Home Buying in 95130>Question Details

Mallika, Home Buyer in 95054

Can I use 2 agents on same property if first offer is not accepted?

Asked by Mallika, 95054 Tue Sep 25, 2012

We had put an offer on a property last week. That offer was not accepted. We called out agent yesterday to ask if the price can still be negotiated. He said it can be negotiated at a price $25,000 more than your last offer price. When i asked other agent to call the Listing agent, Listing agent said you can offer at the price as we had originally put in our offer last week as there weren't many offers on the property yet. I was wondering if we can change the agent now on new offer as our original agent apparently can't negotiate. Can you please advice if this would be legal to do so?

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17
Michael Emery’s answer
There's nothing 'illegal' about changing agents. However (depending on what you signed) you may be obligated to pay the 1st agent their commission even if you don't use the agent to purchase the home. This is referred to as 'procuring cause' in real estate.
2 votes Thank Flag Link Tue Sep 25, 2012
@Bradley Gill

As a broker, you should know that Agency is not created by an accepted offer nor is agency terminated by rejection or counter of an offer.

In California, Agency is established formally by having the buyer or seller sign, along with the agent, a statutorily-defined disclosure form entitled “Disclosure Regarding Real Estate Agency Relationships”. (Commonly called the Agency Disclosure or AD.) This form should be presented to the buyer as soon as practicable and prior to the execution of a purchase offer.

It is also possible to create an agency relationship by the actions of the parties. It is kind of a “walks like a duck, quacks like a duck then it must be a duck” situation. If an agent acts like the agent of a buyer by doing agent-related activities an agency relationship may be established.

Execution of a Buyer-Broker Agreement does not fulfill the California requirement for disclosure of agency relationship mentioned above. Neither does the execution of a listing agreement. In fact, both of these forms mention the necessity that the buyer or seller be provided with the AD form prior to execution of an offer of listing agreement.

Enough of the tutorial!

We should also keep in mind whenever we discuss Procuring Cause is that a claim for Procuring Cause is brought against the listing broker. The claim is that the broker paid the resulting commission to the wrong party. If the claim is upheld, the listing broker can be compelled to pay the prevailing broker even after having paid another broker.

In this case, the listing broker will need to figure out who is truly representing Mallika. The two agents will also need to know what is going on.

Can Mallika change agents? Sure, unless she has a written contract with the first broker! Can problems arise if it is done without the knowledge of all parties? You bet!
1 vote Thank Flag Link Wed Sep 26, 2012
Hi Malika,

On this issue I must respectfully disagree with my colleagues and say that, in most circumstances, agency between you and the first Realtor has already been formed and depending on the forms signed and clauses checked, you have chosen an agent to assist you for this home purchase and must obtain a release in order to use a second agent.

Further, the second agent faces the very real prospect of having to pay all of the commission to the first agent (the procuring agent) if the home should be sold to you. Does the second agent even know if you have already made an offer on this home or have hired another agent? If not, then you do both agents a real disservice in not telling the truth about the sale.

Whatever is happening, this is situation that needs to be rectified immediately by contacting your first agent, discussing strategy with the agent and determining whether or not the agency relationship would be terminated. Second, you need to thoroughly explain the situation to the second agent including the particulars regarding the offer and counter off an any other forms you signed. Once the second agent knows the facts, it is highly unlikely that he or she will tender a second offer without a release from the first agent.

Agency is tricky business, so before you make another error and find yourself owing a commission to the second agent from your own pocket, review your documents thoroughly and talk with an attorney I you have continued questions.

Sincerely,
Grace Morioka
Allison James Estates
1 vote Thank Flag Link Wed Sep 26, 2012
the key is communication with the listing agent ..
to found out what will make an acceptable transaction for all parties.
this is what your agent needs to do for you.
good luck
1 vote Thank Flag Link Tue Sep 25, 2012
Did you sign a Buyer's Representation Agreement with the first agent who showed you the property?

