Home Selling in 56301>Question Details

Hed, Home Seller in Grand Rapids, MN

Relocation Part III

Asked by Hed, Grand Rapids, MN Fri Aug 22, 2008

I had asked 2 questions earlier on this topic. I'm the one with a realtor who won't sign the listing exclusion form, therefore disallowing me to participate in my employer's reloc program. I've decided I have just 2 options: 1) Ask to be assigned to another realtor who might then sign the form & 2) knowingly breach the contract. The first is based on the fact we know someone who works for the broker and who lives local to us. The second is based on the advice from an attorney who states that I would then be responsible for damages (any costs incurred so far). I think I want to proceed with my first option but don't know who I should contact first, the broker or the potential agent. All I know right now is that I cannot continue to work with my current agent. Advice is appreciated. As usual, thanks so much for the great advice.

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24
Elvis,

Here, Here!! I agree 100%
1 vote Thank Flag Link Fri Aug 22, 2008
Cameron, I agree, that my last ditch suggestion, is just that... a last ditch.

It truly is burning a bridge, and I don't recommend it lightly. But they're not exactly being reasonable with Hed, either. I agree that they have every legal right to enforce their contract, but agencies across the country allow their clients "out", under unusual circumstances, with the idea that it's just good business and good PR.

They're under no legal obligation, but they're really not thinking clearly, nor thinking about their reputation in the community in which they do business. My method might be a wake up call... or perhaps a wake. Use at your own risk, and thanks for pointing out the seriousness of partaking in the "Elv!s Goodbye" plan. :-)
1 vote Thank Flag Link Fri Aug 22, 2008
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Cameron-

Hed has every right to file an ethics complaint. It sounds like the Broker is more concerned about making some money on this deal then that fact that the seller is relocating and needs his interests looked after. Any broker that tries to claim a full commission is owed to him when the home has not sold is nuts. At best, reimbursement of expenses is all the broker deserves. To me, this is about the broker putting his financial needs in front of his clients needs to sell his home financially advantageous to himself. Filing an ethics complaint is NEVER a waste of time. There comes a point when a seller will need to defend his right to sell his home, the way he wants.

I personally think the Exclusive Right to Sell Listing Contract used in Minneosta is very weak, as it fails to include a default clause. If default clauses were included, then sellers and brokers would know what to expect should either party want to cancel the contract. I would love to learn from Hed where it says in his listing contract that the broker is owed full compensation. So far, Hed has said there has been no showings, and definitely no offers.

If Hed was to go into foreclosure, and the bank called the broker and said it was now their listing, would the broker still be demanding full compensation? Or if it became a short sale, and the bank told the broker they would only except the offer unless the broker reduces his commission, would the broker stick to his guns, claiming full compensation, or would he look at what would be best for his client and agree to the new terms? At some point, brokers have to look at the situation, and be willing to "bend the rules".
1 vote Thank Flag Link Fri Aug 22, 2008
Hed, your contract is always with the agency, not with the agent. So the agency has every right to reassign you with a different agent, regardless of how inconvenient or uncomfortable this might be for your current agent (or how much behind the scenes negotiating might be required). This is often done, because it's preferable to "losing the listing".

Particularly, now that this agent has had a death in the family, and may not be able to adequately service your listing for anywhere from a few days to a few weeks.

In addition to Jennifer's potential solution, you can simply notify them that your home will be surprisingly unavailable for showings during the balance of their listing, due to home emergencies, deaths in YOUR family, illnesses and unforeseen circumstances and therefore you'd like the home to be TEMP'd (unavailable for showings) until further notice AND that you will not be accepting or considering any offers that are made that are anything less than full price, with zero contingencies. AND you'd like their sign (their advertising) removed from your yard.

Perhaps once they realize that they'll be "spinning their own wheels" for the balance of the listing, and with no potential of compensation, along with all the bad will and bad public relations that come with it, they might reconsider their position, and be willing to negotiate your release.

Good Luck.
1 vote Thank Flag Link Fri Aug 22, 2008
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Hed,

I am impressed with your personal accountability in this situation. Your admission that this probably the result of your niavity, puts you way ahead of the rest of the consumers that we deal with on a daily basis. Friend, the reality is that the agent has a valid contract and they are entitled to hold you to the terms of their contract since you both agreed to and signed the terms.

Markets are slow and we all have properties that are priced right and still aren't getting and showings. I'm not apologizing for your agent, but there are many great agents that are doing everything they can to sell houses and still aren't having any luck. At the end of the day you can't create a buyer where there aren't any. You could put your house on the market for half the value but if there aren't people interested in Grand Rapids real estate you still won't sell. Just keep this in mind when analysing your agent's results.

Jennifer,

You and I both know that Hed would be wasting his time in filling an ethics complaint. An agent has every right to enforce a legal and binding contract. If it were a violation of the code of ethics for an agent to pursue their commission or enforce a contract because that would be "placing their interests above those of their client" we wouldn't have bilateral contracts they would be unilateral and non-exclusive since anything else would be a violation of the code. I'm not apologizing for what the agent has done or think their actions have been correct thus far, I just don't think that just because a client wants out of an exclusive contract gives them a right to file a violation under the code.
1 vote Thank Flag Link Fri Aug 22, 2008
Keith and Cameron -

Thanks for your responses. I really appreciate the communication.

I can't say my dissatisfaction was about my realtor's poor job until she refused to work with my relocation company. I guess I was remaining optimistic as I thought the house would soon be off my hands. I am awaiting the buyout price now and should get it next week.

I have a lot of things I want to ask my realtor to do but I can't as her mother passed away this morning. But when she is ready to work, I will do my best to put forth a list to her.

I unfortuntely have a 1 year contract that expires next May. :( When I put the house on the market, I was in a different mindset: 1) We had found a house close by we really liked which got us thinking about moving, 2) we were told by our realtor that we could easily sell our house for it's initial listing price, and 3) we were in no big hurry to sell. We began the listing process in April and after that, I accepted a great job 3 hours away and found this awesome relocation package. And now I can't do anything about it.

To make matters worse, the realtor is being rude and unprofessional to both people she has talked to from my reloc. company. Her broker has remained completely professional but continues to support her 100%, as a good broker probably should. My realtor flat-out refuses to work with them.

Keith - You make a great point about the "like to sell" vs. "have to sell" mentality. I am so upset with my realtor, I don't know if I can have this discussion with her, and with the passing of her mother, I don't know when I can. I just don't feel like I can trust her based on her past performance and the way she has treated us so far.

I trusted her to tell me what I needed to do to sell my house and I've done nearly everything she's asked, even invested over $3000 to make it more marketable, and I've lowered the price to her requested amount after she asked if we were willing to. Still, not one showing and no extra communication from our realtor.
In the end I am the likely victim of my own mistakes: choosing a non-local realtor, accepting a 1-year contract, signing a contract without a market analysis, and not doing my research on realtors. These mistakes will never be made again. It still doesn't help me now though.
1 vote Thank Flag Link Fri Aug 22, 2008
Hed,

I just can't understand how the broker thinks they can be compensated for the full commission when the house hasn't sold. Is there something in your listing agreement that says they can charge the full commission for breach of contract? I have never, in the three states I am licensed, seen a broker demand full commission for getting out of a contract. Makes me really wonder if this broker knows what they are doing.

As for your first option, I think that is the best. Your agreement is with the broker, not the agent, so tell the broker you would like to choose an agent (like the one you mention) to represent you. If the broker refuses to allow that, then they are off their rocker. Tell them you will file an ethics complaint for putting their interests ahead of your own interests if they don't switch agents. And there is always the "how about I tell everyone I know in Grand Rapids about your conduct and how I have been treated" line.

I really feel your pain and really hate these types of brokers...like I have said before, they are the ones that give the real estate profession a bad name.
1 vote Thank Flag Link Fri Aug 22, 2008
Hed
I went back and read your posts.
I see a couple of points that have not been addressed that might give you some options:
1. You hired the current Realtor to do a job - sell your home. The home has not sold.
a) ask the Realtor for a list of homes that have, since your home hit the market:
- come onto the market
-lowered their price
-gone into escrow
-sold
-expired.

Ask your Realtor why your home has not sold.

I would think (not knowing all the facts) that if your current Realtor has not sold your home, and other homes are selling, the you could make the argument that you hired them to do a job.

This is not legal advice, and I also do not want to interfere with the relationship you have with your Realtor. I helped a client in Oklahoma in a similar situation and the bottom line was the Realtor did not understand that the owner NEEDED TO MOVE, and the property was way over-priced.

To put it another way, it you hire someone to do a job, and then the circumstances change, and they no longer are able to do the job, I think you could make a case that you need to find a person that can do the job.

