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#189065 - 12/24/07 02:06 PM Something To Never Get Caught In
steph5280 Offline
Junior Member

Registered: 12/21/07
Posts: 3
Loc: Austin,TX
I am a Realtor in a resort community in Texas, popular for vacation home sales.

In February of 2006, I was referred to a client by a friend of mine. He was interested in purchasing a vacation home, as he wanted to move his boat to the area. After setting up a search for him, he and his wife made a trip to the area to look a potential residences. Because of personal family problems, they decided not to puchase at that time. They made several more appointments throughout the year, but always cancelled at the last minute.

In April of 2007, they made the trip again and had picked out several listings to take a look at. I knew based on what they had liked before, they would not care for any of them, so I previewed a few that, while in their gateway, were not selected as something they wanted to see. We looked at all of the homes, and as I suspected they decided to make an offer on one of the homes that was not on their initial list. The asking price was 230K, and the home had been on the market for 8 days. We made an offer for 224K. The sellers agent came back with a counter of 227K. When I spoke to my client, he wanted to think about it. I told him I was sure the property would go quickly, as it was priced very well. He called back 24 hours later, and said he would pay 227K. When I called the seller's agent, he informed me he had received another offer that morning, and to bring our best offer. My client decided to come back at 228K. I was called later by the sellers agent, and told that the other offer had been accepted.

I always keep an eye on properties that I have lost as they go through the pending process, and I was shocked to see that the sellers agent had raised the asking price to 240K, while it was still pending. In the mean time my client had continued to mark favorites on his gateway, and inquire about other properties. Then, abruptly he asked to be discontinued from the search, with no explanation. I figured it was family problems again.

Last week I learned that my former client was the ultimate buyer of the property. He paid 240K for it and used the sellers agent and a girl from his office that had her license for 1 month as the intermediary. I have no idea who contacted whom, and have gone through a wide range of emotions in regards to these turn of events.

Foolishly, I did not have a buyers argeement with these people, as they were friends of a friend, and I trusted them. I can honestly say, I will never do this again, and I hope that this posting will prevent another agent from having this happen to them. I am waiting until after the holidays to decide if I am going to confront the sellers agent. Any advice would be appreciated.

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#189074 - 12/24/07 03:34 PM Re: Something To Never Get Caught In [Re: steph5280]
Perky_REALTOR Offline
Mod Squad
Major Contributor

Registered: 11/27/06
Posts: 7685
Loc: PA
That bites.

However, did you have your offers in writing? Wouldn't that be enough to show procuring cause??

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#189075 - 12/24/07 03:43 PM Re: Something To Never Get Caught In [Re: Perky_REALTOR]
steph5280 Offline
Junior Member

Registered: 12/21/07
Posts: 3
Loc: Austin,TX
Yes, both offers were submitted in writing and signed by the buyer.

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#189087 - 12/24/07 05:09 PM Re: Something To Never Get Caught In [Re: steph5280]
Real_Estate_GA Offline
Member

Registered: 05/05/06
Posts: 55
Loc: Atlanta
The listing broker just might owe you a commission. You procured a ready, able & willing buyer. That equals an earned commish.

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#189093 - 12/24/07 05:49 PM Re: Something To Never Get Caught In [Re: Real_Estate_GA]
Paul Oaks Offline
Major Contributor

Registered: 06/23/04
Posts: 3370
Loc: Central Illinois
I agree 100%. Contact the listing broker and inform him or her that you have a procuring cause case and will be filing it with the board.


 Originally Posted By: Real_Estate_GA
The listing broker just might owe you a commission. You procured a ready, able & willing buyer. That equals an earned commish.
_________________________
Paul Oaks
Oaks Real Estate Group

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#189131 - 12/25/07 09:15 AM Re: Something To Never Get Caught In [Re: Paul Oaks]
super realtor Offline
Major Contributor

Registered: 05/01/05
Posts: 8473
Loc: georgia
This is a dog eat dog world.Even when I deal with family-ESPECIALLY family everything is in writing.Had you made them sign an EBA up front and they said no I don't want to do that you would have had your answer on there intentions.

Some buyers have to be given the benefits before they sign but that is different from this situation.I would just get over it and move on.

File the grievance if you want to.You have to decide how YOU will be treated and how YOU want to run your business.Don't ever lose site of that with buyers and sellers.

I have different developers that want to work with me.The ones that don't play on my terms can go off a cliff I could care less.There are many that will gladly compensate me for what I feel I am worth for my time.You only have so much time so you need to maximize it.

Merry Christmas and I hope your presents are EXTRA BIG this year!

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#189134 - 12/25/07 09:30 AM Re: Something To Never Get Caught In [Re: super realtor]
staggart Offline
Veteran Member

Registered: 09/18/04
Posts: 930
Loc: Idaho Falls, ID, USA
I'm not sure if this situation meets the definition of procuring cause.

