Home Buying in New Hope>Question Details

Ellen, Home Buyer in Plainsboro, NJ

If I start to work with a new realtor, will the former realtors have any right to a commission? I was really

Asked by Ellen, Plainsboro, NJ Tue Jan 6, 2009

unhappy with their service. Although I did see quite a few properties with them, I always felt pressured by them to buy something. They were also very lax about getting information to me that I'd requested about recent sales in the area. While I was working with them, I went to an open house to look at a property that I had asked them about, (but did not go with them to see it). The property appears to have been taken off the market recently (I can't find any evidence that is has sold) and if it comes back on the market, I might be interested in buying it. I'm concerned because I may have signed a guest book stating that I was working with them. (Can't remember). Thanks!

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Hi, Ellen-

I've specialized in buyer agency for over ten years, and have been on both sides of this story. Anyone who has been in the business for any length of time has lost clients to another Realtor and picked up clients from others. It can be a little unnerving to be on either side of this equation, but it's something we all come up against and deal with.

There are a few different issues with your situation. One is which agent will receive the cooperating compensation from the listing agent. Another issue is what, if any, obligation do you have to pay the original or the new agent.

Procuring cause is a complex issue, and not something that can be easily determined. There is no one event or action that automatically says one agent brought the buyer to the table and, therefore, gets the fee. It has several components, one of which is that the chain of events that points to one agent or the other must be unbroken. That chain can be broken---by either the consumer or the professional---overtly with a written declaration or through abandonment. That is, you or the Realtor can state in writing that the relationship is over, or it can be assumed it's over if one of you stops communicating with the other over some period of time.

If you had no written agreement in place, it will be simpler to move on to a new agent. I'm not familiar with your state's laws, but you can probably terminate any implied agreement with your original Realtor by sending him or her a letter or an email stating you wish to end your relationship. If you did have a written agreement in place, you can still send the letter to terminate, but it probably won't be clearly ended unless s/he sends you a letter to confirm it.

(BTW, if you were working with an agent who doesn't use a written agreement, that's a sign you were probably working with someone inexperienced. You want to work with a professional who has it together enough to do business in a way that guarantees they will be compensated for the work they do. Listing agents don't spend their time and money marketing property without a signed agreement. And if an agent can't protect their own ability to get paid, what makes you think they'll protect any of your interests?)

If there is no easy way to terminate your relationship with the original agent, I would recommend sitting down with your new agent and telling them everything there is to know about your situation. S/he will then lay your options out in front of you and let you choose what works best for you.

One possible solution---if it's appropriate---is for your new agent to offer a referral fee to the original agent to buy them out of any express or implied agreement you may have with them. Again, I'm not in your area, so I don't know what's generally done in these situations, but I do know that the offer of a referral fee can heal a lot of wounds.

If you don't already have a new agent in mind, I would recommend choosing a Certified Residential Specialist (CRS) who works in your area. CRS's comprise only about 3.5 percent of all Realtors, but we account for approximately 25 percent of all the residential real estate business in the U.S. The CRS designation is the most difficult residential designation to attain, and since you have to have a proven track record in order to earn it, there are no newbies with a CRS. If you would like, I would be very happy to put you in touch with a first-rate CRS in your area.

And whatever you do, I wish you the best of luck!

Bill Kuhlman, CRS, GRI, ABR, CBR, ASR, C-CREC, SRES, RECS
Broker/Owner
Kuhlman Residential Real Estate
2007–2008 President of the Board of Directors for
MassBuyerAgents.org
781 444-1399 (phone) (fax) 781 343-4077
http://www.BostonAreaHomesOnline.com

Click Here to Receive a Free Report on Current Market Trends in Your Neighborhood


