This weekend I've had a situation that I've found very disturbing.

I have an agent who has a large farm ($4 million) listed.

This week, an offer came in and the seller accepted it.

On Friday, another agent wrote an offer and "because he had a previous relationship with the seller", went directly to the seller and negotiated the offer. My agent, the listing agent, found out about the offer midday in a conversation with the seller. To add insult to injury, the agent with the offer sent my agent a fax of the offer saying: "I'll handle this one. All you need to do is collect your check."

Now, because the second offer closes quicker, the sellers want to proceed with it. And, they are furious at my agent for telling them that they may be sued by the first buyer. The agent with second offer told the sellers to just have their attorney look over the first contract and find a loophole to get out of the contract.

I've asked for a meeting with the sellers on Monday.

A few other points:
* The agent who brought the second offer is not a member of our mls. Thus, he is not covered by our mls' obligation to be compensated.
* My state brokerage statute has a provision that allows our real estate commission to discipline agents who interfere with a valid seller or buyer representation agreement.
* I am concerned about the sellers. I suspect they are going to ask us to proceed with the second offer despite the accepted first offer.

Any ideas how to proceed?

I would just sit down with them and explain your position and explain the law to them. They're breaking the law by accepting the second offer unless the first had any contingencies. Also, even if that agent isn't a member of your MLS they're a member somewhere! Report them!

I think if the first contract has a way out, you have an obligation to your Seller to make it happen. If the agent had brought the offer through you and the Seller had wanted it to accept it, you would have had to look for a "loophole". If there wasn't one, then you would have to advise your Seller stick with the first offer, or face a lawsuit.

I would wait until it closed and then take the other agent to arbitration. Don't jeprodize the Seller's ability to sell with the "situation".

Note: The agent behind the second offer is not a member of NAR or any local association.

The agent and broker representing the buyer of the first offer have a duty to protect their client/buyer's interest. Obviously the key will be whether or not the seller can get out of that contract. If the buyer of contract 1 is ready willing and able to perform then it would be easy to prevent the sale to buyer 2.

I agree that you sit down with the sellers and explain that your agent's admonition that they consider the risks in breaching contract 1 was a HELPFUL suggestion looking to protect their best interests. Explain that if buyer 1 ties up the property in a lawsuit, it won't close until much later than that contract now calls for and sellers may have to pay their attorney fees and buyer's attorney's fees as well.

If things go sour and agent 2's interference causes your firm to lose the listing (seller is talked into canceling the listing with you presumably by agent 2) then I would sue agent 2 and sellers for the loss of your commission.

I don't think that loss of the listing is a risk.

My biggest concerns are:

* The fact that the our sellers are getting advice from an agent representing one set of buyers.

* That the sellers may refuse to sell to buyer #1 triggering a lawsuit. As indicated above, one avenue is a contract loophole. But, if buyer #1 performs, ie. verification of earnest money deposit, timely ordering of appraisal, etc., I don't think that it is invalid.

* My strong inclination is to punish the agent behind buyer #2 harshly for interference with our seller representation agreement. My two thoughts now are 1) File a complaint with our real estate commission asking for termination of his license. 2) If buyer #2 closes, deny him a commission since he is not covered by our mls offer of compensation. 3) I'd love to get him before an ethics committee but he is not a REALTOR.

* The sellers seem to think we are working against their interests. I will try to eliminate that issue on Monday. But, I suspect that will be an uphill battle.

Another tidbit. The agent behind buyer #2 is a longtime agent. He wrote his contract on a form that is at least 10 years out-of-date and fails to comply with our current state law on several points.

He also told my agent yesterday that he knows what he is doing because he has been in the business for 30+ years.

Another factor is that he had an encounter with my agent a few months back where he expressed extreme displeasure with her listing this farm in HIS community. My agent is from the area but lives about 60 miles away. I suspect that hostility is why he did what he did.

How do you know they are an agent or broker??????

In my state you DO NOT have to belong to an mls or NAR or a local chapter assocation to conduct real estate business.You simply have to hold a liscense with the state real estate commission and if you are conducting commercial transactions as long as you set them up properly you don't have to have a liscense.

Our commission has a website where you can enter the persons name and there history comes up whether they active-inactive etc. and it shows ther eliscense number and any voilations in the past or sanctions by the re commission.

