Dkd -

From your summary, the listing agent does not appear to be the "procuring cause" for the sale. However, this will most likely be taken up between the brokers, the local board, mediation/arbitration or law suit. If the listing agent did not follow-up with you, I am not sure how they can prove they were the cause of your offer.

Buyers should not have to be warned because agents should not be making presumptions about representation. If someone enters an open house I am holding, I ask if they have an agent. If they do not have an agent, I ask for their contact information and follow up. If they appear at all serious about the home I am representing, I immediately discuss with my seller, then the potential buyer, the ability for agents/brokers to represent both parties. If all parties agree, then we confirm this discussion with a signed agency agreement.

I think the listing agent in this case (based on your summary) will have the burden of proof.
As a buyer you are not forfeiting your right to representation by entering an open house.

I am always disappointed when I hear about such situations.
Good luck and congratulations on your new home. I hope the rest of the process goes smoothly.

CJ

Dkd,
The answer is no every part of the Real Estate transaction needs to be in writing, you have no contract in writing between you and the listing agent even if you left your card at an open house. No verbal contract was even executed as a direct result of your viewing the property during an open house.
The dispute is between the brokers and if the property was listed in the MLS system it spells out exactly how compensation is to be paid.
I can't even believe the Listing Agent has the nerve to presume they are the precuring cause of the sale whether they kept following up with you or not; they should be happy they are getting the property sold for their clients. I would run from an agent handleing both sides of the sale!

An Open House is a great way of seeing many homes in a short time without any commitment to any specific agent. Every Buyer can select which agent they wish to work with. I have ( in the past ) paid a referral commission ( 25% of my pay ) to listing agents, for similar situations. However, it was because the buyer did not want or accept the listing agents offer to act as dual agent. Each time, I was literally refereed the buyer by the listing agent to represent the buyer.

If a buyer comes to me directly, on their own without a real and true referral request by the listing agent, I do not pay a "referral fee" for a buyer that did not actually get "referred" to me. No professional would seek such a fee. Being you did not sign an agency relationship disclosure with the listing agent ( at any time ) cancels out the listing agents request for the fee anyway. I suppose the listing agents view is “you won’t get it ~ if you don’t ask”.

The agent was contracted to market and sell the property for the seller. That was their mission. The mission was not to double dip it. The seller should be happy if the house was sold and the agent should feel “mission accomplished”. It is a greedy request by the listing agent to request more out of it.

I hope you enjoy your new home.

The short answer is no. Any buyer is entitled to have whoever they want to represent them. As the Broker/Owner of a local Real Estate company I've obviously been on both sides of the table many times, and although it is legal our firm won't represent both buyer and seller in the same transaction as we feel it's a conflict of interest. If we get a buyer who has no Agent we'll refer them to someone who we know is both experienced and reliable.

If you want to buy a property and don't have representation or don't like the Agents/Brokers you know, get a recommendation of a friend or find someone that sounds good and ask for references. When our clients go to Open Houses on their own we simply tell them to let the Listing Agent know they have representation so that no time/effort is wasted on either side.

It's important to note that your choice of representation is just as important even though the Seller pays the Buyer's Agent/Broker's commission. If you have an Agent who is inexperienced/untrained/lacking in knoweldge/negotiating skills, it will likely end up costing you money. A skilled negotiator can save you thousands of dollars, and a knowledgeable and experienced professional can often save you from buying a property that doesn't fit your needs or has serious issues.

The reasons for the request for fee reduction could be a number of things, but listing commissions are posted on the MLS so the Listing Agent's request to reduce the sales commission has no teeth.

Well, I know it's way past my bedtime, but I might not have time to respond later.

I've been on both the listing side and the buying side of real estate transactions. Lately, I've been more on the listing side. And what I find is very interesting -- I don't know if it's my good looks, bad looks, or what, but I get buyers who are mostly liars -- that's right -- many of them lie to me -- and I don't know why. I've only come across a handful of loyal clients when I least expect them or when I am not seeking anyone's business. But in our current market, it is really strange.

