scenario:

you have a listing with a sign in the yard. there are 3 months left on your listing.

another firm shows up and knocks on the sellers door and says they they want to list it also for $199, plus a buyers agent fee. they give a convincing sales pitch to the seller and they agree. they put their sign in the yard and it says "buy this house and receive cash back".

Part of their deal is that if they get a buyer they will send the contract through your agency to recieve the buyers agent fee and not charge the seller twice. You still get paid on the listing side if it sells during your contract.

At the end of your listing the seller can decide to relist with you again or just use this other broker.

legal?

Not in my MLS.

That'd depend on the listing agreement you have with the seller to begin with...you don't give enough information.

- why not in your mls?

- listing type: exclusive agency

Still don't have enough info - don't know how your exclusive agency agreement reads...Ultimately it will depend on whether or not you retain the exclusive right to market the property.

good point. mine doesn't say anything about marketing - just selling. i guess that can be interpreted in more than one way.

i think it's certainly feasible for a seller to enter into two listing contracts, even if one is and exclusive right to sell, as long as the broker(s) get paid it if sells.

the right to exclusively market a property is another thing.

an argument can be made that an exclusive buyer agency that does not list the home (but offers to give cash back to a buyer) has a right to put a sign in the yard of a seller if the seller agrees. Agents might not like it.. but it is likely legal.

Our COE:
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)

…Article 16 is intended to recognize as unethical two basic types of solicitations:

First, telephone or personal solicitations of property owners who have been identified by a real estate sign, multiple listing compilation, or other information service as having exclusively listed their property with another REALTOR®; and

Second, mail or other forms of written solicitations of prospects whose properties are exclusively listed with another REALTOR® when such solicitations are not part of a general mailing but are directed specifically to property owners identified through compilations of current listings, “for sale” or “for rent” signs, or other sources of information required by Article 3 and Multiple Listing Service rules to be made available to other REALTORS® under offers of subagency or cooperation. (Amended 1/04)

Standard of Practice 16-4
REALTORS® shall not solicit a listing which is currently listed exclusively with another broker. However, if the listing broker, when asked by the REALTOR®, refuses to disclose the expiration date and nature of such listing; i.e., an exclusive right to sell, an exclusive agency, open listing, or other form of contractual agreement between the listing broker and the client, the REALTOR® may contact the owner to secure such information and may discuss the terms upon which the REALTOR® might take a future listing or, alternatively, may take a listing to become effective upon expiration of any existing exclusive listing. (Amended 1/94)
…Standard of Practice 16-8
The fact that an exclusive agreement has been entered into with a REALTOR® shall not preclude or inhibit any other REALTOR® from entering into a similar agreement after the expiration of the prior agreement. (Amended 1/98)
Etc., etc.

coe says play nice. what does the law say for someone that is not a Realtor?

"coe says play nice. what does the law say for someone that is not a Realtor?"

Pretty much the same, the COE is very much in line with contract law and consumer protection laws in my state.

In an Exclusive Agency there is one and only one listing contract between a broker and a seller. If seller is procuring cause, seller does not pay listing broker. Otherwise broker gets paid.

The example Broker gave sounds like an "Open" or Non-exclusive agency. Seller can have as many listing brokers and the broker with procuring cause will get paid. If seller is procuring cause, no broker gets paid.

The best broker protection is Exclusive Right To Sell, there is one and only one listing contract between a broker and a seller and the listing broker gets paid no matter who has procuring cause.

let me ask this a different way then:

what if an exclusive buyers agency firm (non-Realtor) knocked on the door of any listed house and asked the seller if they could put their sign in the yard that said: "Cash back when you buy this home - call us at XXXXX".

while the listing broker could technically refuse to pay compensation to the non-Realtor firm... the seller would, i am sure, be adamant they do so.

there is supposed to be a seperation between seller agency and buyer agency.. and under this scenario the seller gets their house sold, the buyer is represented on their side and gets some savings and the listing agency earns their listing-side commission.