There are some former agents who deal in commidities training which do not reuire a liscense to perform.

There is nothing illegal about telling the sellers see if there is some way you can find a legal loophole out of the contract.Often times contracts are sloppy and there are plenty of outs.

If your agent had a first offer that was accepted that didn't have the greatest terms your agent should have counseled the buyer if there was a bunch of stipulations in there(long timelines,purchase subject to zoning,subject to assemblage,etc.)

I would see who you are dealing with first agent,broker,commodity person,developer etc. and then run this scenario by your closing attorney and see what they think.

You might ask the sellers to have their attorney send you a letter indicating how sellers plan to proceed. Tell them you need it for your file. Maybe that will at least get them to have an attorney review the situation and get some legal advice.

As far as agent 2 goes, you didn't say if he is a broker or not. Obviously if he's not, you'd want to complain to his broker. Also, there's nothing wrong with telling of your experience with agent 2 to your agents and other professionals in the real estate community as long as what you say is truthful. Whether a state agency can review his actions or not depends on your state licensing laws and regultations. You'll have to review those.

Steve, contact a RE attorney for guidance and review of the 2nd contract. You need to protect your seller, if the 2nd contract is outdated and ambiguous.
I would approach your seller with the fact that you want whats best for them, including keeping them and you out of a legal situation to where they will not be able to sell the house as quickly as they think.

Your first priority is to sell the home for top dollar.

Get it sold.

With a $4Mil property involved, you're not talking about peanuts as far as commission goes...call a lawyer and see what your options are/what needs to happen. Whatever you do, make sure to put your clients needs ahead of your own (and ahead of the annoyance of having to deal with a schlep agent). Having tens of thousands (or potentially more in this case) of commission dollars involved, you're in a tough position (it would really suck to get sued by your seller because they thought you "ruined a deal")...

Tread carefully and I would definitely look into getting a lawyer involved so there are no mis-steps on your part.

Agent #2 is a broker with a small agency (3 persons). He is licensed but not a member of any REALTOR association.

I'm just dumbfounded that someone would go directly to represented party like this. As I mentioned above, in my state, is a direct violation of our state brokerage statute to interfere with a buyer or seller representation agreement.

What are the differences in the two offers? You mentioned agent 2's offer would close sooner. Is that the only difference? Maybe agent 1's buyer can push up closing and there would be no reason for the sellers to entertain the second offer and risk litigation.

It's hard to say if Agent 2 is interfering with your seller representation. He'll say he is just representing his buyer and that you'll get the same listing side commission. The fact that he asked the sellers to have their lawyer look for an "out" means he knows they are locked in with Buyer 1 if there is no "out."

Chris,

The interference is going directly to the seller, represented by us, presenting his offer, coaching the sellers on what to do and inducing them to sign. That is a clear violation of our seller representation agreement which provides that our agency will handle the marketing, negotiating, and closing of the transaction. Of note, Agent #2 knew were representing the seller. He had expressed irritation with my agent because she had the listing.

As to the two offer, the key issue is time of closing. There is a difference of a few weeks.

As I indicated earlier, my clear inclination is, if offer #2 closes, to deny the agent compensation since he is not a member of our mls. I've never done that to anyone (we often have offers from outside our mls) but I'm feeling this may be the appropriate case.

I'd be concerned that if his commission didn't show up on the preliminary HUD statment that it might throw the deal into jeopardy.

Not really sure what other options you might have...again - gotta say I'd probably contact an attourney (or at least talk to someone at your local board and see what they have to say).

I know in Florida we can call the FAR Legal Hotline (lawyers are on staff to answer questions for us - paid for out of our state association dues)..there's always a bit of a wait...but it's better than paying several hundred for a consultation. Do they ahve something similar in Idaho?

Does Agent #1 and Buyer #1 know about the second contract? What are they doing? It seems like letters from either Buyer #1's attorney or Agent/Broker #1's attorney to sellers and to Agent #2 is in order.

You should complain to the state agency overseeing licenses about Agent #2. And if contract #2 closes, don't pay Agent #2 if he's not entitled to compensation.

If the second offer closes first the seller can probably expect a lawsuit from the first buyer.

The seller needs to talk to a lawyer. He is in a big mess. The second agent is also guilty of tortuous interference with a contract, 1st with your listing agreement and 2nd with the contract to purchase.

