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Old 10-17-2013, 09:12 AM
 
8 posts, read 16,981 times
Reputation: 12

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Hi,

We are moving to Frisco in November. We are building a new home with a reputed builder. We are from Pennsylvania and completely new to the home building process.

When we were looking for a realtor, back in February, we had a couple of realtors who both promised us a rebate of a portion their sales commision. We found out that this was a legal practice in Texas and selected the realtor we were most comfortable with.

We located the new development, did all the pre-work without the realtor, negotiated the price with the builder. The realtor came with me just once to meet the builder - not for any price negotiation etc.

We are now one month from closing.

Unfortunately there is no written/signed agreement with the realtor himself - it is all verbal,. The realtor's name is mentioned on the Builder's agreement.

We recieved an email from the Realtor saying that the builder is not giving him as much commission as he thought and so he can give us only a portion of the rebate he promised.

What are our options ? Can we swap the realtor's name at this point ? Whom can we approach to complain ?

 
Old 10-17-2013, 09:46 AM
 
177 posts, read 247,800 times
Reputation: 225
I'm thinking you can't change the name if it is already part of the signed contract already. That is pretty crappy if they aren't doing what they told you they would do - you can always call their broker office and express your grievances on this agent.

Verbal agreements can be found to be binding, so you can always try the old "send legal threat letter" letting them know you will hire an attorney to enforce the verbal agreement. Then again, how much is the amount they are not giving you? Is it even worth fighting for or is it just a few hundred dollars? If it were less than $1k it probably isn't worth the hassle, but you should DEFINITELY let their office broker know they failed to live up to their agreement with you.
 
Old 10-17-2013, 10:26 AM
 
8 posts, read 16,981 times
Reputation: 12
Thanks aggieplaya,

The amount the broker is not giving us $4K. This is a well known indepenent realtor.
 
Old 10-17-2013, 10:32 AM
 
Location: Funky town
953 posts, read 1,480,918 times
Reputation: 645
IMO sales contract is the absolute truth if it lists a certain dollar promised to you without any contingency. As far as I can tell, the ball is in your court. I would advise consulting a real-estate attorney to look over you contract because a friend of mine built a home that had a similar cash back commission but his realtor was a nice person. They did not go through this trouble luckily and his realtor had mentioned that one does not need a separate agreement with a realtor for new builds since the builder agreement serves that purpose. Again I am not a realtor or an attorney so take it with a grain of salt but this is what I heard.

Hopefully, Naima, Rakin or some realtor on CD can explain better.

Last edited by frenzyrider; 10-17-2013 at 10:46 AM..
 
Old 10-17-2013, 12:59 PM
 
1,212 posts, read 1,857,612 times
Reputation: 1074
I would tell the agent that you intend to close on the loan, but that you are providing written instructions to the title company not to fund any commissions until this matter is resolved. If the real estate agent was silly enough to put in writing that he promised you one rebate, but then found out his commission was lower than expected, thus he is cutting your rebate, he is toast. Having that email is a smoking gun.
 
Old 10-17-2013, 02:42 PM
 
Location: Dallas/Fort Worth, Texas
4,142 posts, read 13,471,516 times
Reputation: 2556
Unfortunately you have no recourse. I know this for a fact, because there are a couple of Realtors out there that have promised it and the same thing happened to the buyers as you. The builder will not change the agent on the contract. The reason for the agent to get paid is because they were supposed to be the procuring cause for finding the builder, community etc. Commission is supposed to be earned not a hand out.

The agent probably tried to squeeze more money from the builder for him instead of for you (typical commission is 3%)and when the builder said no, he decided to stay quiet and wait until you are ready to close so you are in a bind. Highly unethical IMO.

The title company doesn't take instructions from the buyer about the funding instructions. They only follow the contract terms. If it funds, the monies get disbursed.

Always get any kind of agreement in writing, email or buyer representation agreement, the latter preferably.

The only thing I can think of is filing a complaint with TREC (Texas Real Estate Commission), this won't get you the money but it will help avoid this happening to another person. This industry really needs to be weeded out from jerks like this, but it won't happen unless victims like you don't speak up.

Naima
 
Old 10-17-2013, 02:45 PM
 
Location: Dallas/Fort Worth, Texas
4,142 posts, read 13,471,516 times
Reputation: 2556
Quote:
Originally Posted by frenzyrider View Post
IMO sales contract is the absolute truth if it lists a certain dollar promised to you without any contingency. As far as I can tell, the ball is in your court. I would advise consulting a real-estate attorney to look over you contract because a friend of mine built a home that had a similar cash back commission but his realtor was a nice person. They did not go through this trouble luckily and his realtor had mentioned that one does not need a separate agreement with a realtor for new builds since the builder agreement serves that purpose. Again I am not a realtor or an attorney so take it with a grain of salt but this is what I heard.

Hopefully, Naima, Rakin or some realtor on CD can explain better.
Builder's contracts do not address rebates. Builders stay out of it for this exact same scenario (shady practices) they only say that the agent will get a certain percentage, typically 3%. There is a separate document that the agent has to have with the buyer called a buyer representation agreement that woud address the rebate and the breakdown.

Naima
 
Old 10-17-2013, 03:00 PM
 
Location: Austin
7,191 posts, read 17,771,078 times
Reputation: 9776
Yes, verbal things can be "contract", but only if both parties acknowledge what was really verbal. It'll be your word against his. He might say he promised you $X as long as his commission was $Y, but you would receive $A if he received $B. How can you prove that's not what was said?

Hopefully you have an email or something acknowledging something, otherwise you won't see that money. You might try to talk with his broker. You mentioned he's independent, but that doesn't mean he's the broker.
 
Old 10-17-2013, 03:07 PM
 
Location: Funky town
953 posts, read 1,480,918 times
Reputation: 645
Quote:
Originally Posted by nsumner View Post
Builder's contracts do not address rebates. Builders stay out of it for this exact same scenario (shady practices) they only say that the agent will get a certain percentage, typically 3%. There is a separate document that the agent has to have with the buyer called a buyer representation agreement that woud address the rebate and the breakdown.

Naima
Well, in my friend's case the builder had a real-estate addendum that was signed by the builder, agent and the buyer that clearly described the commission rebate provided by the agent back to the purchaser...

Last edited by frenzyrider; 10-17-2013 at 03:35 PM..
 
Old 10-17-2013, 03:49 PM
 
Location: Prosper
6,268 posts, read 12,897,699 times
Reputation: 9377
The Texas Association of Realtors (TAR) has a Professional Standards Committee. I don't know how much power they actually have, but I know someone on the committee, and when she dealt with a very obnoxious realtor this last year when working to close on my parents new home, she was able to get her fired and forced to switch to a different realty firm, in a different county.

Might be worth reporting your agent to the committee.
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