Is it ethical to submit 6 letters of intent when the buyer can afford only one home?

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Real Estate Agent with Bradbury Team Prudential Patt, White Real Estate

Out of the blue, I received a letter of intent on a property I have had listed for almost a year!  The agent never showed the property.  It was a low ball for sure, and only mentioned that the investor will pay cash in less than 30 days.

When replying with our counter offer to the Buyer's Agent, Agent X from "that red real estate company" told me that his client asked him to put in 6 letters of intent on numerous properties.  Sight unseen.  If they got one seller to "Bite"  they would withdraw their other letters of intent.

The property is now $40,000 under the original listing price, and is now priced less than any property has sold for in that neighborhood.  The letter of intent was $35,000 under our current price. 

Is it ethical for an agent to place letters of intent, without including a pre-approval letter, knowing that that buyer can only afford one property?

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Donald Bradbury Realtor  610-952-3578

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Comments 20 New Comment

Rainmaker
1,004,005
Donald Bradbury
e-PRO, Realtor - Bucks County PA - 610-952-3578
Bradbury Team Prudential Patt, White Real Estate
Keith and Robin:  Thanks  I believe you are correct on that one
December 02, 2007 06:49 PM
Rainer
23,918
Jim Willis
Knows Virginia Beach Area Real Estate
Rose and Womble Realty
Ethical and Legal are not the same--obviously. Legal maybe; Ethical--- HIGHLY questionable. Who knows for sure or is it state by state or only if you get caught is it legal and/or ethical. Interesting Post. 
December 03, 2007 11:28 AM
Rainmaker
1,004,005
Donald Bradbury
e-PRO, Realtor - Bucks County PA - 610-952-3578
Bradbury Team Prudential Patt, White Real Estate

 

Thanks Jim Willis:  The agent made it clear the buyer could only purchase 1 property, but they put out "BIDS" on 6 properties.

December 03, 2007 12:17 PM
Rainer
54,699
Chad Baird
Re/Max Spirit

I've submitted more than one intents for investors.  Like you said, they are lowballs, but if we get a bite, the offer is then presented via an actual offer.  Its not unethical. Its a fishing game.  The owner can play or not.  The owner should at least counter the offer contingient upon Proof of Funds and written contracts.  If the buyer cannot produce that, then you know its not a legit offer. 

But unethical?  No.  Its like saying its unethical to advertise " I will sell your home" and the listing does not sale.   You said you could sell it, and it did not sale.  Does that make you a liar or unethical?  I think not.  It's your foot in the door for a listing.  Well letter of intents are a foor in the door as well.  It reduces alot of paperwork. 

 

December 03, 2007 12:58 PM
Rainmaker
1,004,005
Donald Bradbury
e-PRO, Realtor - Bucks County PA - 610-952-3578
Bradbury Team Prudential Patt, White Real Estate
Chad Baird:

I've submitted more than one intents for investors.  Like you said, they are lowballs, but if we get a bite, the offer is then presented via an actual offer.  Its not unethical. Its a fishing game.  The owner can play or not.  The owner should at least counter the offer contingient upon Proof of Funds and written contracts.  If the buyer cannot produce that, then you know its not a legit offer. 

But unethical?  No.  Its like saying its unethical to advertise " I will sell your home" and the listing does not sale.   You said you could sell it, and it did not sale.  Does that make you a liar or unethical?  I think not.  It's your foot in the door for a listing.  Well letter of intents are a foor in the door as well.  It reduces alot of paperwork. 

 

Thanks Chad.  This is a great comment.  Thanks so much

December 03, 2007 02:26 PM
Rainmaker
1,004,005

Donald Bradbury

e-PRO, Realtor - Bucks County PA - 610-952-3578
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