Commercial PropertyBuyer In Overheated Market Faces Tough Introspection
"Melody" is frustrated with her buyer broker.
Seeking help from Realty Times, Melody wrote, "When I put a bid on the last house, I ended up signing a buyer broker agreement with my real estate agent that locks me into a one-year contract with her. The problem is I did not get the house, and since then, I have been spending 20 hours a week trying to find a home in my price range since my real estate agent is not very proactive. Then if I do find a house, she makes me bid full price on the house and refuses to write bids if I am going to bid on the house lower.
"My question - is this normal, and do I have any recourse to break the contract I have with her?," asks Melody. "Or do I have to wait until the contract expires to get rid of her? The problem with waiting is that the housing market is going up each day."
We wrote back to Melody with some questions to get more information, but she didn"t respond.
Maybe she didn"t get the e-mail, or maybe she did and didn"t like what we had to say.
Well, Melody, there"s more. You may be simply a classic case of a buyer who is frustrated that an overheated market is not within her control, and your real estate agent simply doesn"t have the heart or the professionalism to deal with you properly.
There is a lot of information missing from Melody"s letter, like where she is trying to buy, how long she"s been looking, and what her buying affordability and readiness is related to the local market conditions. But, judging from her frustration level, it"s probably safe to guess that Melody is trying to buy a home in an overheated housing market where buying tactics are beyond her ability.
Control is really the issue here, isn"t it? The market is out of control, and Melody clearly likes to be in control.
Let"s look at the statements:
"When I put a bid on the last house, I ended up signing a buyer broker agreement with my real estate agent that locks me into a one-year contract with her."
It appears that Melody and her agent have been looking for a home for some time. Melody is somewhat resentful at her real estate agent for turning the tables on her and forcing her into a contract to represent her on the purchase of the home.
Melody either wasn"t presented with a buyer"s broker agreement by her real estate agent before, or resisted signing one until she found the house she wanted.
Several questions arise. Why was the communication so poor between Melody and her agent? Why would a real estate agent want a one-year buyer"s broker agreement with any buyer? Is Melody a ready, able, and willing buyer or not? Even seller"s agreements aren"t typically a year long. Usually marketing a home, unless it is a unique property or located in a buyer"s market, can be accomplished within three or six months at the most, which implies that buying one should take that long, too. Is Melody mistaken about the terms of the agreement, or does the agent, based on past working experience with Melody, believe it may take as long as a year to sell Melody a home?
If so, it"s obvious that the agent isn"t willing to work the number of hours to find a home as Melody feels she"s putting in, judging by this next statement:
The problem is I did not get the house, and since then, I have been spending 20 hours a week trying to find a home in my price range since my real estate agent is not very proactive.
Melody has taken control, even though she believes she is contractually obligated to the real estate agent. She clearly believes that her agent"s resources are limited, or that her agent is unwillling to search for a home in Melody"s price range.
So what resources is Melody trying to use that her agent doesn"t have? What is taking 20 hours a week?
Then if I do find a house, she makes me bid full price on the house and refuses to write bids if I am going to bid on the house lower.
This is the most telling statement of all.
Melody says she is finding the home and her agent won"t write offers unless she bids full price. Melody is looking for a bargain, but her agent and the market are telling her that only full price offers will prevail. Since it appears that Melody has bid on more than one house, and failed to get the house, she either doesn"t believe or has failed to learn from repeated experience that she is in a seller"s market.
So, are there homes in Melody"s market that she can buy or not, and what is preventing her agent from showing them to her if they do exist? As her market continues to get more expensive, Melody is less able to find the home she feels she deserves.
Clearly, there is a communication problem once again between Melody and her agent. Either Melody is not facing the market realities - that her buying ability will not buy the kind of home she wants in the current market, or her agent is truly not being proactive enough.
And there"s only one reason an agent isn"t proactive - if he or she believes it"s not worth the time.
Although it"s no excuse for the agent"s behavior, it"s clear that she"s either the world"s laziest real estate agent or she"s worked on Melody"s behalf and is now fed up, and only willing to hang in there in case Melody ever comes through with an offer that sticks through closing. It"s obvious from this passive-aggressive approach that communication between the two is miserable.
While Melody offers no self-examination into her failure to achieve homeownership, it"s possible that she could either be shopping for too much of a bargain, or she"s unrealistic about what she should be able to afford, or that she"s too hard to please.
However the broker is at fault if she has not been completely honest in her interest in helping Melody find a home. Maybe the broker is used to selling higher priced homes, or working with more experienced, realistic buyers and has lost patience with Melody"s stubborn refusal to bid at the current market"s stakes.
In other words, when a relationship isn"t working, usually both parties are at some fault but not necessarily to the same degree.
In this case, it"s clear that the broker is trying to punish Melody, and make her "pay off" someday, but it sounds like any sale that results from this relationship will be a Pyrrhic victory indeed, as the broker is being punished as much. If the broker doesn"t want to help buyers in Melody"s price range, or the area of town Melody wants to buy, or some other reason, then the broker should do the decent thing and either refer Melody to a broker who is better suited, or cut her loose.
Without seeing the buyer"s agency agreement, it"s difficult to advise Melody as to whether she can or should cut her real estate agent loose. Realty Times doesn"t give legal advice, but it"s fairly safe to say that if she wanted to get out of the contract, she could, especially if she believes the agent who is supposed to be representing her best interests isn"t doing a good job.
But a better approach, if Melody is willing, is to look at her own role in the failure of this relationship. Did she ignore the advice of the agent? Repeatedly? Has she tried to control the relationship to the point that the agent has been unable to do her job effectively? Is that why the agent is so resistant at this point?
In other words, Melody, do you want to buy a home, or do you want to win? In a seller"s market, it"s impossible to do both at the same time, unless you start thinking of buying the home you want as winning.
And maybe, if your agent sees you come around, she"ll come around and start doing a better job for you or let you out of the contract.
Sometimes to get control, you have to give up a little.