This is what the seller agrees to in our listing contract:
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.
b. No Existing Listing Agreement. Seller represents that Seller "Is", "Is Not" (check the box that applies)currently a party to any listing agreement with any other broker to sell the Property.

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.

17. LIMITATION ON THIRD-PARTY COMPENSATION. Neither Broker nor the Brokerage Firm, except as set forth in § 16, shall accept compensation from any other person or entity in connection with the Property without the written consent of Seller. Additionally, neither Broker nor Brokerage Firm shall assess or receive mark-ups or other compensation for services performed by any third party or affiliated business entity unless Seller signs a separate written consent.

The buyer doesn't get representation in this scenario because the buyer agent has a prior relationship ($199 contract) with the seller.

Around here, town ordinances only allow one sale sign per yard.

"The buyer doesn't get representation in this scenario because the buyer agent has a prior relationship ($199 contract) with the seller."

That listing doesn't exist in this new scenario. I should have been clear that this is a whole new take on the issue.

Pikes - i don't see how those apply to the second scenario.

I know this is out-of-the-box thinking but these boards are woefully stagnant with threads that make people think.

That's the point. Your scenario is not legal here.

Actually Pikes' post does apply to the second scenario.



If the company wanting to put the sign in the ground is a real estate brokerage (which they would have to be in order to represent a buyer in the transaction) then the seller is to refer all "communications" by that real estate broker, to their own listing agent.

Creating an agreement whereby the secondary company is allowed to place a sign in the yard and advertise for buyers would take "communication" which should have been referred to the listing agent.

Whether it's legal or not is for an attorney to decide...but based on my understanding of english, it would not be allowed based on the portion of the listing agreement that Pikes presented.

buyers aren't contacting the seller off that sign... they are contacting the buyers agency directly.

"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."

based on this listing contract wording - the seller can refer/let the other broker know that a buyers agency has also put a sign in the yard... but buyers are contacting the buyers agency directly off of their sign because they will give them cash back.

i know what the intent of the listing agreement is.. and that may be what a judge sees... but this is not unlike a mortgage company putting their sign on a property saying "cash back" in addition to a realtor sign, getting calls from buyers and then referring them to another buyer agency that will do so.

Real estate and mortgage services are not the same and require seperate licenses and have different ethical and legal obligations to the public.

there's a huge difference between "referring all communication to an agent" and "letting an agent know the outcome after communication has already been established and an agreement executed"



Broker - you're changing the meaning of the word "refer" (by using the slash) to suit your argument.

"there's a huge difference between "referring all communication to an agent" and "letting an agent know the outcome after communication has already been established and an agreement executed""

yes there is and that's and excellent point.. but I don't think it applies to this situation since it is meant to make sure that all offers are sent through the broker so that they are ensured they get paid. the key here is that the orginal listing broker is going to get paid for their listing side work no matter what.

the cleanest way around this then is for a mortgage company to put a sign in the yard and then refer buyers to a buyers agent.

"Real estate and mortgage services are not the same and require seperate licenses and have different ethical and legal obligations to the public."

while this is true, this is one of the core issues of this thread - ethical and legal obligations to the public. Is it ethical for a real estate company to stifle competiton that may get a consumers home sold faster through wording on a listing contract? Is there anything unethical or illegal (for the consumer) about having two companies list one house if that's what the seller wants?

who as a consumer wouldn't want to save money?

How many signs in the yard does it take to sell one home?
Which sign in the yard will make potential buyers call first, the one that says price reduced by $25k or the one that says all closing cost paid if you call this sign?
As the listing broker, why would you let the owner place a FSBO sign in the yard next to yours?
It is difficult enough to make a living in this business without someone else running interference. As agents we are required to use the MANDATORY contracts given to us, otherwise we are practicing law, the reason is for the consumers protection, not for stifling competition.
The consumer can list with more than one RE company, unless it's a unique high priced property, personally, I would not waste my time.