So far as the commission aspect, I will only share my point of view. For me, when I take a listing, my job is to help the seller figure out if what they want to do will work. That means that in some cases if the sale price may reach a point where the owner cannot or will not sell, then I may not choose to take the listing.

OTOH, if we agree that they HAVE to move, and we agree that the price needs to be low enough to get offers, and we don't engage in a dialogue like "so, you need to sell, we need to price your home at $X to get it sold, are we agreed?" and at that point the owner says "I've changed my mind, I cannot sell for less than $X plus, I have two choices. Try to sell an overpriced listing, frustrating both me and the owner, or call it quits.

Have you had a dialogue like this? If you really need to sell, and homes are selling, then the truth is that your home will sell. My client in Oklahoma finally had a dialogue with his first Realtor. He said "I have to move. I am going to give you two weeks to get my house sold, or I'll find someone who can". It did not sell, he did find someone, and it sold in two weeks. Yes, my client did not make as much in the sale, BUT HE HAD TO MOVE.

Hope this might be helpful.
1 vote Thank Flag Link Fri Aug 22, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Hed,

Having reread your previous posts it strikes me that this is more about getting out of your contract with your agent because you are dissatisfied with their service and less about the relocation offering. Relocation seems to be a symptom but not the entire problem.

The contracts that I work with stipulate that the contract can be canceled by mutual written consent. That leaves you with three options.

1. Wait out the contract until it expires.
2. Pay the full commission.
3. Violate a legally binding contract - in the end this may cost you more than any of the other options. Certainly with the stand of the broker so far it is going to cause you some legal hassles.

Have you tried putting the agent in contact with the relocation company and seeing if they can work something out? When does your listing contract expire with your current agent? Has the relocation company offered you a buyout at this time?
1 vote Thank Flag Link Fri Aug 22, 2008
Hed,

Do the right thing and offer to compensate your current agent for their time and efforts and then pursue another agent. Put a check in front of them, I assure you that they will think a little harder about letting out of the contract.
1 vote Thank Flag Link Fri Aug 22, 2008
It's a different market for sure. Strategies, as good as they are, will usually (barring condition, location issues) will get down to pricing and no matter how much advertising done, there's still apx. 67% of the homes that do not sell because of supply and demand.

