Real estate / mortgage / buying a home advice needed

My daughter is buying her first house. She has been working with realtor Arnie for a month or so – this has consisted of him allowing her access to a portal that she checks daily for new listings. She has not seen any houses with him yet. We went to a few open houses today on our own.

We also drove by a home that was listed in the portal (no open house today) and saw some folks obviously looking at this house with an agent. We approached them as they were leaving and the agent (let’s call him Bernie) agreed to show us that house when we asked.

So, she really like this house. It turns out that Bernie is not the selling agent, just the buying agent for the people who were looking at it. Daughter told Bernie she is already working with an agent. Bernie took her info as we were leaving. She and Bernie have been texting back and forth, he has been answering her questions and offering (seemingly) reasonable advice.

Now she wants to bid on the house. Back to Arnie to proceed? Drop Arnie, go with Bernie?

I feel like we are already treading in an ethical grey area. I haven’t bought a house in 25 years so I’m a bit out of the loop on the process.

(another note: Bernie said something about bidding on two different properties at the same time as a good strategy; we are not doing this, but I’m wondering if this is ethical. He also mentioned something about telling the sellers she is putting down 20% - even if she is not – to make it look like a stronger bid. Also ethical?)


Presumably she has a contract with Arnie that goes over this contingency. Those contracts are pretty standard and have all sorts of language covering these sorts of situations.

I do not think there is any sort of contract. She has never even met Arnie face-to-face, just via texts and (I think) emails.

What matters to the agents is do they get paid. Since Arnie provided the list of properties for sale that included the house, he is almost certainly entitled to a commission if she ends up buying the house, even if she spoke with another agent.

But what concerns me about Bernie is:

The advice to bid on two different properties seems to be horrible advice. What if both buyers accept her offers? Sure, there are usually ways to get out of going through with a deal, but I think it’s unethical to make multiple offers knowing in advance you will not go through with the transactions. As for the advice to say you are putting down 20% even if you are not, that is absolutely unethical and dishonest. I would stay far, far away from Bernie.

Making multiple offers on houses is ethical. There is an attorney review period where either party can cancel for any or no reason.

Presenting a contract with an outright lie is illegal. I would suggest you contact Bernie’s broker and/or your state real estate licensing board on that matter.

Annie-Xmas, 26 years in real estate.

Is giving a client their own access to the MLS portal the thing to do nowadays? Sounds like a Realtor would be giving up one of their most important bits of relevancy by doing that.

If that’s all he did, Arnie didn’t do much to earn anything. But if there is no contract, daughter can work with anyone, and might want to find someone other than the two she has met so far. But she should be looking for a buyer’s agent at this point.

As someone who has bought and sold a bunch of houses over the last 37 years, it doesn’t sound to me like Arnie has done anything to earn a commission. Especially since he hasn’t taken her to look at any houses. Most every realtor we ever worked with was eager to set up appointments with us to see available properties. We’ve dealt with a few who couldn’t be bothered, and they were replaced in short order.

I figure when it’s my money, I can choose who I’ll deal with. Only once did we have a sucky selling agent, and we replaced her as soon as we could. As buyers, we never had a contract with any agent, but as long as they treated us well, we were loyal. And we were never asked to deceive anyone ever. That would have ended any association pretty much on the spot.

Agreeing that suggesting a lie in the offer is unethical and a huge red flag. Does your daughter have a preapproval letter from a bank? Attaching that would be a lot more useful than lying about down payment - the seller doesn’t care if you put 20% down or 10% down, they just care that you can get a mortgage to pay the full 100%.

My broker did the same thing, but I could only see listings that met my search criteria - towns, price, rooms & baths, that kind of thing. I couldn’t just search for anything that met my fancy.

And there are enough sites that search the MLS site anyway - trulia, zillow, realtor, etc - that any real estate agent who didn’t give you access would just piss off their customers.

US real estate law and practice is very state-specific. What’s routine in California is flat illegal in New York and vice versa. With lots of variation in between.

The OP probably ought to look up the real estate regulation agency in the appropriate state. They will have pdf pamphlets & such providing an intro to the rules and practices for both buyers and for sellers. Reading both gives a good idea of not only what’s expected of your role, but of what you can expect from the other roles. They’ll also be able to explain how agents, brokers, etc., are used in that particular state.

When I was buying a house, there was nothing on MLS that wasn’t also on Redfin. In fact, the one I ultimately bought popped up in Redfin first, before the MLS search my realtor set up for me.

