Posted by Brian (UT) on July 23, 2005 at 12:44:12:
When I make a mistake I’ll let you know! In over 40 years of investing I’ve never paid an unearned commission. I’ll continue this conversation after you have completed a course in contract law and agency. Talk to you next year.
Can the broker sue me? - Posted by Anne
Posted by Anne on July 15, 2005 at 14:32:08:
I found a house in NYC on a real estate website, viewed the place with the so-called broker and owner present, made an offer through that broker (denied) and then got interested in a different property for a couple of months. After those couple of months, I decided to follow up on the first property and so I called the owner (whose contact info happened to be listed on the NYC property tax website). Now we have a tenative deal in place, except the seller wants to be held harmless in the event that the broker tries to collect a commission. The seller says that she did not sign any agreement with the broker (and will sign something that states this) and even told him that she was not going to pay any commission and assumed that he would be collecting from the buyer… However, the broker never discussed that with me. Given that nothing was ever signed by any party regarding a commission, can the broker hope to collect anything (he is threatening to sue) just based on the fact that he introduced me to the property and/or if he claims any verbal agreements?
Read through this , - Posted by Frank Chin
Posted by Frank Chin on July 20, 2005 at 08:32:25:
Anne:
Here’s a link for NYS:
http://www.dos.state.ny.us/cnsl/rebcommdue.html
I understand the part about the seller has “no written listing agreement” with the broker. I’m not clear how or why the initial viewing was done as you said “viewed the place with the so-called broker”
This is a vital point. Why would the broker be present unless the broker is there to introduce the buyer with the seller??
Then there is another common practice. Broker introduces buyer to the seller. Seller doesn’t want to pay the commission, and tells the buyer to come back later to talk.
Then the conversation goes like this. Seller says “why don’t I make excuses not to sell till the listing expires”, or “why don’t you wait a few months and come back and wrap this thing up”.
I learned of this first hand some years ago.
A broker was taking me to see a property, which I eventually closed on, but on the way into the house, she started yelling and screaming at a man outside talking to the seller. We went back to her office a few blocks away whereupon she called the seller. When she hung up the phone she explained that the seller admitted that the man he was talking to (the broker bought this man over earlier in the day) asked the seller to make excuses not to sell thru this broker, wait for the lisiting to lapse, and then close the deal cutting the broker out.
I was a little curious, so spoke to my attorney about this. He told me he’s been involved in several lawsuits where this very thing happened. He explained that if the broker had any part in introducing the buyer and the seller, and even if excuses are made in the meantime, but later on the parties came to an agreement, a case can be made that a commission is due.
The very fact that the seller wants you to sign some agreement says to me that there’s somethign fishy.
Frank Chin
Re: Can the broker sue me? - Posted by Ben T
Posted by Ben T on July 17, 2005 at 23:02:20:
In the states I am familiar with a real estate commission cannot be collected without a written agreement. But my guess is that some of the story is missing here.
For instance, you say: “viewed the place with the so-called broker and owner present, made an offer through that broker”. This statement sounds suspiciously like the broker has a relationship with the seller at least, otherwise, why was he there?
In most states that I am familiar with the agent must disclose his agency. You don’t mention this. But one wonders when you made the offer “through” the broker whether anything that you signed provided this disclosure. If it didn’t, there is a very good possibility that the broker was in violation of the agency law in New York.
In fact, the broker should not have been involved in an offer at all without a written agreement with one of the parties, and disclosure to the other.
Most of the time brokers handle this part of their job correctly, because failure to do so can result in the loss of their license. Because of this, I’m going to hazard a guess and say that your understanding of the situation is incorrect. The seller probably had an agreement with the broker. And if I were you, I would recheck the paperwork I signed with the broker to see what may be mentioned about his agency and who he represents.
BT
Re: Can the broker sue me? - Posted by JohnBoy
Posted by JohnBoy on July 17, 2005 at 21:19:09:
If you or the seller never signed anything with the broker then how was it that the broker was even involved when you submitted your first offer through him?
Was the property listed at that time? If so, who was the listing broker? How did you get involved with this broker the first time if you didn’t sign anything and the seller didn’t sign anything?
Re: Can the broker sue me? - Posted by Don Dion
Posted by Don Dion on July 16, 2005 at 13:10:59:
Hmmm Brian and dealmaker might want to re-read the first sentance again.
You signed a contract on the property which was presented by the agent.Yes the broker can take you to court or arbitration and will more often win!
Re: Can the broker sue me? - Posted by Brian (UT)
Posted by Brian (UT) on July 16, 2005 at 24:36:05:
Anne,
I’m not familiar with NY law but in every state I’ve lived in, if the broker had no agreement with you, your not liable for any fee.
The question is whether he had an agreement with the seller that is enforceable. I know she said there wasn’t any so he was advertising a property he didn’t have authority to sell? Anyway, that is between him and the seller, not you and he would have to get a judgement against her, which would not stop you from closing this deal. So it would be a big mistake for you to include a hold-harmless clause to protect the seller, the seller should be protecting you.
In the meantime tell him not to threaten you or the next time you talk will be in front of the real estate commissioner. One last thought, you did sign something, Was there anything in the original offer you submitted that might affect things?
Brian
Re: Can the broker sue me? - Posted by dealmaker
Posted by dealmaker on July 15, 2005 at 22:04:04:
If you didn’t sign anything with the broker, YOU have no liability to him. If the seller didn’t sign anything with him, the seller has no liability.
YOU can’t hold the seller harmless, not can you agree to indemnify the seller against the broker.
