Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Just another reason why the builder reps in Dallas, for probably about 99% of the builders, are not allowed to hold active real estate licenses. What a conflict of interest.
Austin-Willy wrote: "You also want your offer to specify that the seller is required to pay your agent X%."
Interesting. I thought I remembered that the standard contracts in Texas specify who pays the commission, who is entitled to the commission and what the commission amount is. And on closer look, I was only partially right. It states that the listing broker (not the seller) will pay the buyer's broker X% of the sales price.
Why would it be against the code of ethics to say that the seller agrees to pay the buyer's agent?
I think there's some confusion here between the buyer's rep agreement (which does specify that) and the buyer's contract with the seller (which, in the standard contract of sale, doesn't specify that as part of the contract, although page 8, which is, technically, as I understand it, not part of the contract between buyer and seller but the agreement between brokers (and the receipt for the earnest and option money) does specify it so that all parties know what's going on, always a good thing, in my opinion.
I think there's some confusion here between the buyer's rep agreement (which does specify that) and the buyer's contract with the seller (which, in the standard contract of sale, doesn't specify that as part of the contract, although page 8, which is, technically, as I understand it, not part of the contract between buyer and seller but the agreement between brokers (and the receipt for the earnest and option money) does specify it so that all parties know what's going on, always a good thing, in my opinion.
Page 8 is part of the contract. The question from a legal standpoing that I think you're getting at is does it specify any obligations for the buyer or seller. As I mentioned, the commission section says the listing agent will pay the commission, so that's not an obligation of the seller.
My question still is why the Realtor code of ethics would prohibit a Realtor from using a contract that specifies that the seller has to pay a certain commission to the buyer's agent. Any Realtors have a thought about that?
Austin-Willy wrote: "You also want your offer to specify that the seller is required to pay your agent"
Interesting. I thought I remembered that the standard contracts in Texas specify who pays the commission, who is entitled to the commission and what the commission amount is. And on closer look, I was only partially right. It states that the listing broker (not the seller) will pay the buyer's broker X% of the sales price.
Why would it be against the code of ethics to say that the seller agrees to pay the buyer's agent?
In response to your question, A Realtor®, not every licensed real estate agent, is bound to a code of ethics that we have all agreed to uphold. *Per articles 16-16 and 16-17, and generally speaking, buyer brokers or other cooperating brokers should not use the terms of an offer to purchase to dictate, or otherwise modify, the listing broker's offer of compensation to said buyer buyer brokers or other cooperating brokers.
While commissions can be cited in a purchase contract, a Realtor® should not use the contract for altering the listing broker's offer. In the aforementioned case, procuring cause will most likely establish who is entitled to the co-op commission, not an act of forceful intrusion.
*This is not a legal interpretation or advice and should not be construed as such; one should seek council on the interpretation of legal matters.
In response to your question, A Realtor®, not every licensed real estate agent, is bound to a code of ethics that we have all agreed to uphold. *Per articles 16-16 and 16-17, and generally speaking, buyer brokers or other cooperating brokers should not use the terms of an offer to purchase to dictate, or otherwise modify, the listing broker's offer of compensation to said buyer buyer brokers or other cooperating brokers.
While commissions can be cited in a purchase contract, a Realtor® should not use the contract for altering the listing broker's offer. In the aforementioned case, procuring cause will most likely establish who is entitled to the co-op commission, not an act of forceful intrusion.
*This is not a legal interpretation or advice and should not be construed as such; one should seek council on the interpretation of legal matters.
Ok, so then my original suggestion that the offer state that the seller (not the listing agent) pays X% to the buyer's agent would not seem to violate the code of ethics, because it's not altering the listing broker's offer.
Why do you characterize it as forceful intrusion, which sounds so terrible? The buyer should want to make absolutely sure they aren't going to have to pay their agent a commission. The buyer and seller can contract for whatever they want. I really don't see what is offensive about that.
