Question Details

Todd, Home Buyer in 44039

Expired listing - does original broker still get commission even though relisted with another agency?

Asked by Todd, 44039 Mon Sep 24, 2007

Our listing expired with an agency. However, there is a 120-day holding clause which states if any person decides to purchase house after 120 days of expired listing, agency still entitled to full commission, "Unless listing is relisted with another agency"

In our unique case, the potential buyer is a real estate agent with a different company. So, if buyer relists house, then buys it, is original agency still entitled to commission? Original agency did show house while under contract.

Help the community by answering this question:

Answers

39
Todd,

Two posts... Read this one first.........This has been one of the more difficult answer I have tackled on Trulia. I have spent quite a bit of time thinking this through. As a NJ Broker, I wanted to address common practices (verbal counters), Foxtons (nontraditional structure), and provide advice, while maintaining professional standards of courtesy to competitors, fellow Trulians, and the companies and individuals involved with your specific property. See other post to come soon for explanations of Foxton structure, holdover clauses in our MLS agreements, and verbal offers as practiced in real estate in New Jersey. My approach, here, is to present topics to you, Todd, to evaluate and questions for you to ask, of yourself and others in making decisions about how to go forward.

1) Do you believe that your property had adequate market exposure and is priced properly? An overpriced property that is widely marketed will still not sell. If it is substantially overpriced, it will not even produce showings. Did you have showings? How many? Can you ask F to provide you documentation or data that will show you volume of inquiries? If these showing were few, was it because of price? Were all buyers who had interest able to see the property with ease? If it becomes difficult to see a property, a buyer will move on. Were you flexible in showing arrangements? Was F quick and responsive in arranging showing appts to either their buyers or coop agents? (Foxtons is in the MLS now. There was a time when they were not.) If you had few showings, was it price, inability to show easily, lack of marketing, or was it just as slow for you as everyone else?

2) Do you believe that the buyer offer made is a good offer? You don’t want to walk away from a good offer. Are there other potential buyers for your property that were missed? Refer back to the questions in #1.

You repeatedly expressed dissatisfaction w/ current listing broker (F). If you are frustrated w/ the service, you now have a choice to choose alternate representation. As a Broker, if a former seller tried to list solely for the purpose of avoiding payment, I would turn it over to our attorney. I am not an attorney, and cannot give legal advice. But, I suspect that Foxtons might pursue payment of commission. Ethically, it is wrong to re-list solely to avoid obligation of payment. It is also your right to have seller representation that you believe puts your best interest first. When you pay commission to the listing side, you are paying for marketing and representation. I will not assert that F will or will not represent you well; I don’t know the answer to that. You need to consider if you believe your interests will be represented well, and choose the ethical and legal route to alternatives to secure that representation, if appropriate.

Consideration of re-listing with buyer agent to restructure the commission is definitely not on my recommend list. A listing agent has an obligation to secure you the highest and best contract. How does that happen when the listing agent is the buyer and the buyers agent? Inherent conflict of interest that preclude your right to representation, besides the potential challenges w/ F.

3) What if this buyer did not buy? What would you do then? Would you re-list w/ another Broker/Agent? If so, who? The buyer broker for your current buyer will not waive the buyer agency commission. You asked why. The agent works for a broker and the broker is going to carry this on his/her books, as well as E&O insurance. I could expand a lot of detail, but this is too long already. As a Broker, I would not waive this either. I might negotiate it, but not waive it. If this buyer did not buy, would you choose this person to be the agent to represent you as a seller? Before you knew of this buyer, you knew the listing period was coming to a close. What were your plans?

You might find a listing agent who would provide you market exposure, an updated pricing strategy, and work with you on fees in the event the existing buyer materialized into an official contract. There would be risk in this approach, as the current buyer may not wait, and a replacement buyer may not be found. You could find that 30 days later with a new agent, your showings remain sparse, and regret not wrapping up a contract at full commission w/ Foxtons. Look at your history of showings, the market competition, your price and evaluate what the market might be capable of brining you.

If you are going to legitimately pursue new seller representation and look for potential buyers, that is your right. To re-list solely to avoid an existing obligation is wrong, and possibly will work out costing you more. You mentioned that you have an attorney.....a real estate attorney? I hope.

