Have a difficult situation I would like advice about. Husband and I decided to sell house ourselves and determined that we would offer people a $10,000 fee for a full price contract. Husband told Neighbor A that we would pay $10,000 if a purchaser was found for a full price contract. Neighbor A told Neighbor B. Neighbor B told Neighbor C that we were offering $10,000 to anyone who procured a purchaser for our house. Neighbor C immediately called around. Neighbor C called us and told Buyer A would be calling. Buyer A called within the hour and we set up a time for them to see the house. Buyer A saw the house, liked it and offered to make a bid. Husband called Neighbor C and told them that we had an interested buyer and we would pay the commission. As a result of negotiations, Buyer A agreed to pay $5,000 below our asking price in exchange for letting us stay for free one month after we settled. Husband called Neighbor C and told them the contract wasn't full price but that we wanted to offer them $1,000 for their efforts. Neighbor C said he never knew about the "full price contract" clause. At closing, a check was written out of proceeds for $1,000 and husband offered to Neighbor C who reluctantly took it. Neighbor C signed a receipt which indicated that this was in payment of any and all commissions/fees. Now we get a letter from Neighbor C's attorney citing "procuring cause" and stating that Neighbor C was acting as our broker according to our offer.

A few points about Neighbor C: there was never a written contract between us; they heard about the offer at least second hand; they never called us to clarify any terms; they claim they made monetary commitments based on their expected fee; they simply made a telephone call - there was no other involvement.

From doing some research online, I understand that procuding cause involves more than merely making a call that there has to be "ongoing negotiations".

What is everyone's take on this issue? These people never clarified any terms and, technically, the offer wasn't even made to them.

Sounds to me an awful lot like you're practicing real estate w/out a license.

Sellers do not need a real estate license to sell their own house.

However do any of these A,B,C guys have a real estate license????

In most states it is illegal for an unlicensed person to collect a fee for selling real estate.

That said I think it is pretty cheesy of you and your husband to try to whack $9,000 off what you offered just because you agreed to sell for $5,000 less than full price.

You extended the offer, Neighbor "A" passed it on with or without your consent and/or knowledge, and you then ratified it by paying "C" a partial fee.

If the sale price was, for example, $200,000 and you were willing to pay a 10 grand fee from that then you would have received $190,000 net.

Now you're taking $195,000 PLUS getting a rent free month in your house after closing and you want to pay the 'finder' $1,000 so you can net 194,000 plus the free month.

Personally I think you owe neighbor C the rest of the $10,000 you offered; you're the one that agreed to the reduced price and I also believe the terms you offered the fee under were ambiguous.

If you're house had been listed with me at, let's say 6% commision for example, and you sold for $5,000 less than list price I would have received 6% of whatever price you agreed to, not 90% less.

I know you don't need to be licensed to sell your own home. But talking "procuring cause" and "commissions" sounds a lot like terms people w/R.E. licenses use. I know that we as RealtorsŪ cannot give a referal fee, or whatever you want to call it to someone that's unlicensed. Is it not the same for one who's selling their own home?

Agree with Jim... the neighbors could be guilty of practicing real estate with out a license, while you would be guilty of being a .... well a bum.

Hope everything works out as it should... if so I think only the lawyers will be happy.

Curious,
You're being cheap and looking for some justification to go back on your word. You made a statement offering 10K to the person that brought you a buyer. Someone brought you a buyer so you should pay the 10K. Same as welching on a bet! Is that the reputation you want to earn. What ever happened to a persons word being worth something?

You do appear to be going back on your word. However, if Neighbor C does not have a Real Estate license and is trying to collect a commission for selling your home I think the Real Estate Commissioner in your state would like to speak with him.

As for the Lawyer's letter. There is an old legal saying "When you have the law on your side you pound on the law. When you have the jury on your side, you pound on the jury, and when you have nothing on your side you pound on the table". Sounds to me like this Lawyer is pounding on the table.

Unfortunately, he's likey to make mincemeat out of you unless you get a Lawyer.

Relo

i would say that neighbor C cannot legally collect anything from you because he has no license. also, a real estate agreement must be in writing for it to be enforceable by law. i dont think you went back on your word at all anyway. you stated that if someone brings you a buyer and offers full price, you would give away $10k. nobody offered full price. i would tell neighbor C to go screw. i would also consult an attorney to see if you need to hire an defense.