If the answer is YES, then you may be liable for 2 commissions. (Agent one has signed agreement-agent 2 may get the offer accepted but could forfeit her commission due to an enforceable B.R.E.)

The first may agent may claim procuring cause bu-t the agent who writes the accepted offer is the agent who collects the commission-Unless agent one can prove she indeed was the procuring cause.
It is legal to switch- but you may be liable for a commission if you signed an agreement with agent one.
0 votes Thank Flag Link Tue Sep 9, 2014
Your first agent has precurring cause. It always amazing me that people don't do their due diligence in picking an agent.
There are a ton of bad agents. But there are good quality educated ones that people should seek out for the purchase of one of their largest investments.
Research and interview!
Web Reference: http://www.LauraCoffey.com
0 votes Thank Flag Link Fri Sep 28, 2012
Hi Mallika

You cant. An offer was turned in using the first agent with who you signed an agency on that property.

Check with a lawyer. But should you close with the 2nd and the First Agent decides to come after you on the close, you Pay.

Goodluck.
Perry

http://ruthandperry.com/
0 votes Thank Flag Link Wed Sep 26, 2012
Or agent 2 forfeits her commission, Was there a BRE signed?
Flag Tue Sep 9, 2014
Thanks everyone for your comments. I think that, because the buyer must sign the AD form, buyer and selling agent together acknowlege the formation of agency with the first agent and, moreover, it discloses that same agency relationship to the Seller and the Listing Agent for this home when the offer is submitted. Since this is a standard form for all purchase offers, I have no doubt that it was signed and forwarded to the seller and his/her agent.

So with respect to this one home sale, I would still feel that the first agent is, in fact, the agent for the buyer, and that a second agent--if he or she should choose to represent the buyer in the purchase of the very same home--would be interfering with an ongoing agency relationship. This would apply only to this home. Keep in mind I'm not an attorney--just an agent with an opinion about 'fair play.'

As for any other property that the buyer is interested in purchasing, certainly, the AD or the contract signed for this home does not necessarily bind the buyer to the first agent. However, if a buyer broker agreement was signed at any time by the buyer (and many of us DO require this to be signed), then the buyer cannot use a second agent without being first released by the first agent.

More importantly to you, Malika, I think you should be fair and upfront with both agents in this matter. If you've made an offer on one home with an agent--even if the first agent were to agree to a release--it would look very suspicious to the seller and the listing agent to come back with a second offer and another agent. With the market being highly competitive and sellers having a choice between buyers, it would not be in your best interests to indicate that you may be a "difficult buyer" by showing that your agents are changing just with one transaction.

Talk to your first agent, work it out, and get your revised offer or a counter back to the seller. The most important issue here is getting the home--if that's what you want. Shouldn't you try to do that with the least possible repercussions?

Good luck to you!
Grace
0 votes Thank Flag Link Wed Sep 26, 2012
Hi Mallika,

Yes, definitely. If you are not happy with your current agent, by all means, you have the right to move to another agent!

Respectfully,
Diana Valverde
Davey Real Estate
408-693-7463
0 votes Thank Flag Link Wed Sep 26, 2012
Hats off to Michael for a correct answer and to Grace for an outstanding response!

Agency HAS been formed with your first agent and, if you submit another offer with someone else, that second realtor will owe the commission to the first.

Sit down and have a heart-to-heart discussion with your first agent – show them this post, if necessary. Explain what the listing agent has to say and then ask them to submit a counter for you. You are employing your agent to act on your behalf – they need to do what you instruct them to do or you can ask them for a removal of agency in writing so someone else can act as your agent.
0 votes Thank Flag Link Wed Sep 26, 2012
If a top agent submitted an offer for you, I would be very surprised if she quit trying to do everything she could to get an offer accepted. Perhaps the listing agent told your agent they wouldn't consider your offer unless it was $25,000 higher and your agent just accepted what the listing agent said.

Your choice of agent can have a great impact on whether your offer is accepted or even if a counter offer will be made. Your agent should be providing credibility to your offer, reading the nuances of the sellers response and planning your next move.

Recently I was competing in a multiple offer situation. The listing agent came back with a multiple counter offer to several agents. I was the only agent to counter the counter offer and got the home at the first price my buyers offered ... no increase in price. So, yes agents can make poor choices and retreat too soon or counter with a higher price when they don't need to.

A knowledgable experienced agent can make a big difference in your results. If your first agent wasn't a top agent, replace her. If your first agent was a top agent, she should be explaining what your next best move should be. Your agent should also be making it clear that a meaningful counter offer is put in writing with conditions which if accepted create a binding contract. A verbal counter offer is nothing more than talk intended to get an acceptable offer. Above all, your agent should make you knowledgable enough to commit to an action plan. You may be nervous given the amount of money involved, but you will understand what is a good plan of action and want to carry it out.

I hope you make good choices and are succesful,

Juliana Lee
650-857-1000
Top 3 agent nationwide at Keller Williams Realty
Web Reference: http://www.julianalee.com
0 votes Thank Flag Link Tue Sep 25, 2012
Yes, you can change an agent at any time. Especially if the agent does not represent your interests to your satisfaction.

On the counter offer - did you get it in writing? If it was just a verbal "encouragement" to increase your purchase price they did not commit to negotiating with you. Normal procedure is for the seller to accept the purchase offer with subject to a counter offer acceptance section initialed and return it to the buyer. If this did not happen the sellers just rejected your offer.
Web Reference: http://talisrealestate.com
0 votes Thank Flag Link Tue Sep 25, 2012
As far as I know, as long as the previous offer was not accepted, and as long as you did not sign an exclusive buyer broker agreement with your agent, then you should be able to write another offer with a different agent...

But, why do you feel that the original agent you submitted an offer with cannot continue to assist you? And did you supply the seller with recent sales comps in the area to assist with supporting the price in your original offer?

Sometimes sellers may take offense if offers are submitted lower than asking price, especially if the recent sales comps support the listing price...remember, if the subject property is the seller's home then more than likely they have many fond memories in the property. This can affect the way in which a seller may react to a lower-than-asking price offer, sometimes with a counter and sometimes with a simple rejection of your original offer.

Best of luck...
0 votes Thank Flag Link Tue Sep 25, 2012
Hi Mallika,
Then negotiations have begun. Ask your agent for an up to date CMA, examine the data, decide how much you like the house and make a counter offer.
0 votes Thank Flag Link Tue Sep 25, 2012
Thanks everyone for quick response! Yes, we got a counter offer from seller last time to increase the bid but they did not say how much. So we waited..
0 votes Thank Flag Link Tue Sep 25, 2012
if they gave you a counter : what did it say ? something like giving your highest & best offer?
do you know how many offers are there are?
Flag Tue Sep 25, 2012
Congrat...Now just wait a few days and still haven't heard from seller, ask your agent again.
Flag Tue Sep 25, 2012
Hi Malika,

Yes, you may change agent for the same property. However, if in the previous RPA and there is a check mark for Buyer Exclusively, then I don't think you can change agent without owning him/her commission.
Talk to your agent to find out what seller wants and IF no offer has been accepted, resend it with new offering price.

Good luck to you!


Gabriel Nguyen
1-STOP Realty Group
900 E. Hamilton Ave. Suite 100
Campbell, CA 95008
408-426-1441
DRE#01463101
0 votes Thank Flag Link Tue Sep 25, 2012
Mallika,
I would bring what the listing agent told you to your original agent and either submit that offer again or one just a little bit higher. Negotiating on property ultimately comes down to what's in writing, so a written offer means something.
Did the seller's counter your last offer or just ignore it? If they ignored it, they likely felt it was a lowball offer, if it was that is there prerogative. If it was a reasonable offer, resubmit with a CMA supporting your position and hope they are willing to listen to reason.
0 votes Thank Flag Link Tue Sep 25, 2012
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