Based on the initial statement. the initial offer was not accepted. If there was another offer (the one the listing agent claimed had been accepted), then this offer was rejected on its own terms.

A client without a buyer representation agreement is then free to use whomever they want in the future -- even on the same property.

Having said that, was what the buyers did appropriate? No. They cut Steph5280 out of the deal for indeterminate reasons. As mentioned in the initial posting, they, justifiably, did get hit in the form of a higher closing price.

Is what the other agent/agents did unethical under the Code of Ethics? No. They did not interfere with a representation agreement since there was none.

But, were the actions of the listing broker courteous? No. The kindest thing he could have done is send the buyers back to Steph5280. The goodwill would have been worth far more than extra commission side.
_________________________
Steve Taggart
Broker
CENTURY 21 Advantage
Southeast Idaho's Real Estate Leader(sm)
The GOLD Standard(sm)
400 W. Sunnyside Road
Idaho Falls, ID 83402
(208) 524-2121
http://www.IFhomes.com
http://www.IFreschool.com
staggart@ida.net

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#189146 - 12/25/07 11:42 AM Re: Something To Never Get Caught In [Re: staggart]
TargetRE Offline
Member

Registered: 11/19/05
Posts: 177
Loc: LA
These situations are state specific. I'm not sure how TX defines procuring cause but I'd file and let the board decide. Why? It's like instant replay, it's worth a shot. And from what was written, I doubt some newbie agent landed the buyer-it appears the broker is trying to cover. Also the property was pending the whole time from when the original offer was rejected. I smell a rat. Let them produce the paper work for the state board. Don't bother with the Realtor association, they have no power to revoke, offically repremand and the COE is a joke.

Another thing. I don't blame the buyers. Since the buyers presented a recent offer through a licensed broker/agent, the listing agent in an abundance of caution and acting in a transparent manner should have contacted the previous broker/agent. How can the listing agent know he didn't interfere with a buyers agreement? I wouldn't take the word of the buyers alone. But this situation and the way the listing agent acted is the norm for the business-greed is the name of the game.


Edited by TargetRE (12/25/07 11:53 AM)

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#189156 - 12/25/07 01:55 PM Re: Something To Never Get Caught In [Re: TargetRE]
Real_Estate_GA Offline
Member

Registered: 05/05/06
Posts: 55
Loc: Atlanta
The listing broker interfered with this agent's agency relationship with the buyer. While there is no written brokerage engagement, an agency agreement was established through the original offer, albeit oral. This process is called ratification.

Had there not been a written offer to purchase, an agency relationship would be more difficult to prove.

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#189159 - 12/25/07 03:49 PM Re: Something To Never Get Caught In [Re: Real_Estate_GA]
staggart Offline
Veteran Member

Registered: 09/18/04
Posts: 930
Loc: Idaho Falls, ID, USA
Real_Estate_GA:

That is not true in most states. The majority rule is that agency is only create by a representation agreement, not orally or by a purchase & sale agreement. Of note, the Code of Ethics, in Article 16 requires REALTORS to respect agency "agreements". I've spend some time reviewing decisions with respect to this provision. I'm not aware of a case where an ethics board has upheld an oral or implied agreement.

I just looked at the Texas brokerage statute. It states, in Sec. 1101.558., that "The broker becomes the buyer's agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement." The statute goes on to say that the licenses must clearly disclose their relationship to the buyer. As I read their statutory scheme, there is no form of implied agency.

So, it looks like buyer agency is not an avenue for our friend in Texas.



Edited by staggart (12/25/07 03:52 PM)
_________________________
Steve Taggart
Broker
CENTURY 21 Advantage
Southeast Idaho's Real Estate Leader(sm)
The GOLD Standard(sm)
400 W. Sunnyside Road
Idaho Falls, ID 83402
(208) 524-2121
http://www.IFhomes.com
http://www.IFreschool.com
staggart@ida.net

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#189162 - 12/25/07 04:17 PM Re: Something To Never Get Caught In [Re: staggart]
Real_Estate_GA Offline
Member

Registered: 05/05/06
Posts: 55
Loc: Atlanta
Staggart,

You are confusing an “agency agreement” with a “brokerage engagement”. A brokerage engagement clearly defines the relationship between the buyer and the broker in writing -- and it’s enforceable in court; however, forming an agency agreement does not require an expressed written contract. By allowing the agent to prepare a written offer, the buyer -- probably unknowingly -- consented to an agency agreement through ratification. Thus, this is provable in court by the common law of agency.

Note: This is not legal advice and should not be construed as such.