Deborah
2 votes Thank Flag Link Wed Sep 26, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
I'll be honest, Todd. It may very well be possible to relist with this agent, who would then proceed to purchase it from you, but it sounds highly unethical. If the sole purpose of the listing is to avoid paying a legally due commission, this new agent could be on the hot seat with the local Real Estate commissioner regardless of your responsibility. I am not an attorney, and I am not privvy to your contract, but this is a bigger question than do you have to pay the commission. It is also a question of should you pay the commission. Legal obligation aside, would you consider doing such an end-around on the agent who actually produced this buyer through his/her time, effort and expense the right thing to do?
2 votes Thank Flag Link Mon Sep 24, 2007
Great info Deborah! Foxtons definately operates differently. My agent current has 117 listings to himself. Now how can he possibly devote good client care with that many customers. Its impossible. Thus, counter-offers do not get communicated to seller, other agents wanting to see the house tell their buyers dont bother - they are with foxtons - making an appointment is a chore. I happened to cancel an appointment plenty time in advance. Well, guess what - they buyer and agent knocked on my door at that time. They never got the message from Foxtons. Well, I showed them a house that was ofcourse not ready anyway - the agent said I tried to tell my client dont bother with the listing due to agency - but buyer really wanted to see it regardless. Said it right to me. Said how difficult it is to setup an appointment, etc.

Needless to say, Im sure Ive lost alot of potential buyers just because of my representation.
1 vote Thank Flag Link Wed Sep 26, 2007
Hi Todd.......and everyone else, too!

My suggestions to Todd are in the other post put up a short while ago. This is information about some of the topics brought up in this thread: Foxtons (non-traditional structure), Verbal Counters, and Hold Over Clauses in MLS agreements.

FOXTONS: Foxtons agents are employees, complete w/ company car, base salary, benefits. There are listing agents and buying agents. These agents do not market themselves to build their own business. They function as staff employees representing their employer making sales appt calls on the leads generated by the company. Agents are recruited to work at Foxtons with the lure of no cold calling or prospecting. I would assume the company has some expectations that the salespeople close a % of the listing appts that are set for them. While a listing agent with 100 listings in a traditional agency might be a rainmaker, the Foxtons model is quite different and the same would not ring true. The various functions performed by an agent in a traditional model will be performed by a number of different depts and individuals at Foxtons. The listing agent is not developing business for himself as an independent contractor. The listing agent has a job, and other staff members have their job(s). Each Foxton employee handles a very large number of files.

MORE ON FOXTONS: No criticism or defense of this model is offered; simply an explanation. Regardless of whether the duties are performed by one listing agent, or the various staff and departments, clients only care that their needs are met. Todd candidly communicates that his expectations were not met, and that is core the next steps for Todd and the decisions he makes A side train of discussion is to ponder whether the cause of Todd’s failed expectations the result of the Foxton’s model? A traditional model can also fail to deliver customer care. The standard of care can fail to meet a consumer’s expectation in any type of business model. I, as a Realtor, have encountered difficulties showing Foxton listings, and I have encountered difficulty obtaining information on property listings, but those experiences are dated. I have not shown a Foxtons listing in a long time; and I haven’t worked w/ many buyers in recent times. Those buyers I have been working with have concentrated on market niches and price ranges where Foxtons has few listings.


VERBAL COUNTEROFFERS: Common to our neck of the woods. I cannot speak for every nook and cranny in NJ, but, without a doubt, it has been that way through the several counties that our company crosses. A typical protocol would be a written offer is written on the contract, and presented in person or via fax to the listing agent. On occasion, offers are presented directly to the seller, with the listing present. Counteroffers are verbally exchanged until mutual agreement is verbally agreed upon, at which time changes are made, initialed and both parties sign. The law permits a period for each party to have an attorney review the contract before it becomes binding when real estate licensees prepare contracts. It is my guess that verbal counteroffers became an expeditious route for communications. I will not present an offer that is not first presented in writing. I participate in verbal counters and negotiations always. I have never had a co-op agent ask me to put a counter in writing, but I have heard of it. This might be a Foxton’s requirement. (I don’t recall ever presenting an offer to Foxtons, so I don’t know this). I have participated in bid wars and re-submitted an offer with changes in writing as “Final and Best.”

