that is involved here, in addition to state law, as John points out above.
There are certain types of listing agreements (in MA they are called “open listings”) that give the owner the right to continue to sell the property. IF (big word) a sale is generated AND consumated by the owner AND the agent/broker had not shown or caused to have shown the property, then the agent/broker is not entitled to a commission. (You can see why an agent woulf not mention that in a prospective listing appointment.)
If the property owner has signed either an “Exclusive” or “MLS Exclusive” contract, then a commission is generally due. These last two agreements essentially lock out the property owner from selling their own property; they are contractually required to send all prospective purchasers to the listing agent.
As an investor, you may not like that little “bite” in the listing agreement…but it is not illegal.
a tricky situation…seeking advice on Realtor/Broker issue - Posted by Russ Sims
Posted by Russ Sims on March 30, 2000 at 15:51:45:
A prospect of mine placed a FSBO ad on the internet: House didn’t sell so she listed it with an agent. She forgot to cancel the internet ad, and see it and e-mail her, asking if she’d sell to me on a L/O. She’s motivated because they have moved out of town and are paying 2 mortgages. BUT, if she sells to me will she have to pay her listing agents commission? After all, the home will sell as a result of her efforts previous to listing with the brokerage…
Re: a tricky situation…seeking advice on Realtor/Broker issue - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on March 31, 2000 at 15:13:43:
Russ, You are off base on this one when you say “after all the home will sell as a result of her efforts”, when what really has happened here is that she either forgot to cancel her ad, or is trying to find some con artist who will try to skirt the CONTRACT that she signed. She wants to save the commission, and so do you. So what’s new. The real estate broker probably does not want to work for nothing either. The solution is to work legally through the broker and do the best deal that you can. The broker will work hard to get your best deal accepted, that is what he does for a living. Just as an additional comment, you will find more and more that the broker has taken an option or made an outright purchase (if it is a good deal) and then is reselling the property; there is no listing. The reason for this is contained in your post. A lot of people just think it is O.K. to “go around” the broker. It is not, in my opinion…ED
As in the posts above, most listing agreements are Exclusive, so all transfers of the property, FSBO or otherwise, result in a realtor fee.
I work with FSBO’s a lot, and when they’re leary of listing and think one of their prospects is going to come back and buy it (NOT), then in Texas (as a Realtor) I offer them the Named Exclusions addendum. They can list their prior prospects (names and numbers) and if they come back to buy the property within 30 days (my term), I’ll cut the fee to 3% (if the buyer doesn’t use an agent).
If you’re selling your home FSBO, but it’s going nowhere and you want to list, ask your agent if they will agree to this.
In your case, you found her FSBO ad after the listing, so you may have trouble. I would suggest working with the agent to see (since you’re not using an agent on your side of the transaction) if they will take 3% instead of 6% commission. (I’m assuming the percentage.)
Put it this way: If another agent brought a buyer, the listing agent would only receive 1/2 the commission anyway.
If you lease, there should be no commission payable untill you exercise your option. Have the seller check with their agent, but in PA, if the property is sold during the listing period, a commission is due regardless of who procured the buyer. Good luck!