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I also posted this in the NOVA forum but in case you don't scour that one!! - -
Hi there. Anyone have experience or suggestions on what to do with this?
We have been looking for a home in the area since September. We worked with Redfin who arranged some showings and separately, on our own we went to open houses and called listing agents for specific properties that we drove past and liked. We never signed an agency agreement, a buyers representation agreement, or any type of form with anyone when seeing a listing agent's property.
Now, there is a home we'd like to put an offer on. We found the home because the listing agent, who had shown us one of their other listings earlier this year, sent an unsolicited emaill saying they had a new listing we might like, and they thought of us.
We went to see it, and we do like it.
We called our Redfin agent to initiate the offer. Redfin won't do it unless listing agent releases us from "procuring cause". Redfin says because the listing agent showed us their listing and they were not aware of our representation, they have the right to decide whether to pay the broker who does ultimately represent us.
We immediately sent a note to the listing agent explaining we would like to make an offer and wanted to make sure they knew we were working with Redfin, and that agent would be contacting them shortly.
The listing agent then sent us the following note:
Typically, if we show you one or more of our listings and you don't mention having representation when asked, we have what's called procuring cause. In Virginia, dual representation is permitted if the seller agrees to it in the listing agreement. The owners of both properties have agreed to dual representation. We also typically negotiate a reduced commission in these situations which, in the long run, saves both parties some money. We have spent a significant amount of time with you at xxx.
We believe everyone has a choice who represents you in your purchase of a home. We are certainly disappointed and surprised that you have chosen to have someone else represent you. Especially as that agent has not even shown or even seen the property with you.
We certainly don't want to force the issue but hope that you both will reconsider and allow us to represent you in the purchase. We often do dual agency, especially in xxxx as we are the experts in the neighborhood. It has always been extremely successful for all parties and we have never anyone not be happy with the outcome.
More facts - -when I first contacted the listing agent on October 6 I wrote in an email that we "were not using buyer representation". I asked to see 2 of her listings because we were in the neighborhood that day for open houses. I am not putting an offer in on any of the listings that she had at that time, and she did not have this listing at that time.
So now, Redfin will not submit my offer until the listing agent sends a written note releasing us to do so. Apparently my only option is to agree to pay Redfin myself and the listing agent will keep the entire commission because the SELLER agreed to dual agency.
First I believe the listing agent works for the seller's interest. Second I believe the listing agent works for the seller by showing their listing and not for the buyer. Third, I believe the home is overpriced by about 8% as supported by comparables and an appraisal I had done on my own. For all these reasons, dual agency seems like a profoundly bad idea
Am I stuck? How shall we respond to the note? Thoughts? It seems so bizarre that the listing agent can hold a prospective buyer hostage because they were contacted directly in their capacity as the listing agent with no paperwork, no disclosures, nothing....really??
So you were originally not going to use any representation and used the listing agents time. I assume you were doing this because you thought you could save money. I assume for the same reason you then decided to use Redfin for a rebate. Do I have that right?
Now, I can't speak to VA laws in dual agency and procuring cause but it seems that the listing company and Redfin are in agreement that the listing agent has procuring cause in this instance. With that in mind and assuming you originally weren't using representation b/c you want to save money...
If the listing agent reduces the commission enabling the seller to accept a lower offer, isn't that the same result you desired anyway, except you get a reduced price instead of cash back? If so, why not just go with it? As far as the legal portion, I can't comment on that because I'm familiar with agency laws in VA.
****Note to buyers, if you have a buyers agent, use them to show you the homes!!!!! That's why you hired them!!!!
Is there some reason you didn't ask your Redfin agent to show this (and other) properties? Or was it just "easier" to go with the listing agent? As you found, this leads to complications if you want to maintain separate representation.
Hopefully "your" agent and the listing agent can work out an agreeable compromise.
So now, Redfin will not submit my offer until the listing agent sends a written note releasing us to do so. Apparently my only option is to agree to pay Redfin myself and the listing agent will keep the entire commission because the SELLER agreed to dual agency.