MORE ON VERBAL COUNTERS: If the buyer agent is accustomed to participating in verbal counters, she needed Foxtons to advise her of any requirements that a counter be written. I would not be too quick to criticize the buyer agent on this, since she may have only been following common practices.

HOLD-OVER CLAUSES in the MLS agreements I participate do not require any submission of buyers to protect the listing brokers claim to commission. Evidence that the property was shown during the listing period is all that is required. Time periods for hold-over clauses vary greatly and are negotiable. Discussion about the enforcement of that is a contract law discussion. I can only share that, I, as Broker, would turn the file over to my attorney for him to handle if I believed a seller relisted solely to avoid paying a commisison.

No portion of this, or any of my posts should be construed as legal advice. I am not an attorney, and legal advice should come from your attorney.
1 vote Thank Flag Link Wed Sep 26, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
Hi Todd,

Glad you arranged a win-win deal in this situation.

YES. There is ALWAYS an attorney review! Even though you say there are no Realtors in this transaction, there actually are. The buyer is a real estate agent and should know the whole drill. She has 'one-up' on you because this is her business. Did she indicate she is planning to waive the inspection period? Have you seen the contract and reviewed the terms? Has the contract actually been accepted? If so, when? Generally there is a 5 business day review (or a bit longer, depending on the state).

Since you are representing yourself, I urge you to seek the representation of a real estate attorney. It is very important you have somebody guiding you through the process, especially after all you've been through.

Good luck!
1 vote Thank Flag Link Wed Sep 26, 2007
Patti Pereyra, Real Estate Pro in Chicago, IL
MVP'08
Contact
Thanks for your indepth input.

My intentions was to always pay to F agency what is due. However, due to them not answering phones, not returning calls, not making it easy for potential buyers to arrange a viewing, well you get the point--it was always tough.

I reached an agreement with foxtons stating I will pay them 2% commission of sale at time of closing. I will also represent myself as to avoid the commission fee which my buyer would have to pay if foxtons represented me. So, a special contract will be written as this will be a private sale, no mls, foxtons get 2%. So all 3 parties win. Buyer does not have to pay commission. Sellor does not pay the 4%, Foxtons still gets their money.

So, now we are at the contract point. OMG! So, since there are no real estate agents involved, is there a attorney review?
1 vote Thank Flag Link Wed Sep 26, 2007
HI Todd,

I am in your backyard. I live in Rumson. My office is in Shrewsbury. And, yes, Foxtons HQ are within 5 miles of here. I am very familiar with the MLS listing agreements for 5 MLSs to which our company maintains membership. Can you tell me what town you are in, as that will identify for me which MLS your property would appear and the terms for that MLS. I suspect you are in Monmouth/Ocean, but you could be Middlesex or another. I will reply later, as I am on my way out the door right now.

Deborah Madey - Broker
Peninsula Realty Group
732 530-6350
1 vote Thank Flag Link Tue Sep 25, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
Hi,
Thanks for all your comments Uti..Very helpful. The listing agreement was for 6 months. It seems I signed 2 seperate documents. The original listings had expiration date of 08/07 (we listed in 03/07). The holding stated 09/07 exp (but the 8 was written over with a 9). It was obvious the original document should have stated 09/07 instead of 08/07. Error by agent. Anyway, I faxed that over to real estate lawyer and I dont think it mattered much.
Yes, my agent was rude and really didnt care much. He actually refused to speak with me during a 2 month frame and only would deal with wife. Again, the F agency - the walmart of agencies. I even tried to cancel after 24 hours of signing but he said I couldnt. Later found out I could..
Anyway, thats old..So, I left off with buyer going to contact F agency tomorrow and see if they will accept a 1% commission. She will talk to main office not agent.
I think I will talk to new lawyers who might have experienced this. Im shocked this is something new...
Thanks again!
1 vote Thank Flag Link Mon Sep 24, 2007
Hi Todd. Thanks for coming back and giving more details. It's always interesting to know what we did not know when we posted our first answers. I would really like to see the whole clause verbatim as I sense that we still don't have the whole story of what the contract says. I agree that you have to go by what the terms of the contract are, but it sounds like this may be a matter of interpretation. If it were a simple matter of looking at the contract, why did the attorney not know what to do?
As Christopher pointed out, it is possible that the brokerage did not do what they had to do to be entitled to compensation after the expiration of the listing agreement (by the way, why do you think the listing expired later than what the contract specified?). Again, without seeing the whole contract, it's difficult to assess the situation.
Based on what the agent said today before he hung up, it sounds like he does not expect to get paid, but of course you have nothing in writing and I would not want to rely on interpreting a verbal statement.
Lastly, I have to agree that not even telling a seller about a counter-offer a buyer made is wrong. No matter how ridiculous an offer or counter-offer may appear to an agent, unless the seller gave written instructions not to present certain offers, the agent has an obligation to tell the seller about any offers that were made.
I would contact an attorney referral service that can give you the names of qualified real estate attorneys in your area.
Web Reference: http://www.go2kw.com
1 vote Thank Flag Link Mon Sep 24, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
Contact
Well Todd, you indeed have an interesting situation here and I am somewhat surprised that a lawyer could not guide you in the right direction. While I believe that this is somewhat of a grey area, I believe that the 120 holding clause was intended to avoid buyers from purchasing directly right after the listing expired. The exception to the holding clause appears to me is intended to protect the seller from having to pay a commission to the former brokerage if the house is sold to a third party through the efforts of the second brokerage. To me, listing the property just to get around the holding clause does not serve the purpose for which the exception to the holding clause was intended. My suggestion is, don't do it.

