What happens if...

Question

A seller wants to sell their house to you but they had already listed it with an agency?

J Scott · Answer

You can still buy the house, but you'll likely have to deal with the agent during the negotiations (unless the seller insists the agent stay out of it) and the seller will likely still need to pay the agent commission for the sale.

Otherwise, it's the same as no agent involved.

All that said, keep in mind that an agent isn't going to want the seller to sell below market value, as the agent has a fiduciary responsibility to the seller and the agent also wants higher sales price to generate a higher commission.  So, if you're trying to lowball, expect that the agent will do their best to get in the way.

Bryan Hancock · Answer

How was the property found?

David Niles · Answer

Broker more then likely wouldnt pursue it but does that make it ok to screw them out of their money? No.  If the buyer found the property through street sign, ML, newspaper ad etc, pay the broker, period.

Rob K. · Answer

Bill is right. The broker would get a lot of bad press if he or she sued for the commission, even if they are entitled to it.

Bill Gulley · Answer

Rob, you're right, that is the generally accepted method to reserve a buyer. And that should have been done had there been interest shown.

It's not the only angle, as a Broker must be the procuring cause of the sale to be entitled to a commission, contractually and through agency law, that flows through the protection period as well. The broker is require to perform as well.

And, around here, no broker has ever pushed this issue on a residential property to the extent of going to court over it. It's very bad PR for a broker to sue a homeowner, you can imagine someone considering a broker with a reputation of suing their clients over commissions on a deal sold by the owner.

It certainly has been done. I'll agree too,  that Missouri is not Michigan and neither are New York, it's all local. :)

Rob K. · Answer

Bill Gulley Even if the buyer and seller had prior contact, they are not excluded from an exclusive right to sell listing agreement unless the interested party is specifically named in the agreement as an exclusion. Even if the seller wanted to sell the house to a relative, they are paying a commission unless the buyer is excluded. The only way around it is to wait out the listing AND any protection period.

Bill Gulley · Answer

I agree with Rob as far as the side deal. But I said if you can document your contact prior, if so you have a case, if not, you don't.

Rob K. · Answer

If the seller has a contract with a real estate broker, they owe a commission for the sale even if you saw the house before it was listed and expressed an interest in purchasing it. The only way there wouldn't be money due is if you were specifically excluded by name from the listing agreement. Sometimes a seller will tell the broker that they don't want to sign an agreement because they have an interested party and the broker will agree to exclude that party.

In your case, it sounds like you're trying to work a side deal and exclude the broker from the commission.  The seller could ask the broker to do an unconditional withdrawl of the listing. The broker will probably refuse, in which case some cash could be thrown at the broker to make it happen.

Bill Gulley · Answer

Jon is correct! There is another aspect, they can cancel the listing agreement and sell without paying a commission if that broker/agent was not the procuring cause of the sale. If you can document your conversations prior to the agreement or a sign going in the yard the seller can go there. But, if you saw the sign and then approached the seller, that broker/agent is the procuring cause by advertising the property, so pay what is fairly due.

What happens if...

Most Popular Reply