That said, I think it was still worth having a realtor. She handled all the documents, scheduled all the inspections, and coordinated with my lender to make sure I could commit to closing within 21 days – that turned out the be the difference-maker. I beat out a higher (but slower) offer.

A buyer’s agent who actually takes your daughter to see houses is a very good idea. The good ones will go out and tour available properties and then flag some “must sees” for your daughter to go visit. Conversely, he or she can also help your daughter avoid some properties that look good online, but have problems once seen in person.

I would look for someone different than either of the two mentioned here. Some markets do require multiple offers, but lying about the terms of the offer is bad, and may be illegal.

Not necessarily true.

In a hot market, the more cash the buyer has on hand, the better. Because they’re more likely to be able to get that mortgage, or to deal with other random things.

If I were selling a house and I got two equal offers, one with (some kind of credible) pledge to put more down than the other, I’m going with the one with more cash. Pre-approval letters count for something, but as I know from almost having to start over with a new lender halfway through escrow, they are not the final word.

I agree with everyone that lying about this is 100% not ethical.

Regarding the 20% MMM said “He also mentioned something about telling the sellers she is putting down 20% - even if she is not – to make it look like a stronger bid.” I’m curious to know if they meant putting that in the actual written bid or saying it to someone. Obviously that would make a difference.

Bernie maybe advising them to just tell the sellers that they’re going to be putting in an offer (some time in the very near future/next few days) with a 20% down payment. The idea being that it might get them to sit tight for an extra few days, or even table a solid offer, while they wait out this bid…which comes in without the promised down payment.

It’s been a while since I bought a house, does it matter to the seller how much the down payment is? The seller gets their money, more or less, that day. Assuming it’s not some kind of land contract, and I understand, based on what was said earlier, it makes the contract theoretically stronger, but is that all?
Again, it’s been a while for me, do you have to prove you have the cash? That might make sense then. I mean, I can tell my/your agent I have $50k to put down, but it doesn’t mean anything. If I walk into negotiations with a cashiers check, that would make more sense.

As for the gray area. If there is an agreement with Arnie, that would have to be looked at if not, I’m not sure I understand why there would be a question. If she’s worried, she could call Arnie, tell him she saw a property she’d like to look at and see what he says. If he takes her through it and helps her make a bid, great. If he brushes her off, move on.

She can look Bernie up online, I assume, see what others have said about him. If she’s not comfortable with him either, there’s a million other agents that will step in and take the commission.

Thanks for all the replies.

Of note:

[li]She does have pre-approval[/li][li]Arnie has been in contact with her, answering questions[/li][li]The house she is interested in, she already saw (with Bernie)[/li][li]Bernie, it turns out, is pretty new at this[/li][li]I’m not sure if it was suggested that she lie about the down payment verbally or in writing[/li][li]I don’t feel that either agent has done much to earn a commission, but…where does that leave her if she wants to make an offer?[/li][/ul]

Just based on what you said, it sounds to me like Bernie tried to get her business. You said he still a bit green, but he took her through the house and wants her to make an offer, even if he was a bit underhanded about it. Arnie on the other hand, doesn’t even know what she looks like and it’s been a month. He hasn’t seen her, he hasn’t emailed her properties that wouldn’t show up in her searches, he hasn’t stopped by to talk to her, nothing. Maybe he’s got to many other things going on, maybe he just doesn’t care, I don’t know but it doesn’t matter from this side of things.

But, again, if you/she isn’t getting any help from Arnie and aren’t comfortable with Bernie, call the next person.

The seller doesn’t get their money that day. They get it in like a month. Sometimes even longer.

But the reason the seller prefers 20% is that with non-cash offers, there is almost always a finance contingency. A solid 20% down payment improves the chances that the bank will approve that loan. If you go into contract and the financing falls through and you have to re-list the property, you’re going to take a big hit as the seller. People see a re-listed home and assume it failed inspection.

Last time I sold a house, which was admittedly 13 years ago, I walked out with a check. Selling price minus mortgage payoff, realtor fees, and taxes. How else could people sell & buy a house on the same day or a day or two apart if part of their down payment on the new house is coming from the profit on the old house?

Well yes, you’ll get the money that day with an all-cash purchase. But my point was that in the context of 20% down versus <20% down you’ll be waiting either way.

It wasn’t an all cash purchase. The buyer had a mortgage, but the money from that mortgage was divided up immediately - a portion of it went to my bank to pay off my existing mortgage, and some went to excise taxes and my realtor, and I walked out with a check for the rest. The check was for significantly more than the buyer’s down payment too. This was in Massachusetts in 2004, maybe things are different elsewhere.