Also, if this new agent/buyer lists the property, even if it's just pro forma so-to-speak, he and his brokerage owe you a fiduciary duty, which in my opinion would include not to put you the client/seller into a situation that may make you liable to your former broker. Furthermore, this agent also would be representing you as the seller. Do you really want to trust this agent to represent your best interests when this agent is willing to play this listing game to cheat the former broker out of the commission. Sorry, it does not sound right to me. That's just my personal opinion. I am sure you'll receive lots of input from other real estate professionals on this forum.
Web Reference: http://www.go2kw.com
1 vote Thank Flag Link Mon Sep 24, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
Contact
Todd.. This is the notice I received today..

Foxtons To Shutter Operations

Foxtons North America, the North American division of Foxtons, the London-based real estate company known for charging discounted commissions, said last night that it is shutting down because of the housing slump, according to the Asbury Park Press.

The company, which is based in West Long Branch, said it is considering bankruptcy and will continue only with a skeleton crew. It is laying off 350 of its 380 employees.

Foxtons North America was founded in 1999 as YourHomeDirect.com by Glenn Cohen, a Shore-area entrepreneur who then sold the company to Foxtons in 2004. This May, Foxtons itself was sold to a private-equity firm, but its North American operation was left out of the deal.

The above is a copy/paste from NJ Biz eMail alert.
0 votes Thank Flag Link Thu Sep 27, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
FOXTONS is OUT OF BUSINESS!!

Now WHAT!?!??!?! Their MAIN # states they are closed!!!

Now, I should not have to pay them anything since they are closed..Expired listing!!!!

Please confirm.. This never ends!
0 votes Thank Flag Link Thu Sep 27, 2007
Inspections - The buyer appears to be wanting inspections for informational purposes only. Your attorney can clarify this in attorney review and write in to the contract exactly what rights each party has. Of course, the attorney for they buyer must also agree.

Mortgage contingencies are standard, and have a deadline. After that date, the buyer is not automatically entitled to her deposit back for inability to secure a mortgage.

Closing is a process. Each step brings you closer. As different criteria are met or verified, the likelihood of closing becomes stronger. Not all contracts make it out of attny review. Not all contracts that make it out of review will close. The good news is that most contracts that make it out of attny review do close. Mortgage, inspections, title work.....all part of the process.

Because real estate closings in NJ are commonly settled by attorneys, there is no shortage of attnys well versed in real estate. Through the closing process, the seller agent assists and your attny. In the Foxtons model, some of these traditional seller agent duties are transferred to internal staff. You might want to clarify with your agent exactly what you can expect from whom at the listing broker’s office. I do recommend strongly that you have a good real estate attny.

NOTE TO JR....Nothing unethical about an agent buying a property. If an agent were to re-list a property with no intent to market and represent a seller, for the sole purpose of dismissing a hold-over clause, that would be unethical.
0 votes Thank Flag Link Wed Sep 26, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
Todd, some people think that Foxtons uses their own listings in order to generate calls and sell other agency's listings, because they make more money selling those listings than selling their own.
0 votes Thank Flag Link Wed Sep 26, 2007
It goes like this:
If Seller Relists, then same potential buyer who walked thru with original agent wants to buy again after expiration, original agency is NOT entitled to any commission. This is way around paying original commission fee. It is legit and does happen. However, when the buyer is an agent herself, that agent could have fine/disciplinary action by their agency because it is not ethical.

