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A while ago, I had a listing agent show me her listing house (House A). I thought the house was priced too high, so I passed.
After that, I moved on and got myself a buyer's agent who showed me houses and I put in an offer for House B. But the offer did not work out either. I signed the exclusive buying agreement with the agent at the time.
Now the tricky part: House A just dropped price and I want to put in an offer. But the listing agent refused to recognized my current buyer agent because he was not involved in the first place. In this case, can I go ahead and put in the offer without my current buyer agent? Will I get into some kind of legal trouble by doing this (because of the exclusive buying agreement)?
A while ago, I had a listing agent show me her listing house (House A). I thought the house was priced too high, so I passed.
After that, I moved on and got myself a buyer's agent who showed me houses and I put in an offer for House B. But the offer did not work out either. I signed the exclusive buying agreement with the agent at the time.
Now the tricky part: House A just dropped price and I want to put in an offer. But the listing agent refused to recognized my current buyer agent because he was not involved in the first place. In this case, can I go ahead and put in the offer without my current buyer agent? Will I get into some kind of legal trouble by doing this (because of the exclusive buying agreement)?
By the way I live in the state of Pennsylvania.
Assuming that you simply saw this one listing with the listing agent, and didn't have a continuing relationship with her, the listing agent has no reason to "not acknowledge" your choice of buyer agent. Have your new agent put in the offer. Make sure she knows about the first agent (though is sounds like she already knows) and let them deal with who gets paid what. No one can deny your right to be represented by the agent of your choice. The listing agent is being, from the sound of it, both petty and a poor marketing agent for her clients property.
If this becomes a commission issue bring the principal broker into the transaction. An agent can't just "not acknowledge" another agent per most MLS rules. It defies the rules of cooperation which is the purpose of the MLS.
Write the offer with your current agent and tell them about the listing agent. They will handle that problem for you.
I'm not an expert and I'll defer to the agents, but this would seem like one case where procuring cause could actually bite the buyer. If your exclusive representation agreement requires you to pay your agent a commission in the event that your agent can't collect from the listing agent, and the listing agent, based on their role in showing you the house the first time, tries to claim the buyer's agent's 1/2 of the commission, seems like you could potentially be forced to pay two buyer's agent's commissions. Hopefully I'm wrong, but it might be good if the agents would clarify that.
I signed the exclusive buying agreement with the agent at the time.
Your legal agreement is with this agent who, while such contract is in effect, is the only agent who you can work with. There was no business relationship established with the first agent.
The commission would be split as determined by the amount specified on the MLS sheet. Typically it says "bac" (buyer's agent commission) of 3%, 2.5% or a flat fee amount. This would be delivered to your agent at closing by the attorney or closing company. The selling agent has no say on the matter. The only way you'd pay any extra commission is if the stated amount falls below an amount agreed upon in your agency contract. Let me 'splain...
Say the stated commission is a flat fee of $1500 per side. Your contract with the agent has a section that deals with this very thing. Usually we take the amount being offered and leave it at that. However, some agents will get you to agree to make up any difference. This is something dealt with at the signing of the agency contract. Say your agent's minimum is $2000. The selling agent offers less and you agree to make up any difference out of pocket. There is another section that deals with for-sale-by-owner where commission talk is usually a case of push-me, pull-you. That we will fill in with an amount acceptable to us and to you. Why? Regulations and we want to get paid. Let me 'splain since I'm here....
We're both obligated to each other for the length of the agency contract. We work for you for the amounts specified in the contract. If we leave the fsbo box blank by assuming you'll only consider houses listed by agents, we leave ourselves open to not being paid at all. Say you find nothing on the MLS you like but we find you a nice fsbo place. The seller will pay no commission, your contract says you have to pay nothing either for a fsbo. We still by regulation have to work for you.
Your legal agreement is with this agent who, while such contract is in effect, is the only agent who you can work with. There was no business relationship established with the first agent.
Agreed. You had no established relationship with the listing agent.
(Of course the listing agent doesn't want you represented by a buyer's agent, they would get the full commission paid to them otherwise.) There are some shady agents out there unfortunately.
I sat in the Professional Standards and Grievance Committee annual training yesterday for 7 hours. We discuss things just like this, and roll play a lot.
Legally, if you want to move forward and submit an offer, neither agent/broker can prevent you from buying and the seller from selling. They are not allowed to let commission get in the way of the transaction.
Between themselves, they can fight out who gets paid, broker to broker in arbitration or mediation, however they want to handle.
However, Agent #1 has no case. This is clearly procurring cause, and procurring cause is the event that starts an unbroken chain of events that brings the transaction to close. When Agent #1 showed you the house, and the price was wrong, and then you didn't talk with them again, and you went on to find an agent and look at other properties, the chain was broken.
Make sure Agent #2 shows you the house before writing an offer.... but I'm not giving "legal" advice.
I'm just a smidgeon confused. If the offer has not been presented yet, how does agent A know it's you? Have you been speaking with agent A directly? If so, as Austin Willy says, read your contract with agent B carefully and discuss how they are going to handle it if there is a procuring cause case and they lose.
Either way, you have the right to have your offer presented. I don't know about your state but here in Florida the buyer's agent is 'allowed' to present the offer for the first time. You might want to suggest to your agent they get their broker involved from the start.
I'm not an expert and I'll defer to the agents, but this would seem like one case where procuring cause could actually bite the buyer. If your exclusive representation agreement requires you to pay your agent a commission in the event that your agent can't collect from the listing agent, and the listing agent, based on their role in showing you the house the first time, tries to claim the buyer's agent's 1/2 of the commission, seems like you could potentially be forced to pay two buyer's agent's commissions. Hopefully I'm wrong, but it might be good if the agents would clarify that.
This is a good question and honestly not one I had thought of. I don't have a clause in my contract about if the other agent fails to pay me as agreed. I don't think it's fair to hold a third party accountable for a breech of another contract. The MLS co-op is a contract with the other agent.
I would file a claim in small claims court and a grievance with our MLS. I don't think you could hold the buyer accountable for a breech like that.
It's a good question though.
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