Anyway, I currently work with bank-owned properties and I get a lot of calls from interested buyers every day and any time they tell me they have an agent, I ask that they have their agents call me or urge them to go back to their agents even when they wanted me to be their agent. I don't know if word got out, but recently, many of them claim they do not have an agent. Wow! Isn't that surprising? When I was an agent seeking to do business with buyers, they would tell me they have an agent after I do all kinds of work for them. And who are their agents? Usually a family member, a friend or a friend of a good friend's, but they still come back to me and ask me questions and continue to get information from me. Keep in mind that I would stupidly provide all information they need, like financing, contracts, inspections, etc. only to have their family member, a friend or a friend of a good friend's, write the offer and I do not get compensated for driving them around or showing them homes, etc. (yes, the buyers tell me they don't have an agent initially so I do all of this for them, but they go and write the offer with someone else). Now, does that seem right -- that the family member, a friend or a friend of a good friend's gets paid and I don't? I still had to pay for my own errors and omissions insurance, fuel, phone calls, copies, client lunches, professional dues, etc.

Anyways, I hope that was not too much information. I wonder if that only happens to me because I am such a sucker or just a really stupid and nice person and predators see that! If anyone has insight, please tell me what it is and please be brutally truthful.

The issue with the commission probably came up because 1) your neighbors know who you are -- their neighbor; 2) the seller did not agree to a high commission in the first place (now reneging on the agreed upon fee); 3) the listing agent's broker is not doing a thing to prevent the listing agent from getting penalized; and 4) the next best thing to do is taking the cut from your side of the fee (because your agent's side is the selling side). Your concern, as the consumer, should be, "Is my agent still willing to do this work for me for less money?" He might be your family member, a friend or a friend of a good friend's, etc.

Believe it or not, I was a listing agent a few years ago and had this happen to me. Most of all of the above happened despite my efforts of being able to sell the house for $80k above asking in 8 days. The only difference is the selling agent's fee is 3 times higher than my fee even though I was the listing agent. Does that seem right?

If you want the house, stay with the transaction. The fee is your agent's concern, not yours.

Not to be too presumptive, but my guess is that the SELLER was the first to be upset. After all, you live right next door. It's possible that the Seller wrote that if a neighbor or someone they knew bought the home that they'd get to pay a lower overall commission.... and if you know the Seller, it's possible the Seller even named names.... and put your name in the agreement... so that if you bought they owed less of a commission.

Now I'm not a lawyer so I won't even attempt the right and wrong of it from the Seller & Listing Agent's point of view, but yes, YOU, the Buyer have every right to get any representation you want unless you were a party to the Listing Agreement which it sounds like you know nothing about. However, if the Seller spelled this out with their Listing Agent, THEY (the Seller and Listing Agent) should have dealt with the issue as soon as your offer came in. Sounds like a case of "too bad" for the Listing Agent.

In my experience, the buyer is always free to choose who represents them. It is unprofessional for a listing agent to try to coerce or entice a buyer into a dual agency situation. The listing agent is also putting himself in a difficult situation with his seller too. How can this agent try to get the most money for the seller while at the same time try to get the best price for the buyer? In my opinion the agent can't. The listing agent you have come across and the behavior demonstrated gives the real estate profession a bad name.

Dear Dkd,

I'm so sorry to hear that you had this experience. You are entitled to have YOUR OWN representation and most agents are very hesitant to do a 'dual' representation due to their fiduciary responsibility to their client and potential conflict of interest. In this case, the listing agent had fiduciary responsibility ONLY to the seller and there should be no 'splitting'. END OF STORY.

I'm so glad that formats such as this affords you to ask these questions. As you can see by the number of consistent responses, that this was inappropriate and perhaps this will help to further educate the consumer and their rights.