Oh, by the way, I’m never too busy for your referrals.
1 vote Thank Flag Link Tue Jan 6, 2009
Most of commission disputes in Minnesota are resolved in Arbitration. I think even the Realtor Assoc forbids agents to go to court for commission . Here in Minnesota Cause of Procurement is the main deciding factor.
0 votes Thank Flag Link Mon Jul 23, 2012
Most of commission disputes in Minnesota are resolved in Arbitration. I think even the Realtor Assoc forbids agents to go to court for commission . Here in Minnesota Cause of Procurement is the main deciding factor.
0 votes Thank Flag Link Mon Jul 23, 2012
If you signed a buyer agreement then you are obligated to use that agent for the term of the agreement. Once that agreement has terminated you are free to sign another with another agent or just use any agent you choose. In 24 years I have maybe gotten 1 or 2 people to sign one, I don't really like them since they do more to lock a buyer to an agent than they do anything for the buyer. I know, I'll hear from all the agents saying they do more blaa blaa blaa with a buyers agreement but if a buyer wants to work with me they will and if the want to go somewhere else they will. With that said, here in NC Procuring Cause is about as dead as 7% commissions on residential. The courts hardly ever, if ever, rule in favor of it anymore and it will cost the agent more in legal fees than they will collect. So when was the last time anyone ever filed a suit for Procuring Cause? I know of no one to ever try it and only read about it from days gone by.

Like Bill said below (and I gave him a thumbs up) we have all lost buyers and picked up buyers that worked with other agents. Sometimes you just know they must have because they have seen this one and that one but not that one or this one. I don't ask and they don't tell most of the time. I just ask if there is a buyers agreement in force and if not - out the door we go to look at homes.

I would not worry about procuring cause, go find the house you want with an agent you like to work with.
0 votes Thank Flag Link Sun Dec 12, 2010
You have no liability to this agent unless you have signed a Contract for Exclusive Right to Represent Buyer. (what we call a Buyer's Agreement). Then you must ask him or her if you can cancel the agreement. Most agents should be willing to honor your request and cancel it. But be sure to get it in writing in order to protect yourself. Otherwise, you could find yourself in court and you will be liable to pay them whatever commission percentage you agreed to in the contract,even for a property you may purchase with another Realtor.
Web Reference: http://www.cathyabboud.com
0 votes Thank Flag Link Sun Dec 12, 2010
Dear Ellen,
Unless you signed a "buyer agency agreement" or contract with an agent, you are under no obligation to work with a particular broker or agent. If you did sign an agency agreement, you would be bound to the terms in the contract unless it expired or if you were released. You may have signed an "open house book" but that does not bind you to working with a particular agent/broker. The PA Consumer Notice explains diferent types of agency agreements in Pennsylvania. Please contact me if you'd like me to explain this to you or if you would like me to search for this or any property in the new Hope/Solebury or Bucks County area. This is assuming you do not have a buyer/agency agreement.

Best Regards,
Frank Dolski
Coldwell Banker Hearthside Realtors-Lahaska, PA
f.dolski@cbhearthside.com
215-794-1231 x103
215-794-1070 (main)
215-803-3237 (mobile)
http://www.FrankDolski.Com
0 votes Thank Flag Link Sun Feb 22, 2009
Wow - Thank you all for such informative and thoughtful responses - I truly appreciate it. (As it happens, I did not sign a contract with the realtors). I think I would have been better off if I'd had any one of you representing me! Also, I must clarify one thing - - I'm very embarrassed to inform you that I must have inadvertently entered the wrong information on my question - I was looking in New Hope PA, not MN - I apologize if you all were trying to figure out where Plainsboro MN was ;-) (Plainsboro is in NJ - across the river from PA where the property taxes are half of what they are in NJ).
Thanks again for your insight - I have some homework to do, but at least now I have some good information to go on.
0 votes Thank Flag Link Thu Jan 8, 2009
Teri and Ellen,

I can admit when I am wrong and in this case I didn't read the 2nd paragraph of Teri's answer. She does go on to give an explanation of procurring cause. Kudos to a great first answer Teri. Please understand that my intention was not make you look bad by correcting you, but rather to make sure that the consumer was properly informed - since that is what we are all here for anyway.

Cameron Piper
Web Reference: http://www.campiper.com
0 votes Thank Flag Link Wed Jan 7, 2009
HI Ellen!