BTW, people that THREATEN to sue, don’t. In my experience anyway.
dealmaker
Re: Can the broker sue me? - Posted by Brian (UT)
Posted by Brian (UT) on July 18, 2005 at 24:40:24:
Don
I read it again and nothing has changed. For this broker to sue he needs some kind of authority. A listing with the seller, a written contract with the buyer, or a specific clause of some kind in the offer that is enforceable. For you to assume that he had a valid contract with someone hasn’t been substantiated by the facts as presented. For all we know this guy isn’t even a licensed agent. Fact is the seller says she didn’t sign anything and this guy hasn’t shown her a valid agreement. Again, not her problem. And I think she should know if she signed a buyers broker agreement.
Brian
Re: Can the broker sue me? - Posted by Don Dion
Posted by Don Dion on July 18, 2005 at 09:50:28:
Brian
On line one the buyer states I signed a contract that was rejected by the seller. Once that contract was signed the buyer became a client of the broker for that property. The buyer can be taken to arbitration or filed in court by the broker if he tries to purchase the property without the broker from that point on. Most brokers will opt for arbitration since the cost’s are lower and the process is faster since there are no attorney’s involved.
Re: Can the broker sue me? - Posted by Brian (UT)
Posted by Brian (UT) on July 19, 2005 at 13:33:10:
Don
Again I have to disagree. Based on the limited info we were given in the original post.
(1) The agent had placed an ad. reputable agents don’t place ads on property the don’t control. Either he had a listing with the seller or he didn’t, or he had permission to use someone else’s listing,thus becoming a sub-agent of the seller. The facts as given seem to validate the agent was working for the seller or he was misrepresenting himself, if there wasn’t a valid listing in place. Again, the seller’s problem, not the buyer’s. If the sellers not a liar, the agent is a sleazeball.
(2) Your assuming that the offer created an agency relationship with the buyer. In all the states I’ve lived in Buyer’s agents created that status up front with a separate contract. And all of the standard offer forms I’ve seen in those states did not create a
buyers agency between the a listing agent and a prospective buyer. Why would a listing agent want to create a dual agency? They wouldn’t!
(3)As for procuriing cause, the days are gone when an agent could throw a buyer into a car and show them 700 properties and them collect when the buyer went to another agent and happened to buy one he was shown by the first agent. The courts and the real estate boards have specific requirements that need to be met for an agent to claim procurring cause.
This agent has not demonstrated the satisfaction of those requirements against this buyer. His only chance is if he was working under a valid seller listing, and met the conditions of that agreement. Again that’s the seller’s problem.
(4)If I were the buyer, and this guy threatened me, and couldn’t produce documentation that held me responsible, I would do my best to make him an ex-agent, And rid the real estate sales community of a sleazeball.
Brian
Re: Can the broker sue me? - Posted by Don Dion
Posted by Don Dion on July 19, 2005 at 14:32:39:
Ok
If you can not read then lets not beat this one to death. The original poster stated he had the realtor write and present a contract period!!
Re: Can the broker sue me? - Posted by Brian, (UT)
Posted by Brian, (UT) on July 20, 2005 at 24:25:08:
Don
Yes I can read but I can’t jump to ridiculous conclusions as quick as you. An agent wrote up a purchase offer that was rejected. Wow that must have given him rights over the buyer that most of the agents in this country don’t have. I’m done now, unless I can see all the documentation in this case
based on what was given, your agent gave up on this buyer prospect and did not have a contract with her to be her agent. And your reply did not address the points in my previous post, bet you knocked over the checker board as a kid.
Brian
Re: Can the broker sue me? - Posted by Don Dion
Posted by Don Dion on July 20, 2005 at 07:57:11:
Brian
Actually it did give him rights to the buyer. Once he signs the contract and becomes a client of the broker for that property. You would have to read the contract but in most cases there is wording in the brokers contract which locks the buyer into the broker for 1/2 a year or more on that particular property.
The broker does not need a contract with the seller if he has a buyer that wants to go to contract on an un listed property that is fine since the buyer by signing the offer to purchase becomes a client to the broker.
Once a contract is signed the broker calls the FSBO and informs them they have a contract to present on their property.
It’s alway’s nice to help a newbie out that is un-familar with the contract and the process!
Re: Can the broker sue me? - Posted by Brian (UT)
Posted by Brian (UT) on July 20, 2005 at 10:12:08:
Don
This newbie pulled out 4 contracts on properties I bought thru Realtors in 4 different states. Each had the commission clause after the buyers signatures and before the sellers signatures, thus I agreed to nothing. Their document to enforece a commission was the sellers authorization to sell. Secondly is it your practice to let agents advertise properties you own but don’t have listed. The Realtors I know are bright enough to protect their commissions with written agreements, either a buyer broker agreement or an authorization to sell.
And the written authorizations to sell I’ve signed all had a commission protection clause that if I sold the property to anyone introduced to the property after the listing expired I would owe the commission.
There was a time limit, most of them were 90 days and it also provided the listing agent had to register those names with me in writing.
California courts have ruled a written offer presnted to the seller was sufficient to meet the written registration requirement, but the time limit was still enforceable, Agents can’t hold you liable forever, thus if I were to buy after the period in the listing lapsed the seller would not owe a commission and I could offer a lower price.
Whoops!!! There are checkers all over the floor, what happened?
Brian
Re: Can the broker sue me? - Posted by Don Dion
Posted by Don Dion on July 20, 2005 at 10:25:56:
Good luck with your investing. I can see your an investor that will only learn by your mistakes.