I am a first time homebuyer. I went to an Open House in Brooklyn and really liked the apartment I saw. I offered the full asking price for the unit. The broker got back to me and said he spoke with the seller and said it’s a go and even recommended some lawyers for me to use. But I discovered that the following Sunday he held another Open House with a HIGHER asking price! I was never notified of this. While this isn’t illegal I certainly find it to be highly unethical and certainly not a practice recommended by REBNY. What should I do? Please keep in mind that nothing has been signed but I do have e-mails of correspondence.
The Property Grunt has an interesting response with a lot of insight.
My two cents: it’s a sleazy move to accept an offer and then advertise another open house at a higher price. But, unfortunately it’s not illegal in New York.
You see, in the rest of the country, binders are used to “lock up” a deal so that these antics are less likely to happen. In New York, there is no legally binding deal until a contract is fully executed (signed by all parties and escrow deposit actually deposited). The lack of binders paired with greedy sellers and agents creates an atmoshere for this type of behavior that can sour a lot of buyers on the whole experience.
For the record, if the agent in this instance was indeed thinking that they had a “direct” deal with no buyer’s agent, it is much more likely that the seller insisted on the price increase and the agent was afraid to notify their “direct” buyer about this for fear of pissing them off and losing that big commission. All too often, agents let that commission dictate their behavior in a transaction. A simple phone call to the buyer explaining that the seller was insisting on another open house at a higher price may have simply lit a fire under the buyer to get the contract signed ASAP. My bet is that the phone call wasn’t made because the agent didn’t want to jeopardize the precious direct deal and both sides of the commission.
Of course, the agent could have also strongly suggested to the seller that this behavior could and may very well result in the current buyer walking away from the deal.
All of that said, all of this B.S. is all too often part of New York City real estate transactions. And as one of the commenters stated, it is possible that the next transaction would have a element of sleaze, incompetence, or unethical behavior as well. It sucks! But, as “blahblahblah” posted on the Curbed site, if you love the apartment, forget about how big of an asshole the seller and/or the agent may be and sign that contract ASAP. Also insist that the seller sign and return the contract by a specific deadline (24 -48 hours). Complete your board application, go to your interview, and move in. The shenanigans that you had to go through will mean absolutely nothing to you once you have moved into your new home and only you can guaranty that you will NEVER have to deal with that agent or seller again.