Per Realtor® protocol, there is no predeterminate to establish what party is entitled to the co-op commission; only an actual hearing, known as arbitration, can properly evaluate the full series of events that lead to the consummation of a real estate transaction. The disputing parties may decide on mediation if the disagreement can be amicably resolved.
It is important to note that we have only gotten one side of the story on this thread. We need the testimonies of the agent at the sales center and the other Realtor to really evaluate this case. The act of showing the property, having a signed buyer-broker agreement or making the offer, in and of themselves, do not establish procuring cause. It is the compilation of all events that gives weight to one party over the other.
Per Realtor® protocol, there is no predeterminate to establish what party is entitled to the co-op commission; only an actual hearing, known as arbitration, can properly evaluate the full series of events that lead to the consummation of a real estate transaction. The disputing parties may decide on mediation if the disagreement can be amicably resolved.
It is important to note that we have only gotten one side of the story on this thread. We need the testimonies of the agent at the sales center and the other Realtor to really evaluate this case. The act of showing the property, having a signed buyer-broker agreement or making the offer, in and of themselves, do not establish procuring cause. It is the compilation of all events that gives weight to one party over the other.
Deciding procuring cause has nothing to do with the buyer. It is a dispute between agents that determines who is entitled to a commission split. That is all.
However, if the buyer is obligated to its agent, per the buyer's agreement with its agent, to ensure its agent gets paid a commission, then the buyer may have to pay 3 commissions. That is exactly why the buyer should require the seller to contractually agree to pay the buyer's agent's commission -- because the buyer doesn't care about the technical determination of procuring cause, they want their agent to get a commission, and they want it to come out of the seller's proceeds. The only way to ensure that is to put it in the purchase contract.
Ok, so then my original suggestion that the offer state that the seller (not the listing agent) pays X% to the buyer's agent would not seem to violate the code of ethics, because it's not altering the listing broker's offer.
Why do you characterize it as forceful intrusion, which sounds so terrible? The buyer should want to make absolutely sure they aren't going to have to pay their agent a commission. The buyer and seller can contract for whatever they want. I really don't see what is offensive about that.
Simply because the contract states that Realtor A will be paid at closing from the listing broker's commission does not mean Realtor A has earned the commission per the legal interpretation of procuring cause. The dispute may well survive the closing. In which case, if Realtor A loses his/her arbitration case, then the buyer will owe this Realtor's commission per any buyer-brokerage agreement.
Back to the code of ethics. A Realtor should be apprised to the aforementioned fact and not use the purchase contract to forcefully intrude upon the listing broker's offer of compensation to the procuring party.
I think you're just going to have to make a stink about it at the sales office. Tell them you are interested in a house in their development but that you won't buy unless you are represented by your agent. Tell them that you notified the rep that you already had an agent and you were tricked into signing. You want a termination letter. You also want your offer to specify that the seller is required to pay your agent X%.
Simply because the contract states that Realtor A will be paid at closing from the listing broker's commission does not mean Realtor A has earned the commission per the legal interpretation of procuring cause. The dispute may well survive the closing. In which case, if Realtor A loses his/her arbitration case, then the buyer will owe this Realtor's commission per any buyer-brokerage agreement.
Back to the code of ethics. A Realtor should be apprised to the aforementioned fact and not use the purchase contract to forcefully intrude upon the listing broker's offer of compensation to the procuring party.
SC, I don't think Austin-Willy is suggesting any interference with with the contractual agreement between seller and sellers agents.
He is suggesting that the buyers agent add a clause stating the seller (personally) will pay x% to the buyers agent as part of the deal. Then allowing the seller and sellers agent to duke it out over what seller pays that agent.
It is a very interesting way to "deal" with the problem, and personally I would love to see it done just to stick to that sneaky site agent.
but practically, i think it could create all kinds of problems (some I probably don't even know) and could potentially create a contract that isn't in the best interest of my client.... breaking my fiduciary responsibility.
Shelly
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
