Made it all the way to investor approval to be denied, My realtor and seller are related
I am a buyer that found a house on realitor.com I did not have a realitor so i contacted the listing agent directly. we put in a offer at fair market value and got all the way to investor approval, yesterday the realitor informed me that the bank has denied the offer due to the seller of the house is her sister. the realitors broker said that he would put another realitor on the case, now the bank doesn't want to deal with the broker or the realitor at all. Does anyone have any suggestions how to fix this.
Appreciate any Help
Paul
Replies to This Discussion
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Permalink Reply by Scott Korbin on
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Let's all be careful about using statistics unless we can substantiate them. Consumers need our facts and experiences, and feqer opinions and judgments. But your point is well taken. Happy Short Selling!
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Permalink Reply by Josh M. Boggs on
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The one argument that I still don't see anyone capable of backing facts for is where within the all legal and binding documents anywhere do the sevicers, lenders and investors actually have to agree to a short sale anywhere and further the less required to actually give a reason for denial?
So maybe this "related relationship" reason for denial is just whatever sounded most appropriate to just decision the file at the time? Just my thoughts.
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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Josh -
You are correct! There is no requirement for any lender to approve a short sale and they don't have to give a reason either!
Best,
Thom ColbyNewport Beach
Josh M. Boggs said:The one argument that I still don't see anyone capable of backing facts for is where within the all legal and binding documents anywhere do the sevicers, lenders and investors actually have to agree to a short sale anywhere and further the less required to actually give a reason for denial?
So maybe this "related relationship" reason for denial is just whatever sounded most appropriate to just decision the file at the time? Just my thoughts.
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Permalink Reply by obed montez on
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I have read the replys and it seems everyone is talking about arms length and its legality. I have one thought and that is, what the listing agent will do if a prospective 'sue happy' buyer real or not was to question how property was marketed and if there was multiple offers why one was accepted over the other without proper counters since a seller aways wants to get the best offer possible. Maybe and maybe not a lawsuit waiting to happen.
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LOL !
Thats's great !
Nedy Blanchard said:What is a Realitor?
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Permalink Reply by Patti Lyles on
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Thom Colby,
I like that your Brokerage has a policy to never double-ends deals & does not list or sell properties owned by relatives. My Brokerage has different policies then yours, but they would never force me to comply. We are on the same page here, so you and I won’t lose sleep.
BTW: My post does not state that it is an MLS Rule, the post referred to Article 4.
In my MLS, when you are uploading your listing there is a category call Special Info. Under Special Info is a box that says Agent Related to Seller, which you check if it applies. Is it your interpretation that is not required but simply an option to check said box?
This question was answered by my MLS Compliance department in 2009, but you have a higher standard of knowledge than I do about such things. I may have misunderstood their answer.
The MLS Rule Book that I have is 68 pages http://www.car.org/legal/mls/california-model-mls-rules-5-11/ What is your interpretation or comments about MLS Rule 7.17? This was the Rule that the written Compliance Notice issued to an agent when she failed to post in MLS that she was related to the Seller.
More on Article 4 = The 2011 Code of Ethics and Standards of Practice of the National Association of REALTORS® is provided = Download a Microsoft Word version of the REALTORS® Code of Ethics. However, I encourage everyone on this discussion to read the two items below.
- http://www.realtor.org/wps/wcm/connect/d42243004891c292ab84ff0c8bc1...
- http://www.realtor.org/wps/wcm/connect/2b96e0804891c371aee3fe0c8bc1...
Thom Colby Newport Beach CA said:Patti -
I'd like to know where in the MLS Rules it includes any of the following:
In the State of CA = When you are the Listing Agent you have to put on the listing in the MLS you have to post "Agent is related to Seller".
I re-read our 43 page MLS Rules (CA) and cannot find it, maybe I'm blind, maybe during my 4 years on the MLS Committee I missed it, maybe the year as Chair of the MLS Committee I missed it, or maybe 3 years on the Board of Directors of the largest Association in CA I missed it..... what page and paragraph?
As a matter of Practice, as Realtors we disclose any relation to a party in the transaction within the MLS - but it is not required. It is required per the Code of Ethics that we disclose any relation in writing PRIOR TO a Purchase Agreement being signed.
Sometimes, we are all working so hard to do the right thing, we believe things are written into the Rules, but they may not actually be written.
At our Brokerage, we don't have this issue to deal with;
1) We never double-end in our brokerage,
2) We do not list or sell properties owned by relatives.
It makes it very easy !
Thom Colby
Broker
Newport Beach CA
Jeff Payne said:
Well said Beverly, disclosure is the key
Beverly Cibulsky said:Great Post Patti!