Thats why I had to pay orignal agency their commission even though this will be a private sale.
~~~~~~~~~~~~~~~~

If the buyer originally saw the house when it was listed, then yes you must pay the commission.

Why is it unethical for an agent to buy a home?
0 votes Thank Flag Link Wed Sep 26, 2007
Todd,

There is a clause in real estate contracts that makes the purchase of your home contingent upon the buyer being able to obtain financing. Should the buyer be unable to obtain financing within a specified amount of time, the buyer is legally able to back out of the contract without penalty and receive her full earnest money back. And she is exercising that option. It is a very common contingency.

It sounds like you seem shocked by all of the terms of the contract, many of them which are very common contingencies in real estate transactions.

Again, I would advise you to get an attorney involved immediately. She is exercising her right to an attorney review and inspection period; so should you.
0 votes Thank Flag Link Wed Sep 26, 2007
Patti Pereyra, Real Estate Pro in Chicago, IL
MVP'08
Contact
Hi Todd:

My contract reads that if any buyer who was introduced to the home (while it was listed with me) wishes to purchase it during the first 120 days of the expiration of our agreement, the seller agrees to refer that buyer back to me to coordinate the sale. And yes. I would still be due a commission. If that seller re-lists with another agent this arrangement is voided and I would not be due a commission. You may want to read your agreement closer and see if this is what in-fact it states. Best of luck to you!!
0 votes Thank Flag Link Wed Sep 26, 2007
It goes like this:
If Seller Relists, then same potential buyer who walked thru with original agent wants to buy again after expiration, original agency is NOT entitled to any commission. This is way around paying original commission fee. It is legit and does happen. However, when the buyer is an agent herself, that agent could have fine/disciplinary action by their agency because it is not ethical.

Thats why I had to pay orignal agency their commission even though this will be a private sale.
0 votes Thank Flag Link Wed Sep 26, 2007
Your contract probably reads that if anyone who SAW your home purchases it within the next 120 days you are liable for the commission. This is put into the contract so that people who saw it with an agent don't wait till the listing expires, then approach the owner directly. If it says ANY person, I would not have signed the contract. I don't understand the second to last sentence..."If buyer relists, then BUYS it"? You mean if the buyer bought it, relisted it and sold it, would you be liable for the commission? I would think not, why would you be liable for commssion on the sale of a house you don't own.
0 votes Thank Flag Link Wed Sep 26, 2007
It depends on how your contract reads. You have a legal contract with the origional listing agent. In most cases if you relist the home you do not have to pay the first listing agent. http://www.888siliconValley.com
0 votes Thank Flag Link Wed Sep 26, 2007
She said inspection waived, but in the sales contract she drew up -it says buyer can have an inspection. full 9 yards.. She then emailed me saying :Also, so you are aware I will conduct a home inspection for my own benefit. I won't be looking for any credits on any small issues. You have taken great care of the place! I'm just doing it so I can sleep knowing there aren't any major issues. "
So what is this????? We agreed on price, no inpection. Now this????

Also - She put if she cant obtain mortgage - she gets full deposit back?????
I think I should atleast keep the deposit because I have lost time.
0 votes Thank Flag Link Wed Sep 26, 2007
Yes, Todd, good luck on this. Get somebody in there to protect you, as you can see all the others are protecting their own benefits. Next time when you sell again, give Deborah a call. - I don't know her in person but I have read her many, many replies.

Sylvia
0 votes Thank Flag Link Wed Sep 26, 2007
Sylvia Barry,…, Real Estate Pro in Novato, CA
MVP'08
Contact
Yes, you have an attorney reveiw because your contract was not prepared by an attorney.
0 votes Thank Flag Link Wed Sep 26, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
Buyer now states since she went through listing being represented by own agency - they will be forced to pay a commission to agency of 2%. They cant get this waived. So buyer is now asking me to call foxtons and tell them to not represent me but still we be paid 2%. This way it does not go in MLS, private sale...Does any of this make sense?
0 votes Thank Flag Link Tue Sep 25, 2007
I believe that was one of the reasons why buyer waited for expiration to happen - so they can offer a lower price. Now, the buyer asked foxtons for a referral fee. Foxtons said - no - you are representing yourself. Sellor (me) agreed to pay us 2% and thats it. The buyer is the one moving into the place. So, now buyer has to get approval from broker to waive commission. What the heck? I did all that and willing to pay 2% so this deal is clean. I could have not even notified foxtons, sold it privately, and not pay 2% fee myself. Im not the one getting a break - I still have to pay a commission. I dont know. Gotta love the real estate biz...I can always just pay foxtons the 2% and tell them I represent myself if this is going to be an issue. But I cant see why buyer broker will not waive commission. After all, their employee is the one buyting house for themselves.
