Whom does your real estate agent represent?

By Joel Persinger
YourRealEstateDude.com

With the rapid expansion of the foreclosure and pre-foreclosure markets, many real estate professionals have forgotten whom they represent, particularly when the agent represents a seller who is in the throws of a foreclosure. While that agent would most likely have been hired by the seller, he or she would also be required to deal with the lender. The lender would have a financial interest in the home and could stand to lose money if the home was sold for less than what was owed on it. It has been my experience that many agents in this situation cannot seem to figure out whether they represent the seller or the lender. Indeed, I have found that some brokerage firms have no more clue as to whom they represent in these cases.

Just recently, I wrote an offer for a client who wanted to purchase a property which was in pre-foreclosure. The seller had missed some payments. But, the lender had not yet begun the full process of foreclosing on the property. My client was a sophisticated buyer and understood the process of buying such properties. I called the seller’s agent and explained the situation, outlined my client’s intended approach and asked if the agent and the seller were willing to move forward. The agent got back to me later that same day and told me that he had explained the situation to his client and that the client wanted to move forward with the deal. The next day my client tendered an offer. As previously agreed, the offer was low, but only for the purpose of beginning the negotiation with the lender.

Four days went by without a call from the seller’s agent acknowledging that he had received the offer. So, I called him to follow up. He told me that he had not presented the offer and did not intent to. I asked why. He said he did not feel that he was doing what was right by the lender. I asked him whom he represented. With an incredulous tone he replied, “The seller.” I answered, “Then why are you worried about the lender? Shouldn’t you be more concerned with getting your client out from under that house?” He scoffed at me, and ended the conversation. My client did not buy the house. In fact, he has elected to wait until it goes into foreclosure and buy it directly from the lender. In the meantime, it’s still on the market, unsold. The lender has begun the foreclosure process and the seller is in more hot water than ever before. This seller’s agent did not understand whom he represented. Does yours? My advice is, make sure your agent is looking after you before you hire him. Otherwise, you could end up in the same boat as the gentleman in this story.