Hopefully last FSBO question

11 Replies

I have an interested party to buy my home. We found them directly, they want to purchase the home.  Elderly buyers, excited, , went to the closest realtor,  and  broker to give us  a contract (they were afraid to leave town without us knowing they were serious:(  In fact, when they entered the office and said they wanted a contract drawn on a house they love, he  (not unusual) asked them if he could take them out to show them some houses.  They said no, they just don't know how to write a contract.  

Next day, realtor/broker called us, etc we said we are not interested in dealing with a realtor at this point, especially since we found our own buyer.   We emailed him and declined, and once again stated we are not working with a realtor at this point. I also didn't share we are already dealing with these clients (none of his business).  In his reply, he was persistent, lied-that they wanted his services.  His contract that was drawn gave same said realtor/broker a 3% commission of the Sales Price. (from  ME-seller)  They were very excited about the house, and received no paperwork (copies) from the realtor.  

So, I suggested to them, that since we are doing a private sale anyway, and we would be getting an attorney, that before they enter a contract with me, they need to ensure they will not be liable for anything from him.   I have zero trust  in this broker/realtor.  I suggested to retain a lawyer to get copies of paperwork and ensure they didn't mistakenly or unknowingly sign any contractual obligation they could be responsible for, and don't realize-after the fact. They are a very nice couple and I don't want them in for a surprise later.   I equate these type of people to m y parents and would be PO if someone pulled this whole mess on them.   I can't tell you how furious I am for them in this whole matter.  

So anyway, same said realtor/broker agreed to sign a "waiver releasing himself from their purchase "but thought he deserved some sort of 'compensation due to the time, advice and writing the contract.'.  I didn't ask them yet what he thought he deserved--for never meeting them, not showing them one house period ever.  But since he originally signed himself at 3% of sales price to start with, he's a shark.  As far as I am concerned he took full advantage of them as a broker/realtor as well as taking advantage because of their age.  They are very grateful to us for making sure  (they never even dreamed of the ramifications), and I don't mind at all for them. I mind because I can't believe people in the industry can get away with this. 

I am disgusted and seriously question all of this. Is this reportable ethically to the NAR? And, if the answer is that I am wrong what would the compensation be that he would be entitled to (from them, ? Would he have been able to bother them for any compensation after the fact had I not suggested this route? I know that there could be transaction fees...but my question is in a case like this what could be 'fair compensation'?

TIA

PS..I should add-  they contacted him about the contract, (after I told then about his email and what he said), and they asked if they owed him anything at all, or anything for his time.  His reply was no.-----I still didn't trust  him scenario-- which is why I suggested them using the lawyer first to 'make sure'.  I was not confident that they signed something and didn't understand it, nor received a copy of it.  Now suddenly, he feels 'owed' by them. 

I would definitely recommend consulting with an attorney for options.

What is puzzling to me, if I’m understanding correctly, is that the realtor wants compensation prior to closing for drafting a purchase contract. There are many, many transactions that unfortunately fall through for numerous reasons and time and effort is put in by multiple parties who do not seek payment when the deal does not close. It does seem odd that this realtor would ask for compensation for the time and effort of drafting a contract.

I would consult an attorney and see if they are able to draft the contract for you, that way there is no need to pay the commission. They should be able to guide you in the right direction.

Please feel free to message me directly if you would like the name of an attorney. Good luck with the sale!

Hi Alexis--Thanks for being so quick to reply.  Yes, we had found an attorney, (for contract, closing) but when they inadvertently made it complicated for themselves, I thought it prudent for them to just make sure they were covered and then we'll proceed.  You are correct---the broker attempted to sign himself up for 3%....for writing a contract.  And yes he now wants to be compensated for time, advice and contract.  Mind you, we are not using his contract.    

I too think it is odd.  He saw them as a cash grab IMO. 

We have an attorney, for the private contract, but their attorney, in speaking to this broker, (to make sure they didn't get hit with a commission charge since to me they didn't really know what they signed..I never trusted it on their behalf), the broker is  feeling he deserves compensation ). As I said, a cash grab, These people want the house so badly..So they agreed to give him something prior to our contract and then he'll sign a waver to release himself from the sale)!!!. 

It may not be a large amount-- they agreed to give him (when I speak to her I will ask  the amount....she just sent me a quick email), but I can't help but see this wrong on all levels...

I mean I can see a realtor who brings a client to a FSBO wanting a commission. It's understood. This was nothing like that, except the buyer got excited or worried I maybe would sell to someone else. IT is a great house, but I gave them my word, and they just got excited.

 He just signed himself up for 3% bc he wrote a contract...that is it. We were having our own contract made up. As I said, they are older, and trusting---Prime prey for this type of shark. 

My main question was: is what he did  really allowable?  Why would he have any hold on them simply bc they wrote a contract for them that was never accepted? He didn't bring them to me, the seller, at all.  It was only when I realized they never got a copy of his contract that I became concerned that they perhaps signed more.... and become his client.  (it is a cash sale).

I know as the seller none of this concerns me.  I could have tuned it out of my head, taken the sale,  and let them deal however the chips may fall, if they did..... But, I trust my gut and I feel he would have squeezed them...and I am not that kind of person. I had to make them aware when I saw what was happening. 

Thank you..I know I am ranting..lol I am just so annoyed and trying to find if allowable. I can't believe there are not rules since it is a license (NAR/ DBPR)??

Good of you to care so much for your buyer. I would feel the same way.

I see this question often. I buy and sell solo all the time. When I first wanted to do that, I went back to the contract I used to buy my property in the 1st place. I assumed you looked at that? Probably a boiler plate MLS realtor PSA available To anyone online? Fill in the blanks? All addenda and disclosures you need to complete available for free? Ask a title co? I don't know FL, but it's there online I'd bet.

