Louisville Realtor Practices (Prospect, Anchorage, California: for sale, real estate, insurance) - Kentucky (KY) -Jefferson County - City-Data Forum

Cattknap · 03-14-2008, 08:23 AM

As some of you know, we are planning to move to the Louisville area later in the summer. I was speaking to my friend who lives in Prospect and told her that several realtors that I have contacted asking questions about certain houses now routinely send me new listings and sometimes chatty emails. She cautioned me that should a realtor send me a picture of a house that we end up buying through another realtor, that the realtor who sent us pictures could demand some of the commission.

My friend's daughter had this situation happen to her - the daughter lived in So. California but had a realtor in Anchorage - the daughter requested email pictures from the listing agent - the daughter ended up buying the house through her Anchorage realtor. The listing agent sued and Anchorage realtor for part of the commission even though the daughter never even met the listing realtor.

This was a little shocking to me....so by requesting pictures of a home from a listing realtor that we may never actually meet or do business with, we are in fact obligating some of the commision to that realtor should we buy the house? Is this correct or am I missing something?

Thanks in advance for your answers.

kyeric · 03-14-2008, 08:39 AM

Good questions....

My wife and I are relocating to the Highlands via Chicago in the summer. Hope we get some good home prices by then!

Eric

tomocox · 03-14-2008, 08:50 AM

I hope I can answer your questions.

First of all there is the rule of procuring cause. That rule states that a licensee (not all licensees are Realtors) who is responsible for a buyer's discovery of a property has procuring cause and therefore has a right to compensation. This rule exists in some form or another in nearly every state. It is almost impossible to enforce however. A Realtor who does not have a written buyer broker contract with you would have a hard time proving they were the agent with procuring cause. Fpr example with Realtor.com and so many other websites, can you imagine the mess of proof?

If a home seller enters into an Exclusive Right to Sell listing agreement of which 99% of all listing agreements are, the listing broker has the right to 100% of the commission agreed in the contract. The MLS relationship between the listing broker and the selling broker then determines the amount of commission the listing broker will pay the selling broker. For example, a broker lists a property for a __ % commission. When the listing is placed on the local MLS, the listing broker states how much they will pay a "cooperating" broker representing the buyer of this property. This is normally 1/2 of the commission but it can be any portion, even a fixed amount. For example, I have listed a fictious property for 10%, and I will offer a cooperating broker 5% or more or less. If the house is sold to a buyer represented by Jane Doe, Realtor, then I will pay Jane's broker the amount I agreed.

If the seller "goes around" the contract, then the listing broker has full rights to 100% of the commission even though they may have paid another broker outside of the agreement. This can be in addition to any money already paid.

As I have said many times on this site, if you are buying a home that you have found on the internet, I do not recommend that you buy from the listing agent as you will not have full representation, but establish a relationship with a Realtor who will represent you fully as a Buyer Broker.

Cattknap · 03-14-2008, 08:57 AM

Thank you tomocox - you always have great info and I appreciate it...another question for you.

I have made inquiries of a couple of realtors regarding several homes. I called one realtor to ask her a few questions about closing costs, title insurance, etc....she has been a doll and is so nice and very helpful. However she only has had only one house for sale over the last couple of months. Even though I have told her (and written her) specifically about the type of house we are looking for, she sends me tons of new listings that don't have the main features we want (garages in front, 2nd story master, no mature landscaping and in areas we don't want to live in)......so this makes me wonder about her. In her very chatty and sweet emails, she acts as if she is our agent, even though I have made no commitment to her other than to tell her I would look her up once we got to Louisville.

I have since found a realtor that seems to have lots of homes listed (that are consistently sold) in the area that we are looking at - so this is an area that she is familiar with and does business in....this is the realtor I think I want as our realtor but we still don't want to obligate ourselves to any one realtor.

Can you tell we haven't bought a new home in 25 years, LOL.

tomocox · 03-14-2008, 09:04 AM

Again, a Realtor with lots of listings is going to try to sell you a house in their inventory. This is good, but not necessarily in your personal best interest. Listing numbers do not determine the Realtors value to a buyer!!! It is in your best interest to "obligate" yourself to a Realtor who is interested in helping you buy a home, not necessarily interesting in selling you a home they have listed. The Kentucky Real Estate Commission and the Greater Louisville Association of Realtors have a boiler-plate buyer broker agreement which spells out the brokers responsibilities to you the buyer and it does "obligate" you to pay them for working for you. This benefits you by allowing a Realtor to dedicate themselves to you. This does not mean that you will pay more total commission, but generally it means you will actually pay less. For example, a seller agrees to sell their home through a listing broker. In that contract, the listing broker will pay a cooperating broker a portion of the commission. Lets use a $100,000 sale price for this illustration. The seller agrees to pay the listing broker a 6% commission. The listing broker agrees to pay a cooperating broker 3%, but your buyer-broker contract says that you will pay your Realtor 2.5%. Then in this case the listing broker will keep 3% pay your broker 2.5% and you effectively save .5% because you had a contract.

Cattknap · 03-14-2008, 09:15 AM

Good point again. Well, I really do like the realtor with one listing. She seems to be on the ball on everything I have asked her about.

I actually have recently placed 2 calls to the other realtor with all the listings - I've never spoken to her but she has yet to respond to my message on her work and cell phones. She has a listing in Prospect that we like very much but according to the virtual tour, the master bedroom has no windows - I am trying to find out if the bedroom has as least one outside wall so that windows/french doors could be installed.....still no answer.

You've given me another perspective to think about.

johnsonkk · 03-16-2008, 05:29 PM

It works best if you're not wanting to enter into any type of realtor-relationship to be up front and let her/him know. A few years ago we were looking at homes and one realtor in particular showed us a couple of homes. A few weeks later, she called and I mentioned that we just saw a nice house in the paper and we were going to the open house. She said 'great' and 'what time should I meet you there?'. I immediately let her know that we wanted to look at this house on our own and we didn't feel we had entered into a realtor relationship. She thanked us for being up front and honest.

Second, it seems to work best to show potential buyers houses that meet the buyer's desires and not what the relator has in their inventory.

tomocox · 03-16-2008, 08:22 PM

Quote:

Originally Posted by johnsonkk

It works best if you're not wanting to enter into any type of realtor-relationship to be up front and let her/him know. A few years ago we were looking at homes and one realtor in particular showed us a couple of homes. A few weeks later, she called and I mentioned that we just saw a nice house in the paper and we were going to the open house. She said 'great' and 'what time should I meet you there?'. I immediately let her know that we wanted to look at this house on our own and we didn't feel we had entered into a realtor relationship. She thanked us for being up front and honest.

It is important to note that while your approach is very reasonable and certainly acceptable; however, if you are looking at a home listed by a Realtor, you will be advised in writing of how the Realtor will treat you in a Guide to Agency Relations as required by the Kentucky Real Estate Commission. Buyers and sellers must "acknowledge" receipt of this document although it does not in any way obligate any party.