2009 Dec 14th

A Strange Open House

Who is Selling This Hoboken Property?

I was out with some buyers yesterday looking at condos.  As usual, I searched the MLS, printed out the properties we were to see, made appointments with each agency and picked up keys at the various offices.  Midway through the morning, we were on our way to a particular property on the list, when my buyer noticed this sign in front of the building (I blurred out the address):

photo-2

What was so strange about it was that it looked like a “For Sale By Owner” sign.   Yet I had in my hand the MLS sheet for a listing from a reputable agency in town for the very same property.  The sign was clearly hand written, and lacked an agency name (as required by the real estate commission for agents).  There were no identifying names, no phone number, no agency logo, none of the usual trappings.  I thought perhaps the sign was for a different unit in the same building than the listing for which I had made the appointment.  It wasn’t.

Upon entering, we found the unit door unlocked and 3 men inside.  They welcomed us and invited us in.  I immediately identified myself as a realtor with my customers.  I called the agency and asked if they were holding an open house.  They said no.  While I was on the phone, one of the men picked up a stack of flyers from the kitchen counter, which I could see were property flyers, and shoved them in the kitchen cabinet.  I asked if one of them was a realtor but they said they were the owners.  Two of the three promptly left the premises.

We looked around the unit.  I opened the cabinet and saw that the flyer was indeed a “fsbo” style property flyer with no identifying real estate agency info and, this was even more strange, no price!

Now, every owner is certainly entitled to try to sell his or her own property without using a realtor.  My understanding, however, is that once an owner signs a listing agreement with an agency the agency typically handles the sale.  The agency does the marketing, makes the appointments and hosts the open houses.   The listing agreement specifies that even for a number of days after the agreement expires, the seller is obligated to pay the agency the agreed upon commission even if the seller finds his or her own buyer (unless a named party has specifically been excluded from the listing agreement when it was originally entered int0).

I wonder if the listing agent knew that these owners were holding their own open house with their own materials.  Why would they have their own sign and flyers (without a price) rather than use the agency’s?  What if they had found a buyer?  So what exactly was going on here?  Very strange indeed!

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  1. Vivian

    Perhaps the agency’s efforts were not as aggressive as teh owner would’ve liked.

  2. Chris Hinova

    Well, I am really glad to hear that you came out of there OK. I would more concerned with safety rather than any impropriety. You have no way of knowing who or what is waiting for you upstairs. Be careful.
    Chris Hinova, Reintell.com

  3. homeboken

    The consumer (seller) expects the best and honest effort from the realtor. The realtor deserves the same from their clients.

    This realtor should end this engagement ASAP.

    If these sellers felt they were not getting their agent’s “best” effort, then there are professional ways to end the engagement. Circumventing the system is not one of them.

    Side note – The handwritten sign screams “I spend my days smoking pot, please come in and take advantage of my lack of knowledge.”

    In this case, I side with the realtor.

  4. JC

    Sorry to stray off topic, but can anybody shed any light on the short sale process/or going through it themselves for an investment property? thanks

  5. lori

    JC – I should really write a post about short sales – maybe later this week. It’s a long process in which the buyer has little control. I was involved with one that took more than a year and we still hadn’t heard from the bank (the buyer walked away). I’m in the middle of another now that’s actually going very smoothly and fast. The thing to keep your eye on is whether there are other liens on the property, like tax liens, maintenance arrears, other distressed units in the same building and the like. Yes, you can get a good deal but you have to be very flexible.

  6. BILL

    hey Lori…that latest post about the buyers rebate is messing up the display of your blog….at least for me

  7. lori

    Bill – I don’t know why but it’s ok in IE and not Firefox. I’ve got my tech people working on it. Thanks & sorry for the inconvenience.

  8. JC

    actually I’d like to sell one :)

  9. JC

    Its in Florida though.

  10. Tiger

    The way I see it, it seems that the three owners are trying to screw their agent out of their comission. That’s a shame; a deal is a deal; if you’re not happy with your agent, terminate the contract. But leaving it on the MLS and then doing a FSBO open house is just not right.

    It amazes me the lengths people would go to save a dime! Even if that meant screwing other people over!

    I would stay away!

  11. Lori Turoff

    There have been way, way more in Florida than Hoboken, fortunately. I recommend getting an agent certified in distressed properties to represent you. Like surgery, you want the guy (or woman) who has done many of them so they have the right experience. Good luck!

  12. JC

    As long as both parties (realtor and seller) agree owner can conduct open house with protected commission does it really matter? I know sometimes the owner may say somethign they “shouldnt” or whatever, but besides the strategic reasons owner shouldnt do this (and I agree there are many) as long as there is full disclosure Im cool with it.

  13. Guest

    Is there really “full disclosure” when the owner doesn’t disclose that an agency (and commission) is involved and doesn’t include an asking price?

  14. JC

    of course not. that part is shady sure.

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