Just to clarify...If you read my full answer to the question, it does explain that it all depends on procuring cause and the contract. I gave an overview of what it is but there are several situations that could arise and I as I am not an attorney I refrain from giving legal advice or saying that there is no legal leg to stand on for a commission. A contract is a piece of paper but also a legal document. There is a chance that if you have a contract with an agent and you intend to buy a home that that agent showed you, they could be entitled to a commission.

Ellen, read your contract, if you have one and contact a REALTOR and/or an attorney that you trust and discuss the specifics of the situation with him/her for advice on how to proceed should you decide to move forward with the transaction. If you do not have a contract and the listing agent was the same agent as at the open house, the agents should be able to work out something to the satisfaction of both brokers and clients.

Best of luck!
0 votes Thank Flag Link Wed Jan 7, 2009
Ellen,

I want to clarify a couple of items.

1. Terri stated (Sorry Terri):

"Did you sign a contract? Would you buy any of the homes that you saw with the other agent? If you can answer no to both questions, then the other agent would not have a right to the commission in Minnesota."

The reality is that the agent who holds the procuring cause (do a Trulia search for this term - you will have plenty to read about) of the sale would be the agent who is entitled to the commission in the transaction. A contract is only one piece of many that are considered under procuring cause guidlines and whether or not you would buy any of the homes that the agent showed is fairly imaterial to this house.

2. Susan stated (sorry Susan):

"If you signed a contract, there is a place on the bottom of the first page that addresses the scenario you describe. Meaning, if you cancel your contract with that agent and move forward in purchasing a property that they showed you while you were under contract, you would still be liable to see to it that they get paid the compensation due under that agreement."

If you and the buyer's agent agree to cancel the contract or if the contract expires (see the end date on line #6), they must provide you a list of homes which they have shown you or that you have shown an interest in within 72 hours - if they hope to receive a commission under the terms of the agreement. This list of homes will be valid for "X" (see line #33) number of days. Meaning that you if they provide you a list and if you buy it withing "X" days then you would owe the broker a commission under the terms of the contract.

I can almost guarantee you that your agent won't provide you a list of homes, and it doesn't seem as though the agent would have even a leg to stand on for procuring cause. However, I do think that it is in your best interest to try and clear the air with your agent. If your contract hasn't ended and you would like to end it - talk to the agent about what you are disatisfied with and give them a chance to improve if they don't then tell them that you would like to cancel. Keep in mind however that the contract is cancellable by MUTUAL written consent and they don't have to let you out of the agreement.

Cameron Piper
Web Reference: http://www.campiper.com
0 votes Thank Flag Link Tue Jan 6, 2009
You need to refer to buyers agent rep agreement you signed it will govern per terms and conditions what you can or cant do.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Tue Jan 6, 2009
Hi, Ellen!
In MN, Teri is right. If you signed a contract, there is a place on the bottom of the first page that addresses the scenario you describe. Meaning, if you cancel your contract with that agent and move forward in purchasing a property that they showed you while you were under contract, you would still be liable to see to it that they get paid the compensation due under that agreement. However, if it's a property that your agent had nothing to do with, never even set up a showing or anything, chances are you'd not be liable for any compensation to them. I would suggest, if you are in doubt, talk to an attorney or, perhaps, get a list of protected properties from your current agent, just so you're clear.

And, so sorry you were unhappy with your experience with your agent. In today's market when agents are so hungry to find loyal clients, it's sad to hear that someone didn't follow through on the expectations set up in the arrangement.
0 votes Thank Flag Link Tue Jan 6, 2009
Ellen--Did you sign a contract? Would you buy any of the homes that you saw with the other agent? If you can answer no to both questions, then the other agent would not have a right to the commission in Minnesota. (Is Plainsboro in MN?)

If you have signed a contract or if you plan on writing an offer on a house that you saw with an agent, then yes that first agent was the procuring cause to your purchase as they first introduced the home to you. And they could have a right to part or all of the commission for the buyer's side of the transaction. In your scenario, the agent that showed you the home at the open house could have a right to part of the commission since they were the procuring cause.

Hope this helps answer your question....
Web Reference: http://terieckholm.com
0 votes Thank Flag Link Tue Jan 6, 2009
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