Steve,

Since you are the designated broker of this listing agent, it will be your job to step into this situation with legal facts. Call your state's Real Estate Commission and find out what the law is with this scenario.

About the other agent going straight to the seller with their offer, I believe that is illegal because they do hold a state license. You cannot interfere with another licensed agent's client relationship. It sounds like that is what they're doing. Make sure your seller is aware of all the legal actions that could possibly take place whatever they decide to do. No matter what happens, make sure you and your agent do everything legally. You do not want to be part of a lawsuit from the original buyers if they decide to sue. If I were buyer #1 in this case and the seller cancelled our contract to accept buyer #2's offer, I would sue the seller, the seller's agent, the agent's broker, and the buyer #2's broker. Don't let it get that far.

Let us know how it turns out. Good luck with that.

It really annoys me that this other agent is attempting to strong-arm his way into this process. You are to be commended for your restraint and careful manuevering thus far, but do please give him a good b*tch-slap of some kind when it's all said and done! Not paying the commission would be a good one, if that's legal. Getting him reprimanded or suspended is another.

He obviously told his buyer, don't worry I'll take care of this and make sure you get the property. Now he's just created a situation that might very well result in just that- which is NOT RIGHT.

Or maybe I'm just a naive newbie. But it sure stinks from here!

What a PITA.

-jeff

Thanks for the discussion.

My thoughts have coalesced over the day. My intention is to do the following:

* Meet with the seller and review the situation with them. Advise them to obtain legal advice on this one. Warn that a nasty lawsuit is likely without solid legal advice.

* File a complaint tomorrow with the Idaho Real Estate Commission asking for termination of buyer agent #2's license and/or disciplinary action predicated on these elements:

- Interference with our seller representation agreement by denying our client with the benefit of representation and potentially putting our client at legal risk.

- Engaging in the unauthorized practice of law by providing a legal opinion to our seller on the validity of buyer offer #1.

- Communicating with our client to their potential determinant while advocating for his client without required disclosures.

- Presenting a contract which fails to meet the requirements of current state law.

- Doing so with full knowledge of the existence of our representation agreement as evidenced by 1) his conversation with my agent a few months ago about the listing and 2) the fax to my agent indicating that he would handle this one and all she needed to do was pick up the check at closing.

I'll also be conversing with our corporate attorney in the morning.

Fun day. Yeah!

Tell us what happens!!

-jeff

Jeff --

I want this guy's head on a stake. I want his license terminated.

This is not a mistake. It was a deliberate, systematic act.

I rarely am enraged by the actions of others but this one has.

The consequences should be significant -- and permanent. At least in my ever humble opinion.

Definitely keep us in the loop over here...very curious as to what your corporate lawyer has to say about it (and the outcome). It's a seriously messed up situation and I'd be wanting his head on a stake too.

Yeah, the situation as you describe it is a mess. He's messed up your relationship with your client, thrown confusion and chaos into an existing deal (contract), messed things up between your agent and the seller...

Oh- is Buyer #1 represented, or was your agent in dual agency? If buyer #1 was represented, then there's gonna be a fire to put out on THAT front, too.

Go get him!

-jeff

Jeff ---

Buyer #1 is represented by another agency.

I spoke with our real estate commission this morning. Not pleased at all at the agent's actions. I'm preparing a formal complaint now.

Right. So that other agency could come after YOU for a commission, right?

What a mess...

-jeff

Wow, I'm amazed at this..... hope everything goes well! If you haven't had a chance yet, try to arrange a sit-down with your seller, their lawyer, and yourself. Just so the lawyer can fully explain the legal ramifications of any action they choose to proceed with. As long as you follow COE guidlines and the law, you should be protected.

Previous relationship or not, the other agent went around your agent's listing agreement to negotiate directly with the seller. In my state, that is a clear license violation; and I'm glad you have contacted your state real estate commission. No matter how it all turns out, your agent's relationship with the seller has been affected.

Your seller absolutely needs to consult an attorney before continuing with Contract 2.

Good luck in the his-head-on-a-stake quest!

Shaner,

Working on the sit-down with the seller tomorrow.

I had a severe allergic reaction today (literally covered with hives) so I'm a bit behind today. Not sure the trigger. Maybe the irritation of this whole thing.

