I've made a home buying error

Asked by Chris Epting, Chicago, IL Wed Aug 15, 2007

I'm from Illinois. My realtor was waiting for me to take the financial measures to getting my home loan pre-approval before she started taking me out to see houses. In my impatience, and not knowing the whole process, I allowed another agent to show me the house that I'm currently attempting to close on. I did sign a contract with the original agent, so what should I do regarding the agent that actually showed the home to me first?

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Melissa Manc…, Agent, Plainville, MA
Fri Aug 31, 2007
Hi Chris,

I have come across this before. In my case, I was the second agent in line. My buyer(s) explained what had happened and that another agent had showed it to them. They shared this with me after a purchase contract had been negotiated. Without hesitation, I offered to share a portion of my commission with that agent. I value the relationships I have with other agents in my community, and I believe what comes around, goes around. So I just asked myself, how I would want to be treated if I were the other agent? And came up with this solution. It worked out well for everyone involved.
2 votes
Deborah Madey, Agent, Brick, NJ
Fri Aug 17, 2007
I concur with the advice that says contact the agent and broker and explain the situation. Most agents and brokers are quite reasonable and have a great desire to be fair with their colleagues. Problems arise when things are not on the table and one party becomes suspcious of another's involvement or motives.

If I were the agent who wrote the contract, I would provide a small showing fee to the agent who showed you the property.
2 votes
J Lo, Home Buyer, California Glory, Brentwood, CA
Wed Aug 15, 2007
Hi Chris:
Your second agent may just be entitled to a showing fee. I always ask buyers if they are represented by another agent (CONTRACTUALLY or otherwise). If the answer is in the affirmative, I back off as a professional courtesy.

Your second agent should realize this.... did you advise the second agent of the first?
2 votes
Patti Pereyra, , Chicago, IL
Wed Aug 15, 2007
Hi Chris,

When you say "attempting to close", do you mean that you used another agent altogether, she showed you this house, and you are now going through the transaction process with this 2nd agent? Because if so, the agent who actually showed you the house and has undergone the entire process with you will be entitled to the commission. Even if she just showed you the house and nothing more, there is something in real estate known as "procuring cause", and the agent who showed you the house may still attempt to go after the commission based on this.

I think your answer will depend on what type of contract you signed with the first Buyer's Agent, and whether or not she was ever involved in showing you the house. Was it an exclusive contract? Read it carefully and see what it entails. There are non-exlusive contract that aren't as binding -- a more informal 'promise for a promise' agreement, in which case your first agent may be out of luck.

In any case, here is a helpful article covering the various Buyer's Broker Agreements:

Good luck with everything!
2 votes
Chris Tesch, Agent, College Station, TX
Wed Aug 15, 2007
Dear Chris,
Sorry to see you in this dilemma. You might contact the agent that showed you the home and let them know what the situation is. Perhaps you can negotiate a small showing fee. In all reality they probably don't want to pursue the case against you.

Thanks for posting this! I think more people need to know that this is a mistake.

Chris Tesch
RE/MAX Bryan-College Station
Web Reference:  http://www.ChrisTesch.com
2 votes
Jim Walker, Agent, Carmichael, CA
Thu Aug 16, 2007
Jeannetta and Bruce have ideas that might lead a resolution. Both agents provided value to you so both deserve some compensation, a Solomonic solution of dividing the baby , er , fee may actually be the most prudent course for the agents and for you.

I've got more to say but it veers off the topic so I will start a new thread.
1 vote
Cristina Vat…, , Chicago, IL
Wed Sep 5, 2007
A good realtor wil just let it go and let you have the house you want even if you purchased it through another real estate agent. True, it's not fair to the original realtor, but we all make mistakes and we understand when others do the same. It happened to me and I just let things go and wish him the best. A few months later, his sister contacted me to buy a house, so in the end, I did receive a referral from him.
0 votes
Barbara Eybel, , Oak Brook, IL
Fri Aug 31, 2007
Hi Chris, Did you have a buyers' agency with thw first agent? If so what were the terms of that contract? What led you to another agent? You should have contacted the first agent and mutually agreed not to consumate any realestate transactions with that agent, in other words mutually agree to cancel the buyers agency contract and inform her that you wish to purchase a home whether she showed it ot not through another agent for whatever the reason was. If she agreed to that cancellation of contract with you in writing she is not owed a commission. Most agents will not even show a property to a buyer who has seen it with another agent to avoid problems. If the contract was not disolved, and another agent shows a home to you, writes an offer that is accepted then she should give some mutually agreed compensation to the first agent. However, if the second agent does not know the first agent existed then the first agent ( if she wrote an offer) could be considered procurring cause and demand and possibly receive a commission.
The answer to your question is quite simple: be fair to all agents and if you have an agreement with one agent cancel it before proceeding to the second agent.
0 votes
Kobi Mccarthy, , 90814
Fri Aug 31, 2007
Hello Chris,

If this transaction took place in California, basically the agent who wrote the contract would be the agent to get the commission. The second agent should have never taken you out to view property without getting you approved for a loan. Secondly, the second agent has nothing in writing to prove that they actually were working with you, for example a Buyer Broker Agreement. Many agents make this mistake and continue to loose business with this practice. Sorry to say, but you are a fine example why agents should have these agreements in place before showing or working with buyers. If it's not written, it does not count in court.
0 votes
James Baker, , 92008
Fri Aug 17, 2007
Since you signed a contract (offer to purchase?) with the original Realtor, I think that legally that person is entitled to the Buyer's Broker commission. In my state, at the time of any agreement between you and the first Realtor you would also sign an agency statement that makes it very clear that the agent is the only person who can represent you in any Real Estate Purchase, lease etc. But, it seems odd to me that the first Realtor didn't question you about how you found the property you were writing the contract for and thus uncover the situation about a possible conflict. Or, maybe they did, but at that time they shoud also decided how to handle the situation... In addition the second Realtor is at fault ethically for not asking the question "Are you working with another Realtor?". This should be one of the first topics of discussion when you meet any Realtor in a business situation. Since both are culpable to some degree for this problem the solution I would offer would be for the Realtor with the contract to pay a referral to the second agent.
0 votes
Ruthless, , 60558
Thu Aug 16, 2007
I think Patti's advice is the best. It depends on what the (buyer's agent) contract says. You're first agent could have a case for "procuring cause" if you first learned about the house from automated emails from him/her. But it sounds like you never even really worked with the first agent. Is that agent now saying, "you have a contract with me, you own me money?"

How did this second agent come to be involved? An open house? You contacting a listing agent from a for sale sign? Or did YOU seek out another agent? Who wrote the contract for the home you are attempting to close on?
Web Reference:  http://www.oak-park-il.com
0 votes
Bruce Lynn, Agent, Coppell, TX
Wed Aug 15, 2007
Contact your current agent and broker and discuss the situation with both of them and ask for their advice. If there is a comission due to a second agent they might be willing to work with them, have you offer a small showing fee, or perhaps cancel this contract and get you a similar home without the conflict.
Web Reference:  http://www.teamlynn.com
0 votes
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