Hello All -

I just closed yesterday on a deal that was quite the nightmare. I got a lead on my website three months ago from a couple from out of town that was looking to move to my area as the result of a job transfer. At that point I began sending them homes that matched their criteria over the next few months.

Well, they then finally scheduled some time around the first of June to come up and look at homes with me. They had only planned to be in town for 1 day and look at as many homes as possible and have one to make an offer on by the end of day. Well, after looking at close to 15 homes in one day, they then switched gears and decided they wanted to look at new construction. So, they decided they would be back next weekend and we would resume our search only looking at new construction homes.

Before I continue, I did learn a very valuable lesson here. ALWAYS GET A BUYER’S REP. Since they seemed content on making a quick offer, and they were a little skittish on signing any permanent agreements on first visit, I decided to go ahead and show them the homes without getting the buyers rep.

Anyway, the next weekend rolled around and they called me and informed me they had 4 new homes they wanted to look at. We looked at the four homes, and they decided that they did want to make an offer on one of them. So, I wrote up the offer, negotiated the offer with the listing agent for two days, and then finally got acceptance. Everything was going just great right??? LOL WRONG!!

Two days later I got a phone call from an agent, lets call them (Agent X). I answered “Hello” and before I even knew what the call was bout I was getting attitude for stealing a client and writing an offer on a home that Agent X had shown. Agent X was upset and demanded that I share the commission with them because they claimed they were the procuring case of sale. Well, as you can imagine, I was totally shocked and just informed Agent X that I would need to get in contact with the buyers and figure out what was going on.

I then call my buyers and apparently the wife had hung around in town after our initial viewing of 15 homes. She had wanted to stay a day or two longer and get familiar with the area. Well, while driving around, she saw three homes that she wanted to see right away. They were right next to each other and new construction. She said that she knew I had in-laws in from out of state and did not want to bother me for just an hour or so called a guy that was in that immediate area and that 3 other people from her husbands company had used with their relocation. Whatever the case, she viewed three homes with Agent X. Agent X did not ask if they were using another agent, got nothing signed by them, and did not give go over the Information about Brokerage services form either. Basically just showed up, and let them in the home, and left. Then a day or so later the buyers proceeded to call me the next day and set up appointments to view those three homes again with her husband now in town.

Either way, both of use were deceived by the buyers. My question is sort of how agent X handled the situation. Agent X was very hostile towards me and very demanding, telling me how busy that they were, and they did not have time to be showing people homes and not get paid for it. Basically trying to “Big time” the new agent. I am not this type of person and hope I never get to a point where I handle myself this way. Honestly had this person called me and inquired what went on, and really just talked through things with me to get to the bottom of things I would have probably gladly split my commission with them 50/50. However, with their attitude and bigtiming I really did not want to give them anything. After speaking with my broker they said that it was up to me whether I wanted to concede to a 20% referral fee that they were asking for and that they would support me either way. However after doing some legwork it appeared this other Agent X had passed the bar exam as well, which explained the jargon they tried spouting off to me on the phone. Anyway, my brokerage felt that this person may be such a jerk that they seemed like someone who might really try to take things legally in the end, so my brokerage suggested I just give the 20% referral fee and get on with things.

I know this is along story, but I just really wanted to get some feedback from all you professionals. Is that how you would have handled things??? Would you have demanded a commission split from the other agent if you had only spent 1 hour with this person that was already working with another realtor that had been for months? My stance is this, I always want to do what is best for my clients, and if they feel it is in their best interest to go with another realtor after viewing a home with me then that is their prerogative. I am not going to chase realtors around trying to get commissions from these customers. Anyway, I just felt that it was really sorry and busch league, but wanted to see what the board thought because maybe I am off base here in thinking like that?

Funny thing is this though in the end I am going to come out in good shape because while many of the transferees had used this agent, he will probably lose that referral business within that company because the buyers I worked with were so put off with this person, and how he tried to strong-arm everyone that they have sent out a communication to the husbands job informing anyone that is on the verge of transferring to the area to stay away from this person. Flip side is that I have already been contacted by two people that are transferring up with his company. So hopefully those referrals will now come to me!! 

Thanks for letting me share my story and I welcome your thoughts, and if I need checked, let me know!

He may very well get all of the commission if this goes to arbitration. I would gladly pay the 20%, whether he was a jerk or not. Typically , the procuring cause, the one who laid the foundation for the rest of the transaction, wins the case...all of it. this is a real bummer I know, but it is my thoughts that 20% would be better than losing all of the money.
I may be wrong, but it sounds to me as if he were the procuring cause as he showed the property first.

I've been in this situation before, however I was "Agent X" as in the procurring cause. The buyer went with someone else after I showed the house and devised very detailed market data on the homes in the area and a strategy for negotiating an offer since he was completely adament about his incredibly lowball offer. I took the matter to my broker and was actually discouraged from taking it to the RE Commission and was told it would permanently damage my reputation and future business in the RE community.

What I'm getting at is that Agent X might have come across very strong because they knew it would be an uphill battle for them if they pursued legal action against you. So they might have felt the need to overcompensate by intimidating you initially to gain control of the situation before it went to the higher powers.

