14 Jul Realtor underpriced my house by $32k, what should I do?
My realtor underpriced my house. He convinced me I'd be lucky to get what we listed it for, and then advised me to accept the first offer we got, even before the open house because he told me he wasn't sure how many more we'd get. He was out of town on vacation that weekend so another agent from his office handled things. The open house was packed. A neighbor told me that they heard a lot of people wondering out loud why the house was priced so low.
We got 15 backup offers, many of them over listing price, one of them $30k over list price and another that had a condition to make it $1000 more than the next highest offer, not to exceed $50k over list price. We could have had a bidding war on our hands had we waited until after the open house to consider offers.
The realtor tried to downplay the other offers, saying that some of them weren't serious and that people always try to lower the price based upon the home inspection. That may be true, but $30-$50k is a lot of room to come down in price and still sell for thousands more than we did.
Realtor also downplayed the offers by saying that the price is still dependant on appraisal. I wanted to know just how much the house was underpriced so I got my own appraisal. Appraisal came back for $32k more than the listing price.
I have worked with this realtor for over 10 years, and he's been competant and professional in the past. I believe he was neglegent in pricing my home and not advising me to wait for other offers. I think he priced the house too low because he didn't spend the proper time doing market research since he was too busy preparing for his vacation. I think he wanted to get the house under contract before he left on vacation and that is why he didn't advise me to wait for other offers. Even if it wasn't for the selfish reason of wanting to enjoy his vacation more by having his comission secured first, it was still neglegent of him to not anticipate more offers. I'm not saying he should have known we'd get 16 offers, but he's a full time real estate agent who should have had some idea what the market was like and should have anticipated quite a few offers. The way he presented the first offer to me was like he was uncertain we'd get any more.
Whether intentional or not, he also withheld the fact that he was going on vacation until after the house was listed. He might have been worried I'd list the house with another agent, but had I known about his plans I would have waited another week to list the house. I'm mad as hell now and incredibly dissappointed with him. In hindsight I should have done more verification myself, but after 10 years working with him I thought I could trust him, and if I have to verify everything he says what's the point of even using a realtor, I should have just done FSBO.
What are my options at this point? We haven't closed yet, but there's no way the buyers are going to cancel the contract because they really want the house and they know what a good deal they got. Do agents ever just give up their comissions when they screw up this bad? I know realtors carry E&O insurance, but would that cover a situation like this, and wouldn't I have to sue him in court for that insurance to pay out?
I haven't discussed any of this with the realtor yet, but he must know I know he screwed up because he usually contacts me a lot and his communications with me have been quite terse since the 15 offers came in. The situation sucks because I really liked the guy, so I'm torn between calling him out on this and taking some kind of action to recover some of the loss or just saying nothing and never using him again. Advice please.