All the support and advice you've gotten here is sound. I'd only add that state real estate boards are not overly helpful when problems arise between licensees. They are more concerned with protecting the consumer. So, don't be disappointed if not much gets done for you. In the main you've not been damaged yet. You have reason to believe that the evil agent's actions MAY damage you, but as of now, that's just informed conjecture. Yes, he has done all the things you outlined; but, the effects can only be theorized.

Your seller has breached his listing agreement with you, I think that's fairly clear, by his own interference in a contracted sale going forward, by negotiating and accepting a contract without you, his broker, etc. I would throw that into the mix in that your commission is now payable due to his breach of your listing agreement. That is, if your listing contracts contain that language. That the seller is going to be sued goes without saying. How many people sue him is another question.

Buyers #1 could attempt to sue you, and your recourse would be against the evil agent/broker. You could not reasonably be expected to protect buyers #1 or their representing broker from frauds committed by your seller, which frauds were encouraged and ratified by evil agent.

And finally, sellers do not care what your legal or ethical obligations are under the terms of your licensing. They do not care that it is your "duty" to protect them. That's your problem, not theirs. They don't want your protection, they want to sell their property.

I just had a renegade seller participate in negotiations with a buyer (got her telephone number and called her), and began negotiating with her at the SAME TIME she was negotiating with us through her agent. Told her to get rid of her agent and he'd sell to her for less. He actually did this three times, as he had several properties listed (we later discovered). Also advertised the properties online with DIFFERENT prices and inducements... When confronted by me, he told me all my talk about him getting sued, me getting sued, statues, laws, ethics-- he characterized as "mumbo jumbo", and he was only interested in getting his properties sold. That's the bottom line.

So, a sitdown with the seller will most probably be fruitless and might produce more hives. Just don't let the hives get down your throat. Seriously.

Staggart

You don't mention what agent representing buyers on contract one is doing.

If it were me I would have my attorney writing the agent and his buyers on contract #2 that if they don't withdraw we will file a tortuous interference with a contract suit against the agent and the buyers. Making sure buyers get a copy.

And at the same time I would have him send your sellers a letter confirming a valid contract exists and any breach by them will be dealt with in court.

Brian

Steve,
I think you will be deeply disappointed in your expectations of the Real Estate Commission doing anything to this agent.

Does Idaho have a contract that is mandated by state statute? If not using an older contract is no really a punishable offense.

Yes the agent presented their clients offer directly to your seller but it was your seller that accepted the contract without consulting you their listing broker. Have you been damaged by this act? I am not saying I agree with what the agent did but just stating the reality of the situation.

The agent just stated a fact that should they wish to accept the second offer they should talk to their attorney who should be able to find a loophole to get them out of the contract. This is not UPL as you stated because the agent told them to call their attorney. A good real estate attorney would likely be able to find a reason to void the first contract.

As DueDiligence stated you have not been actually damaged in any way by this agents actions.

Has the seller actually rejected the first accepted offer?

Paul,

The key is that Idaho has a statute that states:

"Interference with real estate brokerage agreement prohibited. It shall be unlawful for any person, licensed or unlicensed, to interfere with the contractual relationship between a broker and a client. . . . (Idaho Code 54-2054(4)."

The Idaho Real Estate Commission is authorized to penalize licensees who violate the statutue by permanently terminating a license, temporarily suspending a license and/or imposing civil fines of up to $5,000.

This was unequivocal and intentional interference.

As to damages, this really has nothing to do with that. We'll get paid either way. But, the seller could face a lawsuit from Buyer #1 or Buyer #2 with potential liability in the hundreds of thousands of dollars. All because a licensees was so greedy that he was willing to pretend like our listing agreement didn't exist.

Will be interested to see how the commission decides the issue.

It's not legal mumbo jumbo when it's being told to the seller by their own lawyer. That why I said that he should have the the seller, their lawyer, and himself in the room. Trust me, clients listen when their own lawyer is telling them something!

Just checking in to see how things are going in this situation! Maybe no news is good news?