0 votes Thank Flag Link Tue Sep 25, 2007
Hi Todd. Well, it sounds like agency F is still getting what they would have gotten had the transaction closed with them. It doesn't seem like there's a difference at all, but at the same time it sounds like they will be representing you in the sale and so you are paying them for that. You are not getting a break from agency F. The break that you might be getting is from the buyer because he is waiving his commission. My question is, did the buyer make a lower offer because you don't have to pay the buyer's side of the commission? Doesn't seem like F agency is giving you a discount on account of the agent's bad conduct. Since the agent has over 100 listings, he is a rainmaker for them and unfortunately, they'll probably not have the necessary discussions about customer service with him. I hope I am wrong, but since they don't seem to feel that they owe you anything, I am afraid I am right.
Look at the bottom line. If you are still ahead, move on and learn from it. It's not worth getting you whole life wrapped around this.
Web Reference: http://www.go2kw.com
0 votes Thank Flag Link Tue Sep 25, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
Contact
I was so curious, I am late to my appt. I just read your entire thread..... it's long. I caught that you are located in Hudson in one of your posts. Will come back and post...late for my appt now.
0 votes Thank Flag Link Tue Sep 25, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
So it does need to be in writing. Thats what I figured..Oh man..Buyer mistakes, My agents mistakes..Well, My agency is Foxtons - they offered 3% at time. But...the day of signing, suprise suprise, I was told oh we just raised it to 4%....So, after signing a billion forms, I was like whatever. Still prob cheaper than rest. So, yes, only reason was commission. Later on I regret it as service is compromised. I did find out my agent was in a bad auto wreck so that can be reason for lack of (or no) communication. But still, someone should have been covering.

So, anyway - foxtons would normally take 2% for themselves and 2% to buyers agent. But since buyer is waiving commission - it would only be 2%. Now, was foxtons still entitled to the entire 4% even if buyer waived commission? Or did I really not negotiate down the rate at all??
0 votes Thank Flag Link Tue Sep 25, 2007
Todd, the buyer is wrong on this one. All offers (a counteroffer is still an offer) must be in writing to be considered legitimate. I'm surprised that your agent didn't at least keep you apprised of any verbal negotiation, but the duty to present all offers extends only to actual offers. Nothing is legally binding without being in writing, so many agents respond to verbal offers by telling the other party to put it in writing. If it's not in writing, it's not real. That said, still strange that you weren't clued in to the shape of the discussion. Reading through this entire thread, I can honestly say that I detest the manner in which your former agent operates, but I haven't read anything that tells me he that he didn't perform the minimum standard of care. Rude, lazy, overstretched ... probably all of the above, but that in itself isn't grounds for nonpayment. He generated an offer and presented the written offer. Despite my disdain for such an agent as the lowest common denominator, you would have a difficult time proving agent abandonment or unethical withholding of offers under the circumstances.

If you don't mind me asking, what led you to list with this agent? I'm guessing his fees were very low? I'm not passing any judgement, just honestly curious how such a lousy agent generates business.
0 votes Thank Flag Link Tue Sep 25, 2007
Hi Todd. Thanks for coming back. I would urge you to get this verbal commission agreement in writing and make sure it states that the new agreement supercedes all prior agreements. I am assuming your agent will not be the same agent that hung up on you, right?

As your question regarding verbal or written counter offer. While it is true that only written offers or counter-offers can be accepted, I still think that not even telling the seller that the buyer verbally came back would be wrong as it is just a matter of keeping the client informed. I would say that the buyer/agent's statement that it's illegal is a very strong statement. He's not an attorney and he should not make these kind of statements as doing so calls for a legal conclusion. The truth is, even if agent from F agency had told you about the verbal counter-offer, you could not have accepted it until it was put in writing. Neither you nor I where there when the conversation occurred and my guess is that perhaps your agent did not handle the situation properly. I am just guessing this based on his other conduct towards you.