It's not like you purposely did something 'against' the agent. I agree with some of the other responses about possibly offering something for the time, costs and efforts. There is one thing that many sellers don't know. We spend a tremendous amount of 'behind-the-scenes' time (hours and hours) in everything involved with listing and marketing a home. Sometimes you only see what you think as 'nothing much', but was a lot of work. Contracts, market analysis', research, pictures, marketing brochures, ads, signs, office documentation, internet marketing, updates, verifications and more don't just magically appear from nowhere.
0 votes Thank Flag Link Fri Sep 26, 2008
Once again, thanks to everyone for their feedback. I want to ask this... Is my contract with the agent or the broker? The contract only states the agent. Do I have the right to seek out discussions with the broker?
~~~~~~~~
Your listing is always owned by the brokerage firm... not the agent, so you are appropriate in contacting the broker, when there are issues.

If this brokerage is a franchise, or a chain, you might consider contacting someone further up the ladder (maybe a regional manager?)... their behaviour is unprofessional and unacceptable. Perhaps your relocation company would be willing to initiate the contact? After all, they must have counsel, and this directly impacts their business, too!

I would continue to call the broker, and insist that you deserve a call back. You've offered reasonable solutions, it's time for them to respond with something other than "no".
0 votes Thank Flag Link Thu Aug 28, 2008
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
YES! The broker owns that listing, not the agent. Honestly, I would call the Minnesota Association of Realtors, explain your situation, and see if there is anything you can do to get the broker to respond. How unprofessional the broker is being. As for the agent asking you to refer any questions to her attorney, she has no legal grounds as the broker holds the listing, not her. She would have to sue her broker to resolve any issues, not you. I think she is just trying to intimidate you. Don't let her...stand your ground and demand a meeting with the broker or else you will be filing a complaint with the Minnesota Department of Commerce as well as Minnesota Association of Realtors and the local board they belong to. The brokers inaction will not stand too well in court as it is his/her responsibility to resolve the issue.
0 votes Thank Flag Link Thu Aug 28, 2008
And so the saga continues...

The broker never called us back about a realtor reassignment. He had said he would get back to us Monday at the latest. As of Wednesday evening, and after two voice mails and a message with the receptionist of the realty, the broker has not yet returned our call. In addition, my agent sent me an email stating that I could refer any future questions regarding the agent reassignment to her attorney as canceling or getting a different agent will NOT be accepted. Yes, she capitalized "not". In addition, she left a voice mail that said she is the primary contact and the broker is not. Call her and not him.

So now what?

The relocation specialist has also left messages with the broker with none being returned.

This can go two ways it seems. I can let it continue with no winners... hang on to the house until the contract expires in the spring... Or I can try and be the bigger person and work towards coming to some agreement. I just can't help but think that this is a lost cause as my first and second try and the relocation specialist's first and second try were completely futile. I haven't given up hope on the broker yet but I likely will be the end of the week. I think my next step is to see if my company will extend the amount of time they will pay for an occupied house.

To the agent that talked about relocation costs for agents... This relocation company, Aires, does not have any partnerships with real estate companies nor do they tap into agent commissions. I asked the relocation specialist directly and even pointed him to our discussions. He did affirm that there's more paperwork and expectations but no further costs are owned by the agent. My relocation specialist also stated that in his 100+ relocations as well as his counterpart's relocations, he's never ran across an agent he couldn't come to some agreement with. I can't believe I'm going to be the first. Figures...

Also, to clarify. My house is listed in Little Falls and the agent is our of the St. Cloud area. I currently reside in Grand Rapids until my house sells.

Once again, thanks to everyone for their feedback. I want to ask this... Is my contract with the agent or the broker? The contract only states the agent. Do I have the right to seek out discussions with the broker?

Thanks!
0 votes Thank Flag Link Wed Aug 27, 2008
That's great Hed! Good luck with the new agent...I am so glad that it looks like a peaceful solution will happen!
0 votes Thank Flag Link Mon Aug 25, 2008
I'm a relocation certified agent. Your problem is easy. Get another agent. I'm shocked that the relocation company would send someone who wouldn't sign that. Most common for me, is a long standing relationship with my relocation company, so both sides know what to expect on every single transaction. We don't have to learn or train each other each time. We know what is expected of us as relocation agents, and one very common and basic obligation is to incorporate the relocation addendum into our standard listing contract. Jeff Diamond/Prudential
0 votes Thank Flag Link Mon Aug 25, 2008
So a call to the broker with a request for a new agent went well it seems. As before, the broker was completely professional and stated he would assign us a new agent. We're waiting for him to get back to us as we speak. I do hope this gives us the results we are hoping for.
0 votes Thank Flag Link Mon Aug 25, 2008
Jennifer,

Let's carry your argument all the way through. You maintain that seeking to enforce a contract is placing our needs above that of our clients and is therefore in violation of the realtors code of ethics. If this is true, it would follow that enforcing any contract would be in violation of the code. It would then follow that earning a commission is in violation of the code, because it is our contract that entitles us to earn a commission. I don't disagree that our clients' financial needs would be better served if we didn't earn a commission. But alas, we are in business to earn a living and the way we do that is by meeting clients, and forming agreements (usually in writing - absolutely in writing if you wish to enforce it) to get paid.

I agree with your sentiment, but your argument fails in its logic. An agent is entitled to earn a fair commission in a transaction. What is fair is determined in writing prior to listing the home. Since fair was previously established in writing a change in the sellers circumstances does not change the definition of what was previously determined to be fair. While it may be inconvenient for Hed to have to pay, even he acknowledges that this is the bed that he made and now he must sleep in it.

What you are failing to consider is that there is a negotiation taking place between Hed and the broker. He wanted out of the contract, they counter by saying no. He offered some money for their time and efforts and the broker counter with a different price. They aren't seeking enforcement of the contract or saying that Hed should pay the commission without the sale taking place. What they are offering him is a cancelation to the contract. At this point the offer on the table is that Hed pay the full commission in order to obtain a cancelation to the contract. Simple negotiations between two people.

I agree with you that it would be a good practice to outline the terms by which a contract may be canceled. This is something that you might brind up to the forms committee for their next round of revisions. In the mean time the contract does deal with canceling the contract - "by mutual written consent."

As for the amendment. As with any contractual arrangement it must be agreed upon by both parties for it to become binding upon the original agreement. Without mutual agreement, it it simply a request that has yet to be granted.
0 votes Thank Flag Link Fri Aug 22, 2008
Hed,

You can always amend your listing contract, that's why it's called an "amendment" form. As long as both parties agree, any contract can be altered as long as the agreement is in writting and both parties have signed.

As for your agent, she works for the broker, but your deal is with the broker. Don't worry about what that agent might get compensated should you change agents, that is between her and the broker. All the you should be concerned with is getting a new agent! It is completely in your right to ask for a new agent. If the broker won't agree to the relocation request, than approach him with your dislike of the current agent and her abilibty to get the job done....state that you would like a new agent assigned to your listing, or else you will take further action. In the long run, if the broker refuses to do anything, than get an attorney to send them a nice letter.
0 votes Thank Flag Link Fri Aug 22, 2008
Hed,

There is nothing stoping you from doing all of what Elvis says except that each of you might be biting your nose to spite your face. You could refuse all showings and disallow any marketing - a strategy that might work - but if it doesn't, you have created a good deal of animosity between your agent and yourself much as their actions have upset you. Now with both of you hating eachother May will seem even further away. If they did (and I can't undersand why they would) decide to allow you to stop the marketing but not allow you out of the contract. You would then not be able to sell or show you house until May. Meanwhile you will still have to make the payments. Be careful with this method. Although the idea did give me a good chuckle.
0 votes Thank Flag Link Fri Aug 22, 2008
Hed,

1. My understanding of contract law is that you don't get to modify the deal after the deal is done. The listing exclusion clause would be a modification of the deal after the fact. Better to take the nice approach here than to try to force this issue by asserting your "rights." The reality is that while the contract is between the broker and the seller it is through the agent. The broker may have the right to force a change in agents, but they may then be on the hook to pay the agent their commission through the terms of the independent contractor agreement between the agent and the broker.

2. Your options are endless. If I might suggest though, that someone from the relocation company contact the broker. The exclusion clause we are talking about means that the relocation company can buy the house from you directly and not have to pay the agent a commission. It doesn't mean they won't get paid, it simply means that they won't get paid on that sale.

If I were your agent, I wouldn't sign such an agreement unless I had protection saying that I would be the listing agent once the relocation company owns the house. Keep in mind as well that relocation companies are very difficult to work with and dictate a good deal of your commssion to you. Where I normally earn "X%" as a listing agent, our relocation company caps us at X-1% (less than I normally charge) and if they require you to pay them a 37.5% referral fee. If the property goes into inventory (the relocation company buys it from the seller) the splits are markedly worse.

Heres the scenario - Lets pretend that I normally charge 7% to list a house, and your house is on the market for $200,000. Total commission in a normal sale would be $14K or which I would pay $6K to the buyer's agent. Lets pretend my commission split is 75% (they range from 50% -100% - it really depends on the company and where you are in the brackets) and the company charges a 6% franchise fee. The $8K that I earned for selling the house would then be split with the broker, leaving $6K (25% to them, 75% to me) and they would then take a 6% fee off of that. In the end of a normal transaction you would make approx $5,640.

If it were a relocation transaction I would be capped at 6% and would have to pay the relocation company a referral fee for the client that they did nothing to provide to me. The numers would break down like this. $12K total commission paid - $6K to each of the buyers agent and me. The 37.5% referral fee would be $2,250 and the split with the broker would take $937.50, then the 6% franchise fee would be assessed at $168.75. Meaning that at the end of a relocation transaction I would make $2,650, a pay cut of close to 50% and I would be required to do additional work by having to fill out bi-weekly reports for the relocation company. If the property goes into inventory the pay cut is in the 75-80% range.

Generally speaking I wouldn't be real excited about getting my paycheck cut in half or even more if I had a valid existing contract. Does this help you understand the scenario a little bit better?
0 votes Thank Flag Link Fri Aug 22, 2008
So let me put this one out there, Cameron and Jennifer. Let's just go back to square one and assume I don't want out of my contract and just want her to sign the listing exclusion clause. Now what options do I have? And let's also ask about what I can do if she won't sign? And, assuming my contract is really between seller and broker, do I have a right to be assigned a different agent?
0 votes Thank Flag Link Fri Aug 22, 2008
Jennifer -

Thanks for your opinion. I like yours the best, but only because that is what I am hoping can happen. I think I might contact the broker today. I'll keep you posted.

Thanks.
0 votes Thank Flag Link Fri Aug 22, 2008
Cameron,

I tried this and they won't accept anything less than full commission. I want to do the right thing, trust me, but less than "full commission" isn't an option. Any other ideas? The relocation company is more than happy to pay the full commission once the house sells to a buyer but not without a sale.
0 votes Thank Flag Link Fri Aug 22, 2008
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