If we notify our Realtor we are going to go with another Realtor, do we have to pay him a commission if we buy the only house he showed us?

Asked by Wulfwen, Brownsburg, IN Tue May 29, 2012

My husband and I talked with a Realtor about buying a house, but we never signed any paperwork. So far he has shown us one house, which I searched for and sent him all the information. He never replies to our emails or phone calls. If we notify him that we are switching Realtors, will we have to pay him a commission if we happen to purchase that house?

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9
Joe Shoemaker, Agent, Indianapolis, IN
Sun Jun 17, 2012
Wulfwen:

Great question! "Procuring cause" questions involve a lot more than just who was the agent who showed the house. There must be an initiating event which leads - in an uninterrupted fashion - to a successful closing.

One way an interruption happens is when an agent "abandons" his/her client. That is, if the agent fails to stay in consistent communication with the Buyer, it may be determined by an arbitration panel that the Agent abandoned the Buyer.

Another question asked in Arbitration is how the property was initially discovered. If it is true that you found the property on your own, then it may be such that the first agent you engaged might not be able to claim that they are/were the "procuring cause."

There are a multitude of facets to these discussions, and lots of relevant questions to be answered to provide a satisfactory answer. The result is often impossible to predict.

Here's a link to the Indiana Association of REALTORS® Arbitration Guidelines related to Procuring Cause in case you're interested: http://www.indianarealtors.com/Education/ArbitrationGuidelin…

Good luck in your efforts!

Joe Shoemaker
Principal Broker, REALTOR®
MacDuff Realty Group, LLC
317 413.8501
joe@joeshoe.com
http://www.facebook.com/joeshoe
http://twitter.com/#!/jojosmojo
Web Reference:  http://www.macduffrealty.com
2 votes
Mallorie Wil…, Agent, Indianapolis, IN
Wed May 30, 2012
This is a tough question to answer. This is what we call the "procurring cause". Technically, the REALTOR that showed the property to you is considered the procurring cause. I would answer your question with yes if you had signed a buyers agency agreement. It sounds as though this isn't the case. Your REALTOR has an obligation to properly represent you. It appears your agent must be excessively busy. Have you addressed the communication issue with your agent? I'd express your dissatifisfaction with the service you've received and do what is best for you. The seller is responsible for the commission. With no buyers agency agreement, it would be very difficult for your agent to require any commission from you. I wish you the best of luck and hope that everything works out for you.

Mallorie Wilson
Associate Broker
Century 21 Diversified
malloriewilson.com
317-590-3434 direct
317-585-7748 office
317-845-7726 fax
1 vote
Fran Lazerov, Agent, Indianapolis, IN
Tue May 29, 2012
In Indiana, the seller pays the commission. It is then divided between the listing company and buying company, and further divided between the respective companies and the agents. If the original agent showed you the house, and it led you to buy it as a result of the showing, there may be some sort of arbitration hearing between him/her and the new agent. While you would probably not be directly involved in the arbitration, it is possible the original agent could claim procuring cause. However, since the original agent seems to be not following up, you may feel neglected and want to use someone else. I doubt you would have any financial liability since it appears no buyer's agent agreement was signed and the buyers typically do not pay the commission anyway. You might want to contact the original agent and ask why your calls have not been returned. It could be some sort of family emergency. Good luck.
1 vote
Catherine Cr…, , Indianapolis, IN
Tue May 29, 2012
Did the you sign anything? No, then fortunately you do not owe the agent anything. Good for you, you found out early in the process that this agent was not the type of agent you want to work with. It is always best to interview a couple of agents before committing to one. Decide what it is you want from an agent, then call around and interview some to see if they are the type of agent you will be comfortable with. You are entrusting them to help you make one of the largest investments you'll ever make. Call me for an interview. Afternoons are a great time to reach me. Best of luck.
0 votes
Scott Orich, Agent, San Jose, CA
Tue May 29, 2012
Wulfwen

As long as you did not sign an agreement with your first realtor, Peters' answer is spot on.

Scott Orich
317-513-6488
scott@scottorich.com
0 votes
Jackie Lovell, Agent, Indianapolis, IN
Tue May 29, 2012
Yon won't owe any commission especially if you did not signe an exclusive buyer agent agreement in which case you do commit to owe that person if you buy through someone else. Normally the commission is paid by the seller to the listing agent who in turn pays your buyer's agent for representing you. So, NO you don't have to pay any Realtor. But that being said, you will need to let your next Realtor know you saw it with this other Realtor if that particular home is the one you buy, so they will know what they may have to deal with later. The first Realtor you saw the home with could claim he was the procurring cause of you purchasing the home and try to get the commission from the deal anyway. (only if he finds out you were the one who bought the home and he can show proof of following through with the process to assist you in purchasing it.. but since it sounds like he is dropping the ball already, even, your new Realtor shouldn't have any problems.)
I know weird isn't it? You are represented by a "BUYER'S AGENT" and they are paid by the Listing Brokerage of the home you buy. So, they are free for you.

Best of Luck!
Jackie Lovell

Artisan Realtors.
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Tue May 29, 2012
There is this thing called Procuring Cause that is recognized by some states and others. Here in NC it is not recognized so here the answer would be no. I am not sure what Indiana's rules are with Realtors. I am not a fan of the Procuring Cause because it is so ambiguous and it just seems silly. I would tell the agent you have decided to use the services of another and move on and not worry about it. In any case the agents would fight it out and not get you involved anyway.
0 votes
Peter Knight, Agent, Fishers, IN
Tue May 29, 2012
You owe him nothing. If however you do buy the only house he showed you, there could be a "procuring cause" issue. But that problem will be handled by your new Realtor, maybe by paying a referral fee or splitting the commission.
0 votes
Stephanie Ki…, Agent, Indianapolis, IN
Tue May 29, 2012
No you do not owe them anything, especially if you did not sign anything!
0 votes
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