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You described the system.
Of course, you are wrong in your description, but that is what makes trolling, trolling.
Begging the question is not the same as offering any evidence of abuse of consumers.
One time, just once, in the last ten years, please, or withdraw back under the bridge.
If it is unheard of for agents to enforce this term, why have it in the contract?
You seem to be a pretty bright guy, so I'm surprised that you wouldn't know the answer to your question.
The clause is necessary in order to protect the agent if it needs to be enforced. That does not mean it has to be enforced.
Sellers may back out of a transaction for many reasons. It could be that a personal situation has occurred that causes them to back out for awhile. It could be that the market has changed rapidly and they feel they can get a lot more money in a few months, so they make a business decision of taking risk of the buyer suing for specific performance.
In either of these hypothetical cases, the agent would be a fool to press for the commission because he would lose the seller as a client forever and have lot of bad press. The seller would bad mouth the agent to all his friends and family and anyone else who would listen.
The seller is still going to sell the home and the agent will remain his agent. It will cost the agent a little more work, but that doesn't hurt. S/he will gain much more in good PR by helping the seller achieve his goals.
One other point: The listing contract (in AZ) states how much the buyers agent is going to be paid. Since the buyers agent will not be paid if there is no Close of Escrow, then in this event the seller will not owe the buyer a commission. Therefore, the listing agent would only be owed the listing agents portion of the fee.
And remember that all of the material contingencies, such ad inspections, financing, appraisals, contingency of buyer closing escrow on another house, etc., must be fulfilled before the listing agent would be owed a commission. Financing is usually the last material contingency, and that comes just a few days before closing.
If, on the other hand, after all material contingencies are fulfilled, a seller were to say that he has changed his mind about selling, and states that he has decided to stay in the house forever, then the agent should, and probably would, go after his commission, because it has been earned.
In a previous experience we had a buyer bail out a few days before closing because he got cold feet and he demanded his Earnest Money back. Because of extreme pressure from our real estate agent who said the fair thing to do was just give him his money back, we said OK. The Holiday Season started and the market died then the snow started to fall and we had to wait for Spring to melt all the snow. We lost thousands of dollars and my relationship with my wife suffered due to all our fights about what we SHOULD HAVE DONE. Finally 6 months later the home sold for $15K less than our fall offer that fell through.
Funny thing we had four offers at the full sales price the first time we put the home up for sale and picked out the one with the highest Earnest Money offer, best FICO scores and someone who was a very highly paid professional. He ended up not being so professional after all. After our buyer bailed on us, our real estate agent contacted the other three parties who had offered to buy our house. Because quite a bit of time passed waiting for closing, all of them had moved on and bought other homes.
The moral of the story is you never know, and always do a rent back. What if I had moved out expecting the house would close and ended up renting and paying a mortgage at the same time? Or tried to sell in the middle of winter in snowy Minnesota in the months after my original Fall attempted closing?
Exactly my worry. I also read on another thread that an agent recommended that buying a house be contingent on removing an 'ugly' fence, which the sellers did. Maybe another buyer would have seen the fence as a positive factor. Etc., etc. Of course giving back the earnest money in the case of AHomeSeller was a big mistake, but they certainly were messed up by the withdrawal of the 'best' choice buyer.
I'm sure thousands of sales happen every year with no rent back and no issues. To say "always" do a rent back seems a bit silly.
Everyone's circumstances vary. I could afford two homes, but I sure would not like to do it for long. If you cant afford two properties at once, or one property and rent, then it makes sense to require a rent back, or a simultaneous close provision.
You described the system.
Of course, you are wrong in your description, but that is what makes trolling, trolling.
I state a (dirty little) fact about listing contracts and that is trolling? Interesting coming from someone who posted a link to a CD’s poster’s facebook page. Last time I checked, outing a poster’s identity is a violation of CD rules.
Quote:
Begging the question is not the same as offering any evidence of abuse of consumers.
One time, just once, in the last ten years, please, or withdraw back under the bridge
I gave you a direct answer (see below) now how about answering my question:
Quote:
Originally Posted by RE Skeptic
As a seller I have never breached contract so I wouldn't know.
All I know is that it is a common condition in most listing agreements. Seller breaches (walks) and they owe their listing agent the full commission.
Show me one boilerplate state RE Association Listing Agreement that doesnt have this clause. Just one will do.
I state a (dirty little) fact about listing contracts and that is trolling? Interesting coming from someone who posted a link to a CD’s poster’s facebook page. Last time I checked, outing a poster’s identity is a violation of CD rules.
Really?
Obviously, that post was removed. Less obviously, when I look, it says it was removed "By Request," after I made the request with a report that said, IIRC, "TOS Violation? I regret making the post."
We should judge people by how they respond after an error. Do they compound it or try to correct it?
Quote:
Originally Posted by RE Skeptic
I gave you a direct answer (see below) now how about answering my question:
Your "answer" only stipulated that you have no experience in real estate to support your erroneous premise, yet you fail to withdraw the premise.
Your question is only a cavalier denial of your premise. You indicated that there was an issue, were enlightened by Captain Bill, and compound the error.
But, to play along and correct your original erroneous premise that buyer loses fees and costs in case of seller breach...
From the NCAR Form 2-T Standard Offer to Purchase and Contract:
Page 8 of 10
"Section 8 (l) Seller’s Failure to Comply or Breach: If Seller fails to materially comply with any of Seller’s obligations under this Paragraph 8 or Seller materially breaches this Contract, and Buyer elects to terminate this Contract as a result of such failure or breach, then the Earnest Money Deposit and the Due Diligence Fee shall be refunded to Buyer and Seller shall reimburse to Buyer the reasonable costs actually incurred by Buyer in connection with Buyer’s Due Diligence without affecting any other remedies. If legal proceedings are brought by Buyer against Seller to recover the Earnest Money Deposit, the Due Diligence Fee and/or the reasonable costs actually incurred by Buyer in connection with Buyer’s Due Diligence, the prevailing party in the proceeding shall be entitled to recover from the non-prevailing party reasonable attorney fees and court costs incurred in connection with the proceeding."
If I stipulate that commission payment is fairly standard in listing agreements in case of seller breach, will you agree that your original premise regarding buyers losing fees and costs in case of seller breach was not supportable?
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