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#189169 - 12/25/07 08:31 PM Re: Something To Never Get Caught In [Re: Real_Estate_GA]
staggart Offline
Veteran Member

Registered: 09/18/04
Posts: 930
Loc: Idaho Falls, ID, USA
Common law of agency has been eliminated in most states. In those jurisdictions, agency is governed by statute and created by a written agency agreement, usually as contained in a buyer/seller brokerage representation agreement. My reading of the Texas statute is that a writing is presumed (If anyone in Texas believes otherwise, please point out the statutory provision that allows for the creation of agency without a written agreement).

If Georgia is still doing common law agency, it is in the minority.
_________________________
Steve Taggart
Broker
CENTURY 21 Advantage
Southeast Idaho's Real Estate Leader(sm)
The GOLD Standard(sm)
400 W. Sunnyside Road
Idaho Falls, ID 83402
(208) 524-2121
http://www.IFhomes.com
http://www.IFreschool.com
staggart@ida.net

Top
#189176 - 12/25/07 09:34 PM Re: Something To Never Get Caught In [Re: steph5280]
Paceryder Offline
Veteran Member

Registered: 05/14/05
Posts: 937
Loc: The Milky Way
 Originally Posted By: steph5280
I am a Realtor in a resort community in Texas, popular for vacation home sales.

In February of 2006, I was referred to a client by a friend of mine. He was interested in purchasing a vacation home, as he wanted to move his boat to the area. After setting up a search for him, he and his wife made a trip to the area to look a potential residences. Because of personal family problems, they decided not to puchase at that time. They made several more appointments throughout the year, but always cancelled at the last minute.

In April of 2007, they made the trip again and had picked out several listings to take a look at. I knew based on what they had liked before, they would not care for any of them, so I previewed a few that, while in their gateway, were not selected as something they wanted to see. We looked at all of the homes, and as I suspected they decided to make an offer on one of the homes that was not on their initial list. The asking price was 230K, and the home had been on the market for 8 days. We made an offer for 224K. The sellers agent came back with a counter of 227K. When I spoke to my client, he wanted to think about it. I told him I was sure the property would go quickly, as it was priced very well. He called back 24 hours later, and said he would pay 227K. When I called the seller's agent, he informed me he had received another offer that morning, and to bring our best offer. My client decided to come back at 228K. I was called later by the sellers agent, and told that the other offer had been accepted.

I always keep an eye on properties that I have lost as they go through the pending process, and I was shocked to see that the sellers agent had raised the asking price to 240K, while it was still pending. In the mean time my client had continued to mark favorites on his gateway, and inquire about other properties. Then, abruptly he asked to be discontinued from the search, with no explanation. I figured it was family problems again.

Last week I learned that my former client was the ultimate buyer of the property. He paid 240K for it and used the sellers agent and a girl from his office that had her license for 1 month as the intermediary. I have no idea who contacted whom, and have gone through a wide range of emotions in regards to these turn of events.

Foolishly, I did not have a buyers argeement with these people, as they were friends of a friend, and I trusted them. I can honestly say, I will never do this again, and I hope that this posting will prevent another agent from having this happen to them. I am waiting until after the holidays to decide if I am going to confront the sellers agent. Any advice would be appreciated.


Wouldn't the selling agent have KNOWN they were the same buyer? Where I am we give the buyers name with the offer.

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#189183 - 12/25/07 10:35 PM Re: Something To Never Get Caught In [Re: Paceryder]
JoeyBagadonuts Offline
Veteran Member

Registered: 06/24/06
Posts: 1074
Loc: Bucks County PA
Wow, that does stink.
_________________________
Joseph Grabowski, REALTOR®
Keller Williams Preferred Real Estate – Yardley, PA
Buying or selling a home, land, or real estate in Bucks County Pennsylvania?
Visit my Bucks County Homes & Real Estate Website

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#189192 - 12/25/07 11:49 PM Re: Something To Never Get Caught In [Re: JoeyBagadonuts]
staggart Offline
Veteran Member

Registered: 09/18/04
Posts: 930
Loc: Idaho Falls, ID, USA
Merely writing an offer for a client does not (in most states \:\) ) create an obligation on the part of any other agent to stay away from that client. Thus, if the listing agent did recognize it was the same client, it might not be "wrong". I'm still not sure that the listing agent did anything "legally wrong" or even violated the Code of Ethics.

This discussion really highlights the importance of signing buyer representation agreements.

One point that has not yet been made is that, even if there had been a buyer rep., it might have expired (remember the offer was in April -- a six month agreement would have expired in October). It is unclear when this property actually closed.

A clear lesson is the importance of covering oneself whenever you do business (regardless of personal relationships) and the relevance of ethical conduct (here, the proper thing would have been for the listing agent to have offered something to the original agent who assisted the buyer).
_________________________
Steve Taggart
Broker
CENTURY 21 Advantage
Southeast Idaho's Real Estate Leader(sm)
The GOLD Standard(sm)
400 W. Sunnyside Road
Idaho Falls, ID 83402
(208) 524-2121
http://www.IFhomes.com
http://www.IFreschool.com
staggart@ida.net

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