A couple clarifications ---

First, a seller is not obligated to accept an offer because it is full price without contingencies. A listing is merely an invitation to submit offers. It imposed absolutely no obligation on the seller to accept that offer. That is black letter contract law (not just in the real estate arena).

Second, an agent is not entitled to a commission because they submit a full price offer. A commission is only owed if the buyer & seller agree to a deal. This is often referred to as presenting a "ready, willing and able buyer". If the seller were then to back out, then the buyer's agent might have a claim.

==================================================
There are key facts missing in this example. Why would an agent decline to present an offer, particularly in the current environment? Merely disliking the party seems unlikely to trigger that reaction.

I wonder if the agent has conveyed the offer to the sellers and they simply said, verbally, "no". Perhaps the issue is that they have refused to respond in writing. They can do so. Odd. But, allowable.

Or, have the sellers dealt with these buyers before and doesn't want to go another round with them?

A seller does have the right to refuse an offer, even if full price, for any reason as long it is not because of a reason protected by fair housing guidelines.

If the seller's agent -- say he or she is suffering from a psychotic breakdown -- is truly refusing to present, then options are somewhat limited.

If a REALTOR(r), the buyer's agent may not go around the listing agent directly and present to the seller. But, he or she can inform the seller directly that they do have an offer. Even then, it is an ethical violation to present directly without involving the listing agent.

Practically, the best approach, as suggested above, is to get your broker involved and, if necessary, have a discussion with the other broker.

In NC our listing agreements state that a commission is due to the listing agent when a ready able and willing buyer is procured with the terms set forth in the listing agreement. The property does not have to go under contract if all of the terms in the listing agreement are fulfilled.

Our MLS rules state pretty much the same thing. If I bring a full price cash offer to a listing in the MLS the listing broker owes me a commission. If the seller won't sell the listing broker can either pay me out of their pocket or they can sue the seller.

I have used this rule twice on listing agents who let their sellers change the terms after I brought offers per the requirement they put in the MLS. Both agents argued with me, both agents checked the rules, both agents informed their sellers they would have to either sell or pay, both signed and sold.

Real estate is local.

Bigtoe --

I beg to differ.

I know states have varying legal structures but what you are outlining is wildly inconsistent with anything I've every heard anywhere.

You indicated that a commission is due the listing agent in North Carolina once a buyer is procured consistent with terms of the listing contract.

I went to the North Carolina Real Estate Commission's web site. It includes in the Bulleten section the following case (from New Jersey) under the title: "Important New Development in the Law of Brokerage".

This case involves a dispute over whether a commission is owed when the contract is signed or if the buyer can perform. The court sides with the second view noting: "In a practical world, the true test of a willing buyer is not met when he signs an agreement to purchase; it is demonstrated at the time of closing of title, and if he unjustifiably refuses or is unable financially to perform then, the broker has not produced a willing buyer ...."
http://www.ncrec.state.nc.us/bulletin/vol1-2bulletin/important_new_development_in_the.htm

Obviously, that is even more stringent that the standard I was outlining of compensation being owed on the signing of a valid contract. The standard cited by your real estate commission is that the key point is that the buyer must be able to perform and the test of that is at closing.

I strongly doubt North Carolina has carved out a unique exception whereby just producing a buyer obligates a listing agent to cough up cash to the buyer's agent --- when the listing broker isn't owed a commission by the seller in the same circumstance.

I don't mean to demean but I just don't believe this could be so.

If you still disagree, post the actual language from your listing agreement and mls agreement for consideration.

The buyer can approach the seller directly without having to go through the listing agent and present the offer.

Here is what our contracts say, when we get paid. (Basically, NO closing, NO pay)

Listing Contract
16. COMPENSATION TO BROKERAGE FIRM. Seller agrees that any Brokerage Firm compensation that is conditioned upon the
Sale of the Property shall be earned by Brokerage Firm as set forth herein without any discount or allowance for any efforts made by Seller
or by any other person in connection with the Sale of the Property…..
When Earned. Such commission shall be earned upon the occurrence of any of the following:
(1) Any Sale of the Property within the Listing Period by Seller, by Broker or by any other person;
(2) Broker finding a buyer who is ready, willing and able to complete the transaction as specified herein by Seller; ….
(3) Any Sale of the Property within xxx calendar days subsequent to the expiration of the Listing Period (Holdover Period)….

Purchase Contract
Earned. The Success Fee is earned by the Brokerage Firm upon the Purchase of the Property and is payable upon closing of the transaction. If any transaction fails to close as a result of the seller’s default, with no fault on the part of Buyer, the Success Fee shall be waived. If any transaction fails to close as a result of Buyer’s default, in whole or in part, the Success Fee shall not be waived; such fee shall be payable upon Buyer's default, but in any event not later than the date that the closing of the transaction was to have occurred.

I am not mistaken. Read this case again.

This case is about a buyer who refused to close and the buyer agent wanted to get paid. The agent did not bring a buyer who was willing to close so the terms of the listing agreement and MLS agreement were not met.

If the buyer was willing to close and the seller wasn't then the buyer agent would have gotten paid.

If the buyer agent brings a full price cash offer and the seller refuses to sign the buyer agent is due a commission per the MLS rules. Been there, did that.

On a side note, the court also found that the buyer who refused to close in this case was liable for the commission.

