Once an agent shows you a home are you stuck?

Asked by Julie, Pewaukee, WI Wed Dec 3, 2008

agent OR are you able to change who you want to work with and make an offer? She is making us sign an buyers agreement with guarantied commission not if the seller back out but a minimum she would get even if her 2.4% is paid by the seller ( she is demanding if 5000) on a 200,000 we would be paying more then her 2.4% Is this normal???? She is saying if we don’t sign the agreement she will pass along any info she knows about are pre- approval to the seller the seller is a different company is this true. It feels like we are being blackmailed because we like a house.

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Alan May, Agent, Evanston, IL
Wed Dec 3, 2008
Procuring Cause is more than simply "the agent who first showed you the home"... it is an unbroken chain of events leading to the purchase of the property".

Firing the agent would certainly break the chain of events... and would "probably" entitle the showing agent to "nothing". (I say probably because they might take you before a mediation board, who might award them a small "showing fee" portion of the commission... but either way, it would not have to come from YOU (Julie) the buyer.

This is one of those cases where the buyer (client) gets what they want. You cannot and should not be forced to work with an agent simply because they showed you the house. Especially if you no longer have confidence in that agent. Explain that to the agent's managing broker, and ask her to assign a new agent to you to write the offer. The managing broker will then work out the logistics of who gets paid, and how much, behind the scenes, and it should have nothing to do with you or your purchase.

Good luck.
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Kristin Noll, , Milwaukee, WI
Wed Dec 3, 2008
Hi Julie,

You do NOT have to sign the buyer agency agreement under those terms! She is NOT "your" agent until you sign the Buyer Agency Agreement.

You have choices:

1. Tell her you'll sign the agreement ONLY if she limits the success fee to be no more than 2.4% of the purchase price or what is being offered by the listing broker AND for that specific property ONLY. (This keeps you from being obligated to her should this offer fall through and you want to work with a different agent.)

2. If she refuses #1, tell her you do not want to be her client, but want her to assist you in filling out the Offer to Purchase as her CUSTOMER. In this case, she will be working as a sub-agent for the seller & does not represent you. However, she does still have legal obligations, even if you aren't her client. Tell her you consider your pre-approval info to be confidential - she is required by Wisconsin LAW to keep your confidential information private. She is also required to give you a "Broker Disclosure to Customers" form, explaining her duties as an agent. There is a place on there you can SPECIFY what you want confidential - like your pre-approval.

3. Get another agent to write the offer for you. In this case, that agent probably won't have earned the 2.4% commission split from the listing agent (because of something called "procuring cause") so you'd have to pay them out-of-pocket. But at least you'd know your best interests are being protected.

After all is said and done - I'd complain to her broker, because she lied to you about having to tell the sellers about your pre-approval. The only time she would legally have to do this is if you aren't approved for the amount of the offer ie can't afford the house.
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Jerry Becker, , Littleton, CO
Wed Dec 3, 2008
I'm not sure I totally understand everything as you have some gramatical gaps in your question. If you didn't sign, then I wouldn't, especially if you don't want to work with this agent. Why did she show you the home? Is she the listing agent? You are asking a lot of questions about commissions, and we as agents aren't supposed to get involved with other agent's commission structures, but let me say that an agent can get paid anthing they and their cleint agree to. Commissions are negotiable and while 2.4% may be the average, she is only asking for .1% more. I would advise you to talk to an attorney or at least meet with this agent's broker (her boss), so he or she can explain what's going on and clear up any missunderstandings. You should understand that the broker, while not wanting to break any laws or have a complaint filed against him, will most likely be taking the side of the agent. Who knows, the agent may have been up & up, but it's hard for me to tell from your writilng. I was a Wisconsin Broker, but that's been 34 years ago, and I'm sure your state has had some changes in their real estate law.
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None, Agent, Summit, WI
Wed Dec 3, 2008
Hi Julie,

You are never "stuck" with an agent, you can move ahead with the transaction with someone else you may prefer more than your current agent. But - the agent that showed you the propert is owed a commission for doing so. This is called "procuring cause". Generally this can be settled between the agents without need for you to get involved. She can't MAKE you work with her, but she is entitled to get paid for bringing you to the house you wind up buying.

With regards to her presentation of buyer agency, it seems to be rather strong-armed. If you do not sign the agreement, she is working for the seller, meaning that she is obligated to disclose facts material to the negotiation that are a benefit to the seller. If she is working for you, then she neogtiates on your behalf.

You can negotiate the terms of the buyers agreement with her so that she gets paid what is offered in the MLS system. If she does not want to agree to your terms I believe you can cut her loose and she may even lose her claim to the procuring cause, but again, that should be an issue between the agents with you out of the loop. Agents should never let their customers and clients get sucked in to commission disputes.

As a matter of practice I never set up my buyer's agreements so that the buyers have to pay me for my services. I find it a bad practice to do so.

I wish you the best of luck.

Jeff Gramins
First Weber
Web Reference:  http://www.JeffGramins.com
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Karen Wenzel,…, Agent, Brookfield, WI
Wed Dec 3, 2008
I'm thinking that your agent is not explaining the buyer agency agreement clearly to you.
Should you sign the Buyer Agency agreement- in order to have her represent your interests in this particular home, or other homes that you wish to see during the term of the agreement, she would be paid 2.4% of the selling price at closing (by the listing agent's company- as the Seller most likely has agreed to pay both Sellers Agents and Buyers Agents)
If this is not the case- I would immediately ask to talk to your agent's office Manager, to have all your questions answered to your satisfaction. I would hope that the agent is looking out for your best interest. It is not productive to undermine a customer or client.

All the Best to You!!
Web Reference:  http://GoPackerUp.com
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Kathi Panor, Agent, Summerville, SC
Wed Dec 3, 2008
If you give me a call I can give you a name of an attorney so you can ask her opinion. Something doesn't sound right.

Kathi 262-443-8367
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Dallas Texas, Agent, Dallas, TN
Wed Dec 3, 2008
An agent assisted in locating a home on your behalf has registered you as a buyer with listing agent. All agents do deserve commissions are paid by seller at closing. The amount paid of 2.4% is little low vs. the national average of 3% paid to buyers agent. Signing a buyers agreement standard practice. Sorry if there is confusion it does not sound as though you are blackmailed. However she could come back and sue if your went around her and purchased the home. Unconfirmed I am only basing info. off your authored statements. Perhaps speak with buyers agent broker who might be able to clarify any misunderstandings
http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference:  http://www.lynn911.com
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