Looking at that statute cite, the possible bar to proceeding under it would be that it appears to address only the listing agreement between a broker and seller (possibly broker and buyer, too-- and that would be real murky). Evil agent has not upset or interfered with that contractual relationship-- you still have it in place. The statute says nothing about what constitutes interference. But, probably the spirit of the statute prohibits such acts as convincing or inducing a seller to end his contractual relationship with a broker to contract with him/her. I'll bet that's murky, too, in actual application-- say if the seller opened the proceedings, the lines of communication-- similar to what the seller in this "case" more or less did by permitting an offer to be brought directly to him.

Which, in our state, would not be an ethics violation-- even if the listing broker/agent said, "No way". All the agent really needs is the seller's permission, which, in this situation, the seller granted. One could assume that during the presentation of the offer, evil agent COULD offer compelling reasons why the seller should consider his offer over the previously accepted offer...

Anyway, I'm intensely interested to see what transpires.

The Idaho statute is modeled after Article 16 of the REALTOR Code of Ethics:

Article 16

REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients. (Amended 1/04)

Below are few examples cited in the NAR manual:

Case #16-2: Respect for Agency (Revised Case #21-6 May, 1988. Transferred to Article 16 November, 1994.)

Client A gave a 180-day exclusive right to sell listing of a commercial property to REALTOR® B, specifying that no “for sale” sign was to be placed on the property. REALTOR® B and his sales associates started an intensive sales effort which, after three months, had produced no offer to buy. But it had called attention to the fact that Client A’s property was for sale. When REALTOR® C heard of it, he called on Client A, saying that he understood that his property was, or soon would be, for sale, and that if Client A would list the property with him exclusively he felt confident that he could provide prompt action. Client A said the property was exclusively listed with REALTOR® B under a contract that still had about 90 days to run.

“In that case,” said REALTOR® C, “you are bound for the next 90 days to REALTOR® B. I have a really outstanding organization, constantly in touch with active buyers interested in this class of property. I am in a position to render you an exceptional service, and I will plan to call you again in 90 days or so.”

The property remained unsold during the term of REALTOR® B’s listing contract. REALTOR® C called again on Client A, and obtained his assurance that he would sign an exclusive listing of the property upon expiration of the listing contract.

When REALTOR® B called on Client A on the last day of the listing contract to seek its renewal, Client A told him of REALTOR® C’s two visits. “I was impressed by REALTOR® C’s assurance of superior service” Client A told REALTOR® B, “and in view of the fact that my listing with you produced no definite offer in the 180-day period, I have decided to give REALTOR® C a listing tomorrow.”

REALTOR® B filed a complaint with the Grievance Committee of the Board, outlined the facts, and charged that REALTOR® C’s conduct had been inconsistent with Article 16 of the Code of Ethics.

The Grievance Committee referred the matter to the Professional Standards Committee.

At the conclusion of the hearing, the panel found that REALTOR® C had violated Article 16 by failing to respect the exclusive agency of REALTOR® B. The panel’s decision advised that REALTOR® C’s original contact with Client A, made at a time when he had no knowledge of REALTOR® B’s exclusive listing, was not in itself unethical, but that as soon as he learned of REALTOR® B’s status as the client’s exclusive agent, he should have taken an attitude of respect for the agency of another REALTOR®, and refrained from any effort to get the listing until after the expiration date of the original contract.

REALTOR® C’s attitude of regarding the client’s relationship with REALTOR® B as a kind of misfortune, of presenting his own service as superior to REALTOR® B’s, and of suggesting to the client that, having a better capacity to serve him, he could wait until REALTOR® B’s listing had expired, was, the panel said, contrary to the respect for another REALTOR®’s exclusive agency required by Article 16.

The Hearing Panel’s decision further advised REALTOR® C that he would have conducted himself in accord with Article 16 if, upon learning of REALTOR® B’s status as exclusive agent, he had expressed his willingness to cooperate with REALTOR® B in the sale of Client A’s property


Case #16-18: Assumed Consent for Direct Contact (Reaffirmed Case #22-2 May, 1988. Transferred to Article 3 November, 1994. Transferred to Article 16 November, 2001.)

REALTOR® A, who held an exclusive listing of Client B’s property, invited REALTOR® C to cooperate with him. When REALTOR® C, shortly thereafter, received an offer to purchase the property and took it to REALTOR® A, the latter took REALTOR® C with him to present the offer to Client B, and negotiations for the sale were started. The next day, REALTOR® C called on Client B alone, recommended that he accept the offer which was at less than the listed price, and Client B agreed. The contract was signed and the sale was made.