In the end, it really does not matter at this point whether the other agent's conduct was illegal or not as I don't sense that you'll push this issue any further. Since you have now at least an agreement with the former agency about the commission and that they'll represent you, I would just focus on what needs to be done to get your house sold. I hope you'll be able to put all this behind you very soon and focus on enjoying a new home. By the way, where are you located?
Web Reference: http://www.go2kw.com
0 votes Thank Flag Link Tue Sep 25, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
Contact
Oh, This came up. I explained to F Agency I did not receive counter offers. They said buyer only put in 1 offer in writing. Thats all there was. F Agency said all offers/counter offers must be in writing. So, I then asked buyer if all was in writing. Buyer stated - no, only 1st one was in writing. The rest were verbally told. Buyer stated the follow-ups dont need to be in writing. So buyer was upset about all this and said it was illegal on f agencies part. So, who is right? Writing? Verbal?
0 votes Thank Flag Link Tue Sep 25, 2007
I called F agency and asked for sales manager. Told them situation. Told them Im willing to negotiate a commision rate (lower than 4%). We agreed on 2%. Buyer is not taking a commission. So, I guess thats better than paying out 4%. Right? So F Agency will represent us and hopefully close the deal. We already orally agreed on price and no inspection. So, everything will be clean. No chance of litigation (I Hope).
0 votes Thank Flag Link Tue Sep 25, 2007
Hi Todd:

Looks like you are getting a lot of advise.

The only thing I really want to stress is that your previous agreement, turns of events, the agents you are dealing with (both the previous listing agent, and this agent who is trying to buy it while working around the system) and what you are planning to do combined can be a very tricky situation to deal with.

Regardless of all the advise you are getting; especially since we only saw one paragraph of the listing agreement - knowing real estate contracts, there are a lot of times, exceptions, exclusion, refer to previous or future paragraphs, etc; you really should check with a real estate attorney to go through the entire listing agreement and sequence of events (hopefully you kept good notes on this), and do the right thing, not just morally but to protect yourself.

If it is not handled right, you might still owe the commission to the first agent, and possibly the second one or more, depends on how you handle the whole package. I will be very careful myself.

Good Luck,
Sylvia .
0 votes Thank Flag Link Mon Sep 24, 2007
Sylvia Barry,…, Real Estate Pro in Novato, CA
MVP'08
Contact
Hi Todd. I am glad you felt I was able to help at least a little. My hope for you is that the brokerage will agree not to pursue a commission at all as a result of the agent's unprofessional behavior. Refusing to speak to a client, not presenting a counter-offer, hanging up, etc. Since the total commission would be some $10,000, I don't consider this a Walmart kind of agency. The only thing that resembles Walmart is the service and I think that might be an insult to Walmart. Good luck to you and I would be great to hear back from you with the hopefully happy ending.
Web Reference: http://www.go2kw.com
0 votes Thank Flag Link Mon Sep 24, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
Contact
Hi Todd. Thank you for providing the holding clause information. It looks like there is no requirement that the former brokerage provide you with a list of those potential buyers to whom your property was shown during the listing period. You mentioned that the listing agreement stated a date in August as the expiration date, but the listing did not expire until September. As already mentioned in my previous post, why do you think the listing expired later than what the listing agreement says? When did the former broker show the house to the agent/buyer?

I have to say that the holding clause is strangely worded as it refers to "subject of a written agreement." Well, the property would obviously subject to the new listing agreement which would fall under the term "any written agreement." The holding clause would theoretically even apply if you were to just lease the property to one of the potential buyers even though the listing agreement probably did not contain a provision for compensation for finding a tenant. What gets me is the "subject to any agreement" appears to be listed as a separate event triggering the holding clause. Essentially, what I am saying is that under the holding clause, the way it is written, the listing agreement itself could be considered a triggering event as it is "any agreement by the buyer and the seller" as the listing agent happens to be buyer to whom former agent showed the property. You could certainly argue that the listing agreement would be with the buyer's brokerage, but the buyer is still a part of the brokerage and I am not sure if that argument would hold up. As you can see, this can get really tricky.