The agency disclosure information below is correct. I would like to add that you are entitled to your own representation, period. In fact, the National Association of Realtors requires that buyer representation is offered. If I am the listing agent, I cannot offer to be a buyers agent for my listing as I have already pledged my allegiance to the seller. I must disclose this at open houses and any other situation where a buyer is expressing interest in my listing.

Absolutely amazing story. The listing agent hasn't a leg to stand on for any claim on the fee that is paid to your agent's brokerage.
The brokers of both companies will work out the details and you as one of the principals should not have this enter into the negotations for the property. Cooperation agreements exist as the basis for our MLS and even if neither brokerage are members of our association of Realtors all of the contract you probably used spell out representation.
Agency has three steps and they need to be done in order.; disclosure, selection and confirmation. If your agent did his job correctly he should have a disclosure form signed by you prior to the writing of your offer. The selecction happens by you at that point and the confirmation happens in the contract. One step that many agents miss is the second signed disclosure required of your agent from the seller prior to presentation of the offer.
The listing agent cannot let his compensation get in the way of his fiduciary responsibility to his cleint the seller. Any arguments or discussion over the split of the brokerage fee has to be dealt with seperately from the principals negotations for the property.

I am not surprised the agent did not mention representation. Many times when I have presented the disclosure to a buyer who has already been looking at houses, they don't know what it is. I've was at a closing once where the agent whipped out a disclosure form and asked their buyer to sign it! I have a form guests at my open houses fill out, one of the questions is "are you working with an agent". If they are I ask them who the agent is and call the agent later and let them know their customer or client attended my open house. I also have them sign a disclosure.

That is just an unethical agent is all.

Shame on the Seller's agent -- especially after no follow up. When you left your card you should have told the Agent you were just looking as next door neighbors or mentioned you would have your own representation or you should have declined to sign in or leave a business card. Because the Seller's Agent did NOT make an appointment for you to view the property, he/she does not deserve a commission split with your Broker. Your Broker should be answering this question!

Good luck,
Sally

In Minnesota as soon as you make contact with a "customer" you are suppose to disclose agency. This explains all the relationships; sellers agent, listing agent, dual agency and facilitator as well as responsibilities upon first meeting. This is suppose to help with customers/consumers assuming that an agent is working with them and working on their behalf without a signed agreement. As agents we are suppose to explain this and have you sign off that they explained it to you. This is easier said than done, especially at an open house when many people may be coming through. It is something that should be done definitely before a customer begins to reveal any confidential information that may be used against them and may weaken their ability to negotiate an offer.

When I am representing buyers one of the first things I warn them are about this very thing. If they go to an Open House, let them know you are working with an agent (a signed agreement) and they should back off with trying to get their business and get any confidential information. Do not write an offer or reveal your hand...sometimes it is just better to go with them to the open, because we can get caught up in the emotions of finding the "right one".

Your agent and the seller's agent may have to take this issue to their board out with their brokers (mini-court for Realtors) to resolve if it can't be worked out. If you didn't sign anything; purchase agreement or agreement to work with the seller's agent, I am interested to know how they feel justified with being upset and trying to lower the commission.

Dkd, if your account went exactly as you have written, then the listing agent has no recourse. They only have your business card and a poor reputation. The Brokers of both firms (the listing firm and your agent's firm) will probably have to step in to help settle this. Under the circumstances you have written about, the listing agent has no recourse. Stick with the agent you selected, the listing agent is reaching a bit here.

Hi Dkd,
When I do my open houses, I make sure that my "guests" feel welcome and not destructed. There is nothing written that if you go there by yourself without an agent, the listing agent automatically becomes your agent. I mean, come on, listing agent-lighten up. She/He should be glad You are making an offer on this property and as you explained, is your neighbor's. Of course, you need representation. The agent you hired knows you more than anybody else. Go through with the offer and tell your agent to worry about his commission later, like going to arbitration. Now, I am starting to huff and puff for you!!!!!

All the best,
Laarni