First I believe the listing agent works for the seller's interest. Second I believe the listing agent works for the seller by showing their listing and not for the buyer. Third, I believe the home is overpriced by about 8% as supported by comparables and an appraisal I had done on my own. For all these reasons, dual agency seems like a profoundly bad idea
Am I stuck? How shall we respond to the note? Thoughts? It seems so bizarre that the listing agent can hold a prospective buyer hostage because they were contacted directly in their capacity as the listing agent with no paperwork, no disclosures, nothing....really??
Thanks for your perspective!
Your third option is to agree to pay Redfin yourself and negotiate additional closing costs into your offer to cover their compensation. So if you were going to ask for $6,000 in closing costs and their fee is $4,000 ask for $10k in closing costs. The seller cares about the net. If the other agent isn't willing to reduce their fee and the seller is okay paying it plus your agent it's their loss.
It's all about the net.
Oh...and also...the minute your write up that offer with another agent, even if it doesn't get accepted, you just broke the chain for procuring cause. The chain is very important in that issue.
Maybe I am reading this differently than you are. It seems like they would prefer not to, but they would agree to the release. But ultimately my guess is if you say you are going to walk away they will grant you the release.
Oh...and also...the minute your write up that offer with another agent, even if it doesn't get accepted, you just broke the chain for procuring cause. The chain is very important in that issue.
This is also how it's considered in my state. VA may be different. If you need clarification ask an RE attorney. I'd say it's at least evident that Redfin disagrees or simply doesn't understand agency law. I'd guess they don't understand...but that is just my opinion.
The listing agent then sent us the following note:
Typically, if we show you one or more of our listings and you don't mention having representation when asked, we have what's called procuring cause. In Virginia, dual representation is permitted if the seller agrees to it in the listing agreement. The owners of both properties have agreed to dual representation. We also typically negotiate a reduced commission in these situations which, in the long run, saves both parties some money. We have spent a significant amount of time with you at xxx.
We believe everyone has a choice who represents you in your purchase of a home. We are certainly disappointed and surprised that you have chosen to have someone else represent you. Especially as that agent has not even shown or even seen the property with you.
We certainly don't want to force the issue but hope that you both will reconsider and allow us to represent you in the purchase. We often do dual agency, especially in xxxx as we are the experts in the neighborhood. It has always been extremely successful for all parties and we have never anyone not be happy with the outcome.
Sounds to me like they don't want to, but they will "release" you from having to be represented by them. If I am misreading this and they won't let you out without you paying redfin yourself, I would tell them the only way you are making an offer is if they allow redfin half the commission. If they say no, I would knock on the door of the house and tell the owners that you want to make an offer, but their agent isn't letting you use the representation you want. If the house has been on the market for much time at all, I'm sure the owners will convince the realtor to sign the release.
So you were originally not going to use any representation and used the listing agents time. I assume you were doing this because you thought you could save money. I assume for the same reason you then decided to use Redfin for a rebate. Do I have that right?
Now, I can't speak to VA laws in dual agency and procuring cause but it seems that the listing company and Redfin are in agreement that the listing agent has procuring cause in this instance. With that in mind and assuming you originally weren't using representation b/c you want to save money...
If the listing agent reduces the commission enabling the seller to accept a lower offer, isn't that the same result you desired anyway, except you get a reduced price instead of cash back? If so, why not just go with it? As far as the legal portion, I can't comment on that because I'm familiar with agency laws in VA.
****Note to buyers, if you have a buyers agent, use them to show you the homes!!!!! That's why you hired them!!!!
If you just go with it you may still owe Redfin a commission, right? I wouldn't advise that.
Maybe I am reading this differently than you are. It seems like they would prefer not to, but they would agree to the release. But ultimately my guess is if you say you are going to walk away they will grant you the release.
I was thinking this. If I were the listing agent I would have just done this in the first place and not sent that letter.
This is also how it's considered in my state. VA may be different. If you need clarification ask an RE attorney. I'd say it's at least evident that Redfin disagrees or simply doesn't understand agency law. I'd guess they don't understand...but that is just my opinion.
I'm thinking it is different in my state, because I don't get what is meant by breaking the chain of procuring cause. It seems to me if it can be broken like that it doesn't really exist anyhow.
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