While I am appauled at the agent's unprofessional conduct ("what now"?), I think his conduct is even more reason to expect the worst of him. My question is, was your agent also the broker, or does he have a boss? This may just be a matter of talking to the wrong person at this office?

While I still don't care for the "fake" listing approach, I don't feel as strongly any more as I did before I heard more of the story. I think I would feel much more confident if you could get an express written release from the brokerage, because in the end it is the brokerage that would be entitled to the commission. I am also wondering if the broker of the new brokerage could talk to the broker of the old brokerage and see if a compromise could be worked out.

I think you should still go ahead and consult a real estate attorney. It's unfortunate that you'll have to spend money on legal fees, but I think you are better off that way. To me, the agent's conduct even before the expiration of the listing was questionable as he did not tell you about the buyer's counter-offer which in my humble opinion violated his duties to you and could very well qualify as grounds for dismissal.

Unfortunately, all the opinions on this thread are only opinions and you should not rely on them as legal advice. Best of luck to you.
Web Reference: http://www.go2kw.com
0 votes Thank Flag Link Mon Sep 24, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
Contact
Thanks so much for your quick replies! I really do think I am doing right and was taken advantage of. When your agent answers the phone, What Now? and even so with potential buyers - that is so bad! This person has 115 listings to himself right now! All about quantity...not service.
Here is the holding clause contract...word for word...
In the event the property, or any part of, described in this agreement is the subject of a written or other agreement by the buyer and seller or their designees or is sold conveyed, leased, or in any way transferred within 120 days after the expiration of this agreement to anyone whom the seller,broker, or hr brokers salesperson or a buyers brokers agent or transaction gent had introduced the property during the terms of this exclusive listing, the compensation as indicated above shall be earned by the broker agent by the seller, unless the seller executes a new exclusive right to sell listing agreement to take effect upon or anytime after the expiration of this agreement.

So, good idea to contact the F Agency to negotiate a lower fee? Should the buyer be relist with own agency? Or should we just sell as FSBO and not worry about any fee?
0 votes Thank Flag Link Mon Sep 24, 2007
Good question and I may have an answer you will like. Even if the agent has a protection clause that was properly executed in the original listing agreement, agents RARELY if ever actually do what is necessary to make the clause effective. READ that position of your listing agreement. In most states...including the state of California, it states that the agent, in order for the clause to be enforceable, must provide a list of potential clients that the agent and broker are "identifying" as potential buyers. ONLY THOSE listed are covered under the protection clause. An agent can not simply provide a list out of the phone book or, make a statement that says "ANY BUYER" each potential buyer must be identified!
More good news....that list must be provided within a certain time frame. In CA it is 3 days after expiration.
Did your agent / broker provide this to you?
If not, they are S.O.L.
I hope this helps!
In any case, you should seek legal advice from an appropriate source. Your legal counsel can provide the details you need to make an informed decision. I am not an attorney.
0 votes Thank Flag Link Mon Sep 24, 2007
I understand the morals of this. But, Morals, unethical aside, I need to go by what contract states. It clearly states once relisted elswhere, former contract including holding clause is void. Now, our onld agency was the worse of the worse. Not mentioning names but starts with F. Agent did not even tell us the counter offer that was made by this buyer! Can you believe that! Also, contract lists wrong experiation date of August which should be Sept. which the actual listing expired in Sept. We are talking 4% commission, 10K. So, you say to just reach out to F agency and hand them 10K? Or can we re-negotiate commission rate to say a referrel fee? (1%)? And if anyone can recommend a lawyer who knows this in hudson county, nj, let me know.. Also we called F agent today to negotiate in good will and he said contract expired. Nothing to talk about. and hung up.
0 votes Thank Flag Link Mon Sep 24, 2007
To clarify:
120 Holding clause states - anyone who was shown listing while under contract, then decides to purchase house after listing expired with 120days - full commission is due.. BUT, 120-day hold is nullified if relisted with a different agency.

So, we have a person who did see house while under contract. However, that same person is their own agent with another firm and can relist at 0% commission. Which rule takes over? Already spoke with lawyers and nobody knows.
0 votes Thank Flag Link Mon Sep 24, 2007
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer