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Gloria Losie

Buyer Brokerage Agreement...Have you enforced it?

By: Gloria Losie
Wednesday, July 11, 2007 5:40 PM

I have made it a habit to secure a signed Buyer Brokerage Engagment Agreement when I have a Buyer.  Well I have an Buyer who went renegade (I have been dying to use that term). After looking at homes for two months and my spending weekends and some nights out with them, walked into an open house and the agent wrote up a Purchase & Sale Agreement.  I can't get any specifics.. Such as, did the agent ask them if they were working with an agent or did he ask if you have a signed Brokerage Agreement?  The clients don't want to speak to me as I'm sure it is embarrasing and they know they were wrong. The life of a RE agent is not easy..

What to do?  Should I enforce this?  How would I go about that? Wait till the closing and show up with the Agreement?  Can they cancel the agreement prior to closing? 

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Comments

Velda Miller
Member Since '03

Velda Miller said:

Wow.  Not had this problem with another brokerage but did have it happen with a builder. I had this couple in a buyer rep agreement, had shown them several homes, and we had even made an offer on one newly constructed home but we couldn't get together on the details so it fell through.  I had another "talking" meeting with the buyer where they indicated that they just might buy some land and build.  I told them, no problem, I can look for land too and contact a builder or two.  It was at this meeting that they also told me that they had driven past house a builder had recently completed and was putting the finishing touches on.  They wanted to get in to see this house.  No problem. I re-emphasized the buyer rep agreement and that I would still be there for them to negotiate the offer and handle all the details.  He didn't give any reaction which I thought was strange at the time and didn't give me a time when they could go see this other house.  Well, that was Ok, I figured it would give me time to talk with builder and get a key and information. The next day when I called, the buyer told me that they had made a deal on a builder's house and proceeded to tell me which house it was--- yes, you're right-- the house they had "driven past."  I'd had a strange feeling in my gut still from that other meeting with the buyer and this confirmed it.  They had indeed gone behind my back to look at the builder's house that was on the same street as another house I had shown them.  At the time, I was an agent, with less than 2 years in the business, so I was unsure as to how my broker would react to this bit of news -- whether he would support me or just tell me to forget it.  I explained everything to my broker who then contacted the builder.  My broker told the builder that he expected to be paid.  Of course, the builder tried to say he didn't know anything about the buyer rep agreement but I knew better because I had already told their rep at the newly completed home about my buyer, who they were, and that they were represented.  What the buyer didn't know and evidently the builder's rep didn't tell them was that I had already spoken with him to give him the heads up that I was going to be bringing my buyer over to see the home.  My broker threatened an attorney.  In the end, all the paperwork was re-written, the commission was lowered to 2% instead of 3% that was written in the buyer rep agreement, and the deal went through.  The buyer apologized to my broker for "not understanding the rep agreement."  Hogwash!  This guy handles contracts all the time in his job-don't tell me he didn't understand that document!

July 11, 2007 4:25 PM
Anna Horton
Member Since '07

Anna Horton said:

Enforce! Enforce! Enforce! Please, Please, Pretty Please?

Just for me if nothing else. I just had an out of state client go "renegade" (I 2 love that term) Anyway, they did not want to see houses on the market that met their requirements. They wanted to see every house on the market period. Totally uncontrollable. They flew in for 3 weekends, probably showed them 20 houses a weekend - at their insistence. We wrote a contract every Sunday & by the time Friday was around, they found something else they had to see.

Each and every contract was negotiated WAY beyond anything a reasonable person would want or expect.

The last contract really got to me: they negotiated a large price reduction with a very short closing. The sellers had just put the house on the market and were forced to move very quickly, only to have the buyers back out at the last minute...literally over nothing

Please do this for all of us! We have ALL been there. We have all learned the hard way. Usually bullies blow away at the first sign of dissention, especially if you do it while batting your eyelashes and with a really BIG 'ole smile!

July 11, 2007 4:37 PM
Velda Miller
Member Since '03

Velda Miller said:

To continue...

What is at the heart of these issues is Procuring Cause.  There are probably going to be as many different suggestions on how to handle this as there are agents who will read this.  

In procuring cause cases, you will probably need to demonstrate an unbroken and consistent series of events leading to the purchase of a home.  Will the buyer try to claim "abandonment?"  If you have made a diligent effort at staying in contact with the buyer and handling their concerns, they won't try to use this one.  They might try to use incompetence but we know that bird isn't going to fly.  In any case, for procuring cause, the transaction has to close first for you to get any settlement. It then becomes an arbitration issue.  Procuring cause is a frequent issue especially when an open house is at the heart of it.

I, personally, would try contacting the broker of the other office (or have your broker contact him/her) and see if something can be worked out.  Make sure you have all your ducks lined up where you can show that you were actively trying to serve these buyers.  He might agree to it or not but you'll never know if you don't try.  This is why I document out the gazoo on all my files.  Make sure that you can pull out proof of appointments, showings, documents in the file showing conversations with them, emails, conversations with lenders, any ammunition you can gather just in case it gets to arbitration.

July 11, 2007 4:37 PM
Vance Remele
Member Since '04

Vance Remele said:

''What to do?  Should I enforce this?  How would I go about that? Wait till the closing and show up with the Agreement?  Can they cancel the agreement prior to closing? ''

Gloria I would run it by one of your brokers, is you office on Roswell Road?

Sometimes it may be best to go on, but don't go by me ok..

If it was me that had that problem I would run it by my broker..

Vance

July 11, 2007 4:50 PM
Ed Boyer
Member Since '03

Ed Boyer said:

Personally , I would explain it to the Broker. If he is a good Broker , He should go to bat for you. I know in the real world it doesn't always work this way but if you have the agreement...I would ask that they enforce it. Maybe the agent who didn't ask the correct questions will learn from his or her 's reduction in commission ....

I have found when it hurts the paycheck....it will be remembered the next time.

July 11, 2007 5:40 PM
Joe Schutt
Member Since '06

Joe Schutt said:

I would love to enforce it also, but I would rather keep my reputation. Even though you probably have every right to do it because you have a contract, they may say to a lot of people that you MADE them pay...yadda yadda yadda...i don't think you want to deal with those repercussions. Sometimes it is just not worth it.

What did the other agent say about it?

July 11, 2007 5:44 PM
Shelly  Constantz
Member Since '07

Shelly Constantz said:

Joe has a point and you have to consider how it will affect you.  BUT, a contract is a contract and it is hard to not enforce. If you won't enforce, then why bother using one?  To just bluff?  Pretty soon that will get out to, that you bluff but it doesn't really mean anything.

July 11, 2007 5:47 PM
Joe Schutt
Member Since '06

Joe Schutt said:

I would really try to work this out with the other agent. The other agent has to keep in mind that they may have to work with you in the furure also. What would you do if they came to you next?

July 11, 2007 5:57 PM
Gloria Losie
Member Since '06

Gloria Losie said:

I have talked with the other agent and he says this is not his problem. I haven't received any calls back from his Broker.  Next to my Broker.  My Broker doesn't want to get our name in the industry as trouble makers.  Can you believe this?  I just wonder how many Brokers really do go to bat for their agents.

July 11, 2007 6:20 PM
Joe Schutt
Member Since '06

Joe Schutt said:

I have to say that mine does. Personally i would probably call the other agent and just casually say i wanted to make one more attempt at this with you and i know it is not your problem, but more professional courtesy. then let him mumble a bit. then say...Well, I look forward to the day I get to help you out in a similar situation. Have a great day!!

July 11, 2007 6:30 PM
Team Stevens
Member Since '03

Team Stevens said:

The poor other agent probably had no idea.  Yes we all should ask the question regarding current representation but I probably have not in the excitement.  

Let ht brokers handle it b/c most likely the other agent is not going to work out a fair agreement.  Is the buyer responsible for violating the agreement???  It just all depends on your state and the language of the contract.  I think at the VERY LEAST the other agent owes you a referral fee.  If not you can always exercise the contents of your agreement with the buyer but I doubt you will get far.  Most brokers ask that you just cut your loses.  A similar situation happened to my husband at Remax.  even though he was 100% in the right they did not want to pursue going after the client.

The situation SUCKS.  I hope you find resolution.

July 11, 2007 6:32 PM
Richard Strang, RECS,SRS
Member Since '04

Richard Strang, RECS,SRS said:

Gloria,  After the closing file a grievance with your local Board of realtors. Notify all parties you are going to file and do it right away as you only have 180 day to do do. In the mean time call the listing agent and your "client" and keep on top of the transaction. The reason for this is that a buyers agent agreement is not enough to claim you were the procuring cause of this sale. You will need to show an unbroken chain of events with this client leading to the sale.

July 11, 2007 7:04 PM
Joe Schutt
Member Since '06

Joe Schutt said:

Oooooohh..thats a good one Richard.

Gloria, that might be a good route to follow also, but i would definitely check with your broker still. It is not just your name, but the company's rep also.

July 11, 2007 7:08 PM
Richard Strang, RECS,SRS
Member Since '04

Richard Strang, RECS,SRS said:

Gloria, I should have told, your broker will have to file on your behalf. If he asks you  to forget about it, find another broker.... This is a tough business we can not afford to leave an money on the table..

July 11, 2007 7:09 PM
Anna Horton
Member Since '07

Anna Horton said:

Question: "How good is (or WAS) the relationship with the buyer" That should take care of your problem.

Yes, it would be incredibly tough to make that phone call, but it needs to be done. I could see a semi-friendly phone call made by you to your buyer (and they are still your client, assuming this is a recent event) asking him how he intended to handle the contract with you.

It would seem that you will need the "strength" that your broker does not wish to use.

July 11, 2007 7:20 PM
Mary Welch
Member Since '04

Mary Welch said:

Wow that bites. I have never had that happen. I don't know why to bother with a signed buyers agreement if it cannot be upheld? I've seen this discussion before but why can it not stand even though maybe you were not procuring cause?

Gene sits on his real estate board, maybe he can shed some light.

July 11, 2007 7:21 PM
Karen Weger
Member Since '05

Karen Weger said:

Hello! Yes, that is ouch. If it was presented to the buyer as a contract, in good faith they should  be responsible for paying your fee.

It is an agreement between you and the buyer, not another agent, a builder, etc... between you and the buyer. The contract reads...if you do not get a commission from the seller, the buyer agrees to pay xxx amount. Up to you how you enforce it. Tough.  Good luck. I only had this happen once on an open house and the listing agent told the buyer other contracts were in and better act quick. Then in the end the buyer  backed out because she was rushed and did not want to pay that much in a payment.

July 11, 2007 8:18 PM
Gregory Bain
Member Since '03

Gregory Bain said:

Wow! Gloria, a dishonest buyer? And someone thinks the "Board" is there to help you? I give you credit, at least you had something in writing. IMO, the paper is next to worthless. But, I find most agents just seem to run around like they found a new best friend that they are going to "protect" from those sellers. Yeah, that's why they say, "buyers are liars, sellers are.......". The good news is the builders are hurting and are actually giving real estate agents a commission. A few years ago, if they were in a good mood, they only gave a $1000 referral fee for you to split with your broker. Forget about it! Your broker won't help because if he calls the "board", they will come down and examine all his files. They are not there to help you. They are only there for themselves. They only charge you to work and fine you when you do. Take the two percent and buy your dog a nice marrow bone. The only thing worse than getting it from a buyer, seller, or, builder, is getting from a fellow agent. The more people I meet, the better I like my dog.

July 11, 2007 8:54 PM
Karen Weger
Member Since '07

Karen Weger said:

Wow Gregory. There is only so much you can do.

July 11, 2007 9:30 PM
Mary Welch
Member Since '04

Mary Welch said:

Karen, are you on holiday?

July 11, 2007 9:33 PM
Shelly  Constantz
Member Since '07

Shelly Constantz said:

Greg, would you like a sword to go with the shield?

July 11, 2007 9:38 PM
Karen Weger
Member Since '05

Karen Weger said:

No, I was on lunch break. Back to work now.

July 12, 2007 6:54 AM
Gloria Losie
Member Since '06

Gloria Losie said:

What's with all the different pictures?  Seems like a great deal of you are putting up different pictures.

July 12, 2007 7:07 AM
Gregory Bain
Member Since '03

Gregory Bain said:

Sorry, guys. I have been in a bad mood for a while and can't seem to snap myself out of it. - Still no reason to take it out on you. I'll try harder.

July 12, 2007 7:56 AM
Vance Remele
Member Since '04

Vance Remele said:

Gloria:::said

My Broker doesn't want to get our name in the industry as trouble makers.  Can you believe this?  I just wonder how many Brokers really do go to bat for their agents....

-----------------------------------------------------

Somehow, I new that was going to be the answer you got knowing were you are at...

There are some brokers that do and will go the distance.

Vance

July 12, 2007 8:23 AM
Yalda Alawi
Member Since '05

Yalda Alawi said:

I ran into the same trouble and my brokers where ready to go to bat for me.  You have a contract, and you are owed a commission.  Would you let a seller slide if they went around your back and dropped you to sell to a buyer?  

It is because we don't enforce our contracts that things like this happen over and over.  You are not the BAD GUY for enforcing a contract.    Don't take actions based on the opinions of other people.

July 13, 2007 10:38 AM
Gloria Losie
Member Since '06

Gloria Losie said:

Yalda:

I tend to agree with you.  Enforce and they will get the message.

July 15, 2007 5:51 PM

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