These facts were detailed in a complaint by REALTOR® A to the Board of REALTORS® charging REALTOR® C with unethical conduct in violation of Article 16, having made his second contact with the client without his, REALTOR® A’s, consent.

At the subsequent hearing, REALTOR® C defended his actions on the basis that since he had been invited to cooperate with REALTOR® A, and particularly since REALTOR® A had invited him to be present when his offer was presented to the seller, REALTOR® C had assumed that he had REALTOR® A’s consent for subsequent direct contacts with Client B. He stated further that he had a good reason for going alone because in his first visit to the client, REALTOR® A had undertaken to present his, REALTOR® C’s, offer without fully understanding it and had made an inept presentation. Questioning by members of the Hearing Panel revealed that there had been some important considerations that REALTOR® A had not understood or explained to the client.

The conclusion of the panel was that the consent of the listing broker required by Article 16, as interpreted by Standard of Practice 16-13, cannot be assumed, but must be expressed; and that REALTOR® C had violated Article 16 by negotiating directly with REALTOR® A’s client without REALTOR® A’s consent.

Maybe I missed it (and I don't want to review the entire thread) but what is the agent and broker who represent the buyer on the initial contract doing to protect their buyer's interest? Does that buyer or his agent/broker have an attorney involved? Are they all just twiddling their thumbs?

Chris --

They've strengthened their offer further.

But, the real fun (legal action) is in the near future.

WAIT!! What do you mean, "strengthened their offer"? If they are under contract, they have a contract--not an offer. Why would they need to strengthen a contract? It's either a contract or an offer.

Perhaps you meant to say that they have continued to perform under the terms of the contract?

Lizl,

They've removed some of their contingencies.

Ah-ha! That's great. Not only are they performing, they are going above the requirements of the original contract. Good for them!

I'm more worried that with all of the brokers in this forum, no one noticed the obvious issue of Staggart's agent practicing law. I'm not sure what the real estate laws are in Idaho but in California it is illegal for an agent to give legal advice. This can be anything from an agent suggesting to a buyer that he/she should deed as joint tenancy to an agent talking to a buyer/seller about being sued or being able to sue.

What the saleperson should say: This seems like an issue you would want to bring up with your lawyer.

Anything less is something you could be penalized for. Did anyone actually take real estate law?

Teke,

Point of clarification: My agent never "engaged in the practice of law." It was the agent who went directly to our seller bypassing my agent.

Point 1: The hives are probably directly related to this issue. It seems to have really "gotten under your skin."

Point 2: While you may be technically right that the other agent interfered with your listing agreement, you seem to be focusing on this to the exclusion of what is best for the seller in this particular case. And, as someone else said, if it can be construed that the seller initiated the conversation, then you are screwed in the sense that you will have to deal with the other agent in the transaction if contract one is kicked out.

I can understand your annoyance but which deal is more favorable for your seller? Does the seller still like and trust you?

Welcome to the forum, Teke.

Staggert is right. We were all responding to his side of the issue. There is no doubt in my mind that the other agent was wrong on many levels. I'm not so sure he was guilty of unauthorized practice of law. Didn't he advise the client to go to a lawyer to get out of the contract?

Apparently I am not communicating the facts very clearly.

Let me reiterate:

Remember Agent #2 approached the Seller and, when told of Offer #1, told them to come to his office (that evening) and presented Offer #2 to them. The key point is that Agent #2, knowing of the listing, made zero attempt to contact the Listing Agent. He presented his offer directly to the seller, negotiated with them (with his seller on the phone), and had them sign the offer. The next day, he informs the listing agent --- by fax --- of the existence of his offer.

The terms of the two offers are identical. Agent #2 wrote the offer to mirror Offer #1. The primary difference was when they would close. Of note, Buyer #1 has now made their offer more favorable. The real problem is the simultaneous existence of Offer #1 and Offer #2, both arguably accepted.

Agent #2 told the Seller that they could certainly get out of offer #1 --- just have their attorney find a loophole. The issue I have is his self-assured judgment as to the validity of Offer #1. That is a legal determination -- and is arguably the unauthorized practice of law.

Besides the #2 agent being in the wrong, the seller, according to our listing agreement para. #7 below, would also be in trouble and most likely owe the listing broker a commission..