When we want to do something on our own, that's awesome and I applaud it.  Now since no research at all has been conducted on like how you bought your house, you've given all realtors another I told you so moment. That's why you need a professional they'll say. Ammo justifying 6%.

So I'm glad but sad.  Right idea, just get creative or at least think back or use google . Good luck with your sale.

:) Thanks Steve..FWIW..I had my license years ago. I lived out of the country a long time so I never kept it up. Didn't really need to. Moreso took the class to learn before I did my own real estate over the past years in multiple countries........So I do know enough to have either written the contract, or minimally looked at my older contracts that I have bought/sold. But... I say let the experts do what they are supposed to,,I'm too busy... I'm not cheap...(not implying anyone else is) but opted to FSBO this time. Any other property I own would have used a realtor.

But, I had my  'ducks in a row' so to speak.  I am very confident all will work out in the end..

However, I don't know the answer to the questions about the ethics/customary compensation about this scenario.  That is not in the textbook so to speak. :) 

:) Thanks Steve..FWIW..I had my license years ago. I lived out of the country a long time so I never kept it up. Didn't really need to. Moreso took the class to learn before I did my own real estate over the past years in multiple countries........So I do know enough to have either written the contract, or minimally looked at my older contracts that I have bought/sold. But... I say let the experts do what they are supposed to,,I'm too busy... I'm not cheap...(not implying anyone else is) but opted to FSBO this time. Any other property I own would have used a realtor.

But, I had my  'ducks in a row' so to speak.  I am very confident all will work out in the end..

However, I don't know the answer to the questions about the ethics/customary compensation about this scenario.  That was not in the textbook so to speak. :) 

@Vanessa Deluca Seems like the buyers are arranging something with the realtor/broker. I'd stay out of it. The less you know, the better. Seriously. If you want to work with the buyers, do it directly. But leave the realtor/broker out of it. Don't communicate with this person. They can work things out amongst themselves if they want; it's not your concern. Good luck! 

Thanks Rachael...No they are 100% not dealing with the broker.  They are sickened by him. They have a lawyer (my suggestion) to make sure the nonsense is done.   They are trying to get rid of the leech. Big lesson for them doing nothing more than walking into an office and asking to write a contract for a house they had seen (mine). .   He's definitely not in this deal from the point of contract onwards. 

Did they sign an "Exclusive Buyer Brokerage Agreement"?

If NO then they should be under no obligation to compensate the agent.

If YES then they MAY be obligated. They need to read the agreement and see what it says. Or they should consult an attorney for a professional opinion.

It sounds like this agent is trying to shake you down for money. If he has a legal case, have him show you - in writing - where you or the buyer owe him money.

Without an Exclusive Buyer's Agent Agreement, I'd say that realtor is out like the fat kid in 5th grade dodge ball!

@Vanessa Deluca It does sound like the agent is trying to get his hooks into you for commission.  I understand what he's trying to do and I even understand why, but if he's not representing the buyers in the purchase, I don't think he has any standing to be looking for compensation from you.

If he actually provided services to the buyers, they may owe him something - but that's on them.

3% of the sale price is very steep for filling in the blanks on a purchase contract.  If that was truly the only thing the agent did for the buyers, it's outrageous.

I don't know whether it rises to the level of an ethical violation though.  Without knowing what arrangement the agent made with the buyers, it's impossible to say.

I will say that when representing a buyer with a FSBO, I will write an offer that spells out in detail the compensation coming to me. If push came to shove, I'd set up a side agreement with the buyers to receive compensation from them directly.

Charlie..Yes that is exactly what he attempted to do  (dig the claws). The joke is he said to me, "the buyers are paying the 3% commission".When I looked at the contract, the selling price he listed was pre-3 % and he tacked on a page that said the SELLER was responsible to him 3%.  This is far from my first real estate deal-not only was he taking them for idiots, he attempted it with me.  He should have said it correctly-  that I am taking the hit. 

I just find it ridiculous for him to even put 3% based on this:

*He had not  showed them one house. He had no relationship with nor were   working with them--had he been...I understand how it works.  They walked in to ask about how they go about writing a contract. (they were excited- I had told them I'll contact them after the weekend and I was sincere...but they were leaving town the next day).

*when they walked in to get info about a contract (which is how it started..simple information bc they had no idea,) he suggested them to write one.   He also put in as least as possible for him to worry about  "(as is-"  meanwhile when we spoke they did ask me if they could get it inspected and I had said of course)...So he just wanted this quick (They are cash and want to be done in about 30 days)

*Had he put a reasonable 1% as a transactional broker, which is what he listed himself. perhaps I would not have been so aggravated.   I should add that the house  in the 630K range. So in essence he signed up for a 20 k bonus for simply writing up a contract- on my buyers.  Gave them ZERO PAPERWORK 

*Had he set up a side agreement, that is up to them. I cannot argue that.   

Apparently, they didn't sign a buyer agent agreement or anything like that.  (confirmed this I suggested to  then an attorney and he found out). As said, he 'feels he deserves some compensation" ...which I'm sure is more like a fee- that they have agreed on. I don't think it is much..but it is the principle of all of this. He spent 20 minutes with them!  

Perhaps I can't do anything or state he was unethical, or report him, but in my business, people use google review and other means.  I normally don't take time to review restaurants, etc..However, after this dust settles I will have to make sure I warm others about him. Especially since there are many elderly people who can run into slime like him. I am all for honest work, and realtors getting commission.  Don't get me wrong.  But if this is the way he operates, I think it is horrible. God knows what he would do to some poor old widow with lots of discretionary income.   Thanks for your  input.  

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