sale in progress; the other is putting the house up for sale again. But neither is up to you nor even the nephew if he isn’t the owner. It’s up to the old man. And if he wants to proceed with the sale, there’s nothing that can be done.
You can’t do anything here. What the nephew should do is contact a lawyer.
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