Article 4 is from the "National Association of REALTORS Code of Ethics, which must be abided by ALL State Association of REALTORS! Dont want to say so, but this Buyer may have a good "Ethics Complaint " against the original agent's REALTOR Association.
Jeff Payne said:I did read this and I agree that you must disclose. Florida requires the same disclosure if you have an interest in or are related to the seller.
I have never had BofA cut commissions or deny a sale just because both agents were in the same office, I have had them cut if I had both sides which rarely happens because I dont work with buyers, just sellers.
are you disclosing that you are getting a referral from the agent that you referred the seller to because you wanted to avoid the family member issue?
Patti Lyles said:They will deny because BofA will not pay commission. BTW: This stuff always gets found out in the eleventh hour when the demands are checked and BofA sees it is the same Brokerage on both sides, their radar goes off. Sometimes you simply open the file again and Seller has to get another agent. 1st try using another agent from the same Brokerage and work out a deal between the two agents to get your agent some compensation for the work. If that doesnot fly it is because the Investor is afraid of the liability, just go get another agent outside of Listing Brokerage and work out a referral deal.
This is an issue on another level. Lack of Disclosure. In the State of CA = When you are the Listing Agent you have to put on the listing in the MLS you have to post “Agent is related to Seller”. On the other hand: If I am representing a Buyer that I am related to, I have to put on the purchase offer that . . . Buyers Sister is a Licensed Real Estate Agent for the State of California… if I buy anything or represent my immediate family. i.e. Buyers wife is a Licensed Agent, Buyers Mother is a Licensed agent. Yahda yahda….
• Article 4
REALTORS® shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner’s agent or broker. In selling property they own, or in which they have any interest, REALTORS® shall reveal their ownership or interest in writing to the purchaser or the purchaser’s representative. (Amended 1/00)• Standard of Practice 4-1
For the protection of all parties, the disclosures required by Article 4 shall be in writing and provided by REALTORS® prior to the signing of any contract. (Adopted 2/86)We
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Always documenting that I have asked all interested parties for their Highest and Best without disclosing the amounts offered by the Other parties is the only way I know how to avoid the potential for conflict.
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It seems like the banks are looking for reasons to deny the sale. Aren't they the ones who were in trouble and dishonest first? The negotiators have no power so always talk to someone higher. If all else fails go to your State Senators and file a complaint, they will do an investigation. Also complain to the banking commission.
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Permalink Reply by The Negotiator on
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Jeff, I would have to disagree with you. Seller and listing agent being related can cause problems (obviously.) Some lenders do NOT want that and need 100% arm's length. The transaction is NOT arm's length because the seller and agent are related. Each lender does seems to have their own version of an arm's length doc, but, they all seem to have "no relation" on all of them, which, makes it very clear and not easily distorted.
If anyone is looking for blame then blame the listing agent for being a moron.
Remember, a short sale is a privileged, not a right. Never go into a short sale with expectations of success.
Jeff Payne said:
Paul, your realtor needs to push back and fast! The fact that your seller and agent are related is irrelevant, the current market value and your offer are what is most relevant here. Arms length transaction definition is getting terribly distorted lately and as long as your transaction with the seller is arms length then this sale should occur. I would guess that the negotiator on the file does not understand arms length and can only read between the guidelines and can not think outside of the box. Push this thing and escalate to the investor on this one.
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You Realtors with your 2 week "degrees" are so sensitive. Give me a break, this is not a high school chat room. Be kind and courteous to others.
To all those who replied laughing should be ashamed of yourself.
Nedy Blanchard said:What is a Realitor?
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Permalink Reply by Michael Schneider on
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@Negotiator. Well, I think the facts do not quite support all of what you are stating here. Agreed, sibling relationship between Agent/Seller can cause problems, no question.
But, the Arms Length agreements do not always prohibit the relatiionship. And, even the Freddie Arms length is unclear, at least to me. Here is the clause from a recent Freddie short sale. The Parties are buyer, seller, agents and brokers. And, I think "this contract" is referring to the Purchase Contract. And, the agents/brokers are not asked to sign the Arms Length, which is an Addendum to the Purchase Contract, so how can they be a "party to this contract".
The Parties acknowledge and agree that the Subject Property must be sold through an “Arm’s Length” Transaction. Arm’s Length means two unrelated parties characterized by a selling price and other terms and conditions that would prevail in a typical real estate sales transaction. No party to this contract is a family member, related by blood or marriage, business associate, or shares a business interest with the mortgagor (Sellers).
I think the question hinges on the meaning of the phrase "No party to this contract...". Who does this refer to?
If I had to choose today, I'd say this does not prohibit the sibling relationship between agent/seller. But, I can see that others may read this differently.
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