#2 says nothing about the sale closing. It says a commission is earned when a ready, willing and able buyer is procured under the terms specified by the seller.

I should have added this para. which comes after "(3)".

"The commission described in subsection 16a(1) shall be payable at the time of the closing of the Sale...."

As I said, NO Closing, NO pay.

This is how we are protected from sellers who refuse to sell. It doesn't get any more simpler then this. Below is from our listing agreement provide by the NCAR. If your listing agreement does not have something similar, you need to get your association to rewrite your forms.

From what Staggart and Pikes are saying, their sellers can refuse to sell and all their marketing efforts go unrewarded. A buyer can write a full price offer and the seller can counter back with a price higher than the list price? You need to get that fixed.

From our listing agreement:

Such fee shall be deemed earned under any of the following circumstances:
(a) If a ready, willing and able buyer is procured by Firm, a cooperating Real Estate Firm, the Seller, or anyone else during the Term of this Agreement at the price and on the terms set forth herein, or at any price and upon any terms acceptable to the Seller;
(b) If the Property is sold, exchanged, conveyed or transferred, or the Seller agrees to sell, exchange, convey or transfer the Property at any price and upon any terms whatsoever, during the Term of this Agreement or any renewal hereof;
(c) If, within days after expiration of the Term of this agreement (the “Protection Period”), Seller either directly or indirectly sells, exchanges, conveys or transfers, or agrees to sell, exchange, convey or transfer the Property upon any terms whatsoever, to any person with whom Seller, Firm, or any Cooperating Real Estate Firm communicated regarding the Property during the Term of this Agreement or any renewal hereof, provided the names of such persons are delivered or postmarked to the Seller within 15 days from date of expiration. HOWEVER, Seller shall NOT be obligated to pay such fee if a valid listing agreement is entered into between Seller and another real estate broker and the Property is sold, exchanged, conveyed or transferred during such Protection Period.

Once earned as set forth above, Firm's compensation will be due and payable at the earlier of: (i) closing on the Property; (ii) the Seller's failure to sell the Property (including but not limited to the Seller's refusal to sign an offer to purchase the Property at the price and terms stated herein or on other terms acceptable to the Seller, the Seller's default on an executed sales contract for the Property, or the Seller's agreement with a buyer to unreasonably modify or cancel an executed sales contract for the Property); or (iii) Seller's breach of this Agreement.

Since this (a sellers refusal to sell w/a full price offer) has not happened to me in almost 20 years in the RE biz, I'm not concerned about it.

I had it happen twice between 04 and 05. Not my listings. 2 of my buyers had full price offers shot down by listing agents. Both agents learned how it works and both my buyers got their respective properties.

I have never had it happen on any of my listings in 19 years but we have to cooperate to make a living and it is nice knowing our MLS protects us from weaker agents.

I think I only had it happen once: A Taxidermist's Widow had her house For Sale about 8 months after he passed on. We produced a Full Price CASH Offer without any contingencies; but by then she had a New Beau who thought he'd like to move in and learn the Deceased Husband's Trade (among other things). The Seller said she had changed her mind about selling because she was "In love Again". So we collected the Commission that we had earned on the Installment Plan; 1/6 every month for 6 months. And we sold the Buyer something else.

After 6 months, the New Beau had moved on and we put the property back on the Market W/O the BoyFriend involved. Took another 6 months; but we earned a second Commission. I felt bad for the Widow; but I got over it.

Funny thing about that discarded New Beau; he kind'a just disappeared and was never heard from again . . . . but I suppose that's a whole other story.

I have had a full price offer rejected, because my buyers refused to remove a mortgage contingency. They agreed to accept the house as is, not make it contingent upon appraisal at full sale price...the only contingency was that they would get mortgage approval.

It was a deal being handled with a relocation company. My buyers had a full price offer, were putting 20% down, had a solid pre-approval from a solid local bank, and were ready to close immediately.

Dale, your widow sounds creepy.

They did not want to be in a position to lose their deposit if for some crazy reason they didn't get a mortgage, so the deal fell apart.

This was a very frustrating deal - these buyers were dream buyers. Made an offer on the 3rd house they saw, and it was perfect for them, only a couple miles away from their work. I can't blame them for not removing the contingency...they could have lost over 10,000 if for some reason the bank backed out.

**sigh**

Toe - It's not necessarily that the seller's would counter back with a higher price. Our contracts (i'll point out that our contracts are written by the Realtor Assoc, not the Real Estate Commission) have prewritten contingencies for Financing, Appraisal, Inspection, Title, Insurance, Termite, Disclosure, etc.

You're not saying that my seller would have to accept all of these contingencies just because the purchase price was for full list are you?

They need to list the contingencies in the MLS that they do not want to accept. Otherwise, how is an agent supposed to know how to write the offer.

Perky why didn't they put down a way less earnest money deposit?

Around my way the seller will take way less for earnest money.

Used to buyers could wait until the 11th hour and pull out with a mortgage contingency. Our new contracts have a time limit and then that contingency is waived. Buyers were abusing the mortgage contingency to back out with buyers remorse at the last second (days before closing) It hurt the sellers,listing and selling brokers,etc.

It's just a fact no matter how much you protect there will be a certain level of risk for the buyers. This is why I minimize monetary deposits and try to give the seller other terms that are wins for them.