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Unethical Broker Practices??

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Nattle_N

Junior Member
What is the name of your state (only U.S. law)? Texas

We put a bid in on a house less than a week ago, knowing the sellers family well, the mother of the seller informed us we had the highest bid so far. We signed an agreement with the broker (whom was also the sellers rep) with a closing date of 4/15, and put down earnest money with the title co on Tuesday 3/15.

Later that day, the seller's mother called to inform us, the broker was not acting in our best interest and lied to the seller stating we couldn't get funding so he should go with the previous offer. Our banker was out of town (spring break w/family) for a couple of days so we had to wait for him to get back. I am not sure if the broker wanted to get her commission in sooner, or if she has a friendship with the other buyers, or why in the world she would have done this.

Our banker returned to work this morning, 3/21 we had an appt to meet with him, and the seller's mother called us to say the seller went with the other offer because the broker called him continuously to tell him he should hurry and take the other offer before they withdrew. The broker never once called to update us on the progress of the deal. When my husband would call her, she said she was still waiting to hear from the seller. After receiving the call from the sellers family this morning, my husband went to the brokers office to speak with the broker about her unethical business practice & retrieve our earnest money. The receptionist claimed the broker was out of the office. The broker called our home after a bit and stated she was in her office now and would speak to my husband. Upon his return, the receptionist handed my husband an envelope that held our earnest money check, and a signed faxed copy of a txt message from the seller dated 3/18 saying they went with the other offer. If the action was not coerced by the broker, I believe we would have been let known Friday 3/18 that the seller decided to go with the other offer.

This property acquisition was a commercial investment for us. I believe she cost us a great financial opportunity by falsely representing our finances to the sellers. I have since heard from several people in the community that she has for many years had unethical business practices such as this for many years. Is there any action I can take besides just filing a formal complaint with the TREC?
 
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Zigner

Senior Member, Non-Attorney
Until today, you didn't have financing in place. The seller went with the folks who DID have financing in place.
 

Nattle_N

Junior Member
We did have funding.

We did have funding, the seller was told by the broker that we did not have funding, and he should go with the other offer before they withdrew. I asked the seller via his mother-in-law to phone us after I heard what the broker was doing, so I could explain to him the funding was available, and the bank President would be back Monday to sign the letter of credit (as his secretary explained). The seller was told by the broker he could not contact us, he was only to negotiate through her, like the contract he signed with her stated.
 

Zigner

Senior Member, Non-Attorney
We did have funding, the seller was told by the broker that we did not have funding, and he should go with the other offer before they withdrew. I asked the seller via his mother-in-law to phone us after I heard what the broker was doing, so I could explain to him the funding was available, and the bank President would be back Monday to sign the letter of credit (as his secretary explained). The seller was told by the broker he could not contact us, he was only to negotiate through her, like the contract he signed with her stated.
You didn't have guaranteed funding until TODAY.
 

Nattle_N

Junior Member
20 Days For Funding

The contract we signed with the broker on the 15th stated we had 20 days to secure the funds. Our closing date was set for an entire month away, on 4/15.
 

Zigner

Senior Member, Non-Attorney
The contract we signed with the broker on the 15th stated we had 20 days to secure the funds. Our closing date was set for an entire month away, on 4/15.
I'll bet that the offer that the sellers chose had funding in place.

I'm done - maybe somebody else can give answers more to your liking.
 

Nattle_N

Junior Member
You don't read well, therefore, you gave stupid responses, Zigner.

It has nothing to do with answers to "my liking", you lack understanding. I told you I DID AND DO have funding, I simply needed a signed letter stating so from the bank President (who was on vacation) so I could set the closing date with the title company.
 

ecmst12

Senior Member
And they went with someone who already had their paperwork in place, sooner then you would have. Bummer.
 

Mass_Shyster

Senior Member
This is an unfortunate situation, but there is no recourse on your end.


Later that day, the seller's mother called to inform us, the broker was not acting in our best interest and lied to the seller stating we couldn't get funding so he should go with the previous offer. Our banker was out of town (spring break w/family) for a couple of days so we had to wait for him to get back. I am not sure if the broker wanted to get her commission in sooner, or if she has a friendship with the other buyers, or why in the world she would have done this.
There are several issues here. First, the broker has no duty to act in your best interest. The broker is the agent of the seller, and has a duty to act in the seller's best interest. If you have any recourse at all, it would be against the seller, and the seller, in turn, could turn to the agent if the agent somehow acted against the seller's interest.

There is also an issue with the multiple levels of communication going on. Mother said that seller said that agent said that you couldn't get funding. You don't really know what the agent said to the seller. You only know what mother said that seller said that agent said.

You also don't know the terms of the other offer. Your offer included information that you would provide more information regarding financing. It sounds like the other offer had already provided the funding information. Based on theory that your offer was not accepted due to some funding issue, it's reasonable to believe that the other offer had solid funding in place, where you were still waiting for a letter from your banker.

You don't know when the other offer was to expire. There's a real possibility that the other offer was about to expire, and your funding still wasn't solid. It was probably a case of a bird in the hand. You may have offered more money, but the other party piled up stacks of green cash in front of them. A better offer is a subjective term. You may have submitted a [i[higher offer[/i], but not necessarily a better offer

Something else to consider is that many deals fall apart. If it does, you may still be in the running. Don't burn any bridges.
 

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