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Rick Miller, Home Seller in Saint Paul, MN

A realtor fee was paid but not disclosed - discovered in lien waivers. What can I do about it?

Asked by Rick Miller, Saint Paul, MN Wed Sep 3, 2008

A new construction investment property did not sell so we moved in and refinanced the loan. The construction co. rep (also an agent) listed a lien to pay a realtors commission but it was not disclosed on the settlement statement nor did I agree to any commission amount or percentage. What can I do about it? I feel I am entitled to a refund of the commission shown in the mechanics lien summary. Is this a normal practice and is theagent who worked for the construction co violating the code of ethics?

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Usually when the title work is done before the closing any liens are found. The seller is also asked about liens at the closing and of course all charges paid at settlement have to be on the settlement statement. I am not a lawyer, and can not give legal advice. If I were you I would start with the title company.
1 vote Thank Flag Link Wed Sep 3, 2008
As well as the potential Ethics code violations, I find it troubling that this lien was paid/satisfied from the proceeds of the sale and wasn't reflected on the HUD-1 (at least from what we can glean here). It could be a case for fraud if that lien satisfaction was not appropriately delineated on the HUD-1.
0 votes Thank Flag Link Wed Sep 3, 2008
Cameron,

I could see violations of Article 1, 2, 5, 7, 9. Without a lot more information, it is merely speculation.
0 votes Thank Flag Link Wed Sep 3, 2008
Hi,

You can contact the Minnesota Association of Realtors for help with this issue. 5750 Lincoln Drive | Edina, MN 55436 | phone: 952.935.8313 | toll free: 800.862.6097 fax: 952.935.3815 | email: info@mnrealtor.com
Website: http://www.mnrealtor.com/

REALTORS® are governed by the National Association’s Code of Ethics. These business principals and guidelines demonstrate the professionalism REALTORS® abide by as members of REALTOR® organization.

The Minnesota Realtor Association plays a critical role in the enforcement activities of the Code of Ethics through Professional Standards Committee’s statewide enforcement system. Hearings are conducted by specially trained and experienced members from across the state. Consumers and members benefit from having a Hearing Panel comprised of regional REALTORS® from both within and outside of the respondent’s local association’s jurisdiction.

Good luck.
0 votes Thank Flag Link Wed Sep 3, 2008
The lesson is that you need to read and review everything prior to signing and closing. However you should contact the agent first, try to get it in writing why he did what he did. Then check with the title company. If you get no response from the agent contact the real estate commission. If you were the buyer the sales commission should have been deducted from the sellers portion not yours. If there was amechanics lein again that should have come from the sellers side. good luck Rick.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Wed Sep 3, 2008
Aaron,

I am fully willing to admit that I could be wrong here, just curious, what article do you feel was violated.

Cameron
0 votes Thank Flag Link Wed Sep 3, 2008
Rick,

You pose a very interesting question. You will want to contact Linda Modlinski with the MN Association of Realtors http://(www.mnrealtor.com). She won't be able to answer whether or not there was an ethics violation, but she will be able to get you the information to assist you in filing the ethics complaint.

A couple of things to keep in mind.:

Not all real estate agents are realtors. You will need to find out if the agent is a realtor, new construction agents are about 50-50. If they aren't a realtor, they aren't bound to the realtor's code of ethics, and therefore they can't be held to be in violation of the code.

Not all new construction agents represent the buyer. They will need to have presented you with an "Agency Relationships in Real Estate Contracts Form" regardless explaining how agency works in Minnesota and at that time they would have most likely told you who they are representing. If they didn't represent you, it would be my opinion that they don't have an obligation under the code to disclose to you the commission amount that they earned as a result of the sale.

You might also check with the Commerce Dept and ask to speak to a real estate investigator, explain your situation and see what they have to say. http://commerce.state.mn.us

Cameron Piper
Web Reference: http://www.campiper.com
0 votes Thank Flag Link Wed Sep 3, 2008
Rick,

As a member of the Professional Standards Committee of the MN Association of REALtORS, it sounds like there might be a violation but there's a lot that goes in to ethics complaints and it very well could be that everything done was considered acceptable practice, depending on the specifics. Here is MNAR's form for filing a complaint: http://www.mnrealtor.com/prostand/codethics.html

Ethics complaints are different from commission disputes and I do not believe that the association can order a refund of a commission between an agent and a consumer so you would need to pursue that with the Minnesota Department of Commerce and/or a court of law.
Web Reference: http://www.AaronSOLD.com
0 votes Thank Flag Link Wed Sep 3, 2008
Hi, Rick!
You need to contact the title company that closed for you first to find out how those funds were distributed to the real estate agent. That amount should have been listed on the HUD-1 settlement statement you signed when you closed on your loan. No funds can be distributed from the proceeds of a sale without being disclosed on the HUD-1. That fee may not have been listed as a real estate commission, but as a lien satisfaction of some sort. If it was not indicated anywhere on the HUD-1, then check with the real estate agent's broker. If the broker and the agent are one in the same, they should be able to explain to you how this happened and why that information was not disclosed to you in way that you understood what it meant.

Was there anyone there to represent your best interests in this transaction? Did you have your own agent or an attorney? If not, and you did that because you didn't want to have to pay an agent or an attorney to represent your interests, this is a prime example of the cheapest is not always the least expensive way to go. It's costing you now, but in a different way.
0 votes Thank Flag Link Wed Sep 3, 2008
Rick you can contact you state real estate commission if you feel there was an ethics violation. You might first call or write the agent and ask them about it.

Hope this helps,
0 votes Thank Flag Link Wed Sep 3, 2008
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