It's hard to suggest that you cut your loss and give the 20% considering how he/she approached you. What's even more upsetting is to know that this certainly won't be the last person to think it's perfectly acceptable to talk down to you this way.

Not trying to sound biased since I've been the other agent but it might be best to break bread on this one, but I'd definately let the other agent know how unprofessional they were about the matter. I'd also let them know if they could learn how to carry themselves like professionals they might keep clients and not have to resort to extremes in order to get paid. Most importantly, never get too involved with a client without a pre approval or agency agreement.

Well a few things to think about....

We have a saying in this business BUYERS are LIARS!

Never ever leave your commission or the way you run your business in the hands of a buyer.

Some on here will say not to use an eba,I strongly DISAGREE and i do not leave my business up for chance.Most buyers do not understand an eba agreement and they think it locks them in to paying you a commission even if you give crappy service or they don't like you.

What an EBA does is spell out who is representing the buyer and negotiating on there behalf,signing the agreement protects the buyers at least it's this way in ga.

You need to remember this in the re business"you always get alot more with honey than with vinegar"

In reality both of you screwed up this transaction by not getting an eba signed.The buyer was using the other agent as a pawn and that is not right.

Some buyers you will get future refferals from but most of the time the value is in forging long lasting relationships with your fellow peers that you will see for years to come.
Remember we all play in the same sandbox.

Getting the eba signed is easy have a 1 week intro period to see if you guys click and then at that time sign a longer agreement.

Buyers just don't want to be locked into a long term eba if they don't know they like working with you yet or not,the trial period solves this problem.

good luck

I Think a 20 percent refferal is not out of line.

I do two week Buyer Broker agreements. I have never met a buyer who hesitated on that. That said, if you waived it in from of the board during an arbitration hearing, they would not care less and still award the money to whomever was the procuring cause...all the money. BUT, by having your buyer sign that, they(the buyer) would feel the commitment and they would not even call this other Yahoo. I tell my buyers that by giving me a two week commitment, I will work harder to find them a home. If they will not commit for two weeks, how hard to you want to work for them. As mentioned, all of my buyers sign a two week deal. then we do another for two weeks.

Who wrote the offer?
The other agent evidently did not give a very good impression - if they would have, they would have written the offer. Just because they showed the property does NOT make them the procuring cause.
You answered your own question. I would NOT pay the other agent a single dime - It was not earned. :rolleyes:

We just covered this in a Code of Ethics class last week. Whomever showed that proerty, developed the interest and layed the foundation for that sale is the procuring cause. the person who wrote the offer did none of that.

In my opinion, this is the procuring cause -

I was agent x at on time, and I took 75% of the commissions without having to go to arbitration.

Read the OP, he did show the home when the husband came back. The wife took a look earlier in the week. As for "procuring cause" and how it's defined, it varies from state to state just as other real estate customs do. Agent "X" should have said something before the contract was accepted, IMO he should act like a big boy and eat it. Showing new construction is part of representing the sellers also.

I may be wrong...From the NAR manual...
"The Realtor responsible for first introducing the buyer to the subject property would be the procuring cause."
Exceptions:
1.Efforts and info provided by the first Realtor(Agent X in this case) were insufficient in assisting the buyer to reach a decision.
2.The first Realtor abandoned the buyer.
3.the first Realtor estranged the buyer.
4.the second Realtor removed an impediment which was preventing the buyer from purchasing property.

So, the Dude that showed the proerty is normally the procuring cause, but said dude may have fallen into the exceptions. They do not do "Dude Speak" in the Code of Ethics, but this stuff is in there.

The problem with the NAR COE, and don't let anyone tell you different, is that the COE is voluntary and is not law. Your state commission/board follows and interprets your state laws, not the NAR COE. If this were to go in front of the commission or a judge case law from that jurisdiction would rule not NARs COE.

With that in mind maybe a grievance is filed with the local REALTOR association. Look at #1 and remember that Agent X showed the home to the wife, the OP later showed the home to both the husband and wife then wrote a contract. Also consider the part of COE which says to put your clients interests first and your compensation last. Agent X may have a gripe but whatever happened to serving your customer? Is showing a home not part of his duty? And it's not like Agent X is totally out of the loop. This isn't a case of the buyers brother in law sending a contract over and has never seen the home or showed the buyers any other properties.

Yeah, I mentioned the exceptions and it seems he falls under those. Not certain about law vs. COE and COE being voluntary. As a Realtor, what happens if I say they are voluntary and choose to not follow them? I get fined and possibley lose my license. So, while it may not be law I do not know how voluntary they are.

Were you forced to join the NAR? No, joining is voluntary and not necessary to be licensed to sell real estate. Violating NARs COE will not in and of itself result in enforcement action by any state real estate board. Now the action may run contrary to state licensing law and that's what may cost you your license, not that you violated the COE.

The NAR does not issue licenses, you are a member/affiliate of a privately held/run association. You do not have to join to sell real estate and not all REALTOR members are licensed to sell real estate.

Your state issues/regulates real estate licenses and does not enforce NARs COE.

SMGardner, I like the idea of the two week EBA. I often do a one day EBA, but two weeks is not a huge commitment either, so from now that's what I'll recommend to buyers. Thanks.