Selling/Buying Agent Related to Owner in Md. Short Sale-Is this legal?

Good afternoon all,

I am new to the forum/club and new to short sales. And, I believe, because of that I have encountered a major problem which I feel could have (had I sought competent legal counsel) and should have been avoided.

I went into contract on a short sale. The Realtor “friend” presented me with the deal. She offered to represent me, which I accepted. Then I found out she was also representing the Seller, who is her cousin (my mistake #1). I reviewed the contract and found it to be a standard Md. contract, so I presented my offer and signed off in late April. The Seller signed off two days later. I didn’t hear from the Realtor again until late June. At that point the Realtor said the Lender accepted my offer to release the lien on the property but would hold the Seller liable for the balance, about 20k. Since it was an investment property for the Seller, she was not happy and wanted to see if the bank would waive the balance. They did not. I was contacted 3 after that by the Realtor who said the Seller asked me to raise me offer or withdraw. I refused to do either. So the Realtor said the Seller was taking the property off the market. I complained to the Assoc. Broker in writing who said things like that happen all the time (bs). They refused to compensate me. My intent is to have it mediated and report the Realtor and Broker to the Real Estate Comm. amongst other legal things if I’m not compensated.

I’ve heard that a Realtor who is related to a Seller that’s in default/trying to short their property can not handle the transaction. Supposedly it’s in HB 361. I’ve checked HB 361 and am unable to find it.

Any advice?

Thanks in advance.

duke731 - I am sorry you are going through this. It is my understanding that the realtor can represent any person as long as he discloses if he has a relationship to the principal. In this case, I see two problems - (1) he did not disclose that he was also representing the seller; (2) he did not disclose that he was related to the seller.

I believe you have grounds for a complaint to the Commissioner.

Good luck!

PS: one last point - I believe it is the realtor’s responsibility to prove he disclosed his relationships (not yours).


Thanks for your response. However, since my post, I’ve done some research. Here is what I discovered, in the case of “dual agent”, which is what this agent/Broker attempted, if both Seller and Buyer agree to dual agency by signing a Consent For Dual Agency form, which is what the Seller and I both signed, the real estate company (the “dual agent”) will assign one agent to represent the Seller and another agent to represent the Buyer.