"7. SELLER’S OBLIGATIONS TO BROKER.
a. Negotiations and Communication. Seller agrees to conduct all negotiations for the Sale of the Property only through Broker, and to refer to Broker all communications received in any form from real estate brokers, prospective buyers, tenants or any other source during the Listing Period of this contract."

Pikes Peak ---

I really like that language. I may put it in a company addendum.

Despite your feelings to the contrary it is still not UPL as he told the seller to contact their attorney so thus ends the appearance of UPL. Since it is not the Real Estate Commission that determines or prosecutes UPL they will be unable to set you straight on that. To learn th true elements of UPL I suggest you contact your state bar association.

You seem to be hung up on this UPL non-issue. I thought your real issue was that he was guilty of interfering with your listing contract.

Paul, you are correct. My focus is the interference with the listing contract.

I've not raised the UPL issue with the Idaho Real Estate Commission. I was just stunned that someone would use such an analysis to persuade someone to accept their contract.

Risky (from a liability perspective) and subject to too many analytic issues for my tastes.

Just an update ---

The broker who went directly to our seller and I spoke this week.

Here's his take: He is in an area without an mls. So he can go directly to the other agent's clients. I referenced our state agency law. He didn't care one bit.

He told me to sue him.

I think he is a worm. And, there will be consequences.

PLease keep us updated... Very interesting.

Thank you!

-jeff

Locally: In an instance where a valid offer was presented on behalf of a buyer and duly accepted by the seller, there is a binding contract enforceable at law, which is common knowledge to all real estate professionals.

In the event the seller decides to breach the terms of the binding contract, locally the buyer would have the option of filing a civil action for either breach of contract and damage or for an order for “specific performance” whereby the court orders the fulfilment of the contract, together with costs.

In fact, if the buyer is aware that the seller does not intend to honour or perform as required by the contract, the buyer could file suit for “anticipatory breach of contract” and subsequently file a “Lis pendens”on the subject property advising of the pending lawsuit awaiting final judgement of the courts.

The Listing broker, in observance of the prevailing law of contract, cannot be compelled to accept a subsequent offer on the sellers property, except as a “back-up offer” in the event of the termination of the first offer, failing that, the first accepted offer is binding.

Everybody is named in a lawsuit and in the event the listing broker mistakenly follows his client’s illegal instructions to ignore the first valid and accepted offer and proceed with the second offer, he would be definitely named as a party to the buyers lawsuit, and as a knowledgeable professional, would also be subsequently subject to disciplinary action by the regulatory authorities.

To add insult to injury, the seller finding himself between a rock and a hard place, may try and pass all the blame and legal costs onto his listing agent by claiming he acted on the erroneous advice of his listing agent, upon which he relied, and then the seller’s attorney will file a cross-action lawsuit against the listing agent for inadequate service, breach of the listing broker’s fiduciary duty and obligations to the seller.

This is a Cover Your Assets situation in what could be a stressful and costly legal action and the advice of decide what you are going to do, disclose, do and document is good advice, also in discussing this matter with the sellers or other parties, I would have a reputable witness with me, and have them document everything.

Further, I would prepare a written disclosure, for the seller’s to sign acknowledgement, of all the issues and the possible consequences as may be involved, and if he refuses to sign, I have witness to the fact that he read and understood the disclosure but refused to sign the acknowledgement.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

Devil's Advocate ---

Here, the sellers never got to hear the advice of the listing agent.

They dealt directly with the second buyer's agent.

I think what devil's advocate was getting at is that there's nothing stopping the seller from SAYING that they acted on your bad advice (i.e. it's your fault and you should have to pay...not the seller)

...then it's potentially a matter of he-said she-said...

So what! If you had an exclusive agreement, who cares if his area doesn't have an MLS? What did everyone do before MLS existed?

We simply rode up on our dinosaurs, grabbed the homeowner by the hair (if it was a woman) or clubbed him (if a man) and moved in!

Simple.

-jeff

Rule #1 do not give legal advice!!! tell them to get it

Any updates to this story yet Steve?

Not yet. Soon.

LOL

Sounds like you got a good old boy agent on your hands. You as a broker you have a obligation not only to the seller but to every other agent in the area to make sure this agent is stopped.

Good luck and i hope this doesn't delay the closing for your company.