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Is this legal? I live in Texas and I am in middle of selling my home in Colorado Springs the deposit was taking directly by my realtor by check from the purchaser and now she has informed me that she is taking double what she original agreed to sell the house for, but being I am not in the state its like pulling teeth to get her to write a contract so it has all been verbal agreement unfortanetly, am i being taking advantage of? because now the downpayment for the home she is taking from the purchaser she is taking her money directly and when I confronted her she replied she does not work for free. Not being a broker or invester I did not think it was legal for her to recieve payment from the purchaser but that the checks were to be made out directly to the seller, which is me.
i thought all money transactions were supposed to go through an escrow company. What you explain sounds fishy. You may want to ask your question in the city-data.com mortgage forum. There is a wealth of information and brokers that may be able to give you advise.
In short, she's not allowed to take a payment and deposit it. It's illegal.
You have to have your own agent (I sold my house when I lived in Grand Junction) via my step-brother as I had set him up as a legal person to sign documents for me.
I had to go through a lot of steps in order for him to act as my legal agent (if you will) to accept, sign and accept the money.
Sounds like you have a bit of a shady agent. If you signed, however, documents that give her power of attorney, you are kinda screwed. If that's the case, you need to have documents drawn up NOW that take her out of the situation.
BTW, it's pretty standard for real estate agents to get around a 7% commission.
Is this legal? I live in Texas and I am in middle of selling my home in Colorado Springs the deposit was taking directly by my realtor by check from the purchaser and now she has informed me that she is taking double what she original agreed to sell the house for, but being I am not in the state its like pulling teeth to get her to write a contract so it has all been verbal agreement unfortanetly, am i being taking advantage of? because now the downpayment for the home she is taking from the purchaser she is taking her money directly and when I confronted her she replied she does not work for free. Not being a broker or invester I did not think it was legal for her to recieve payment from the purchaser but that the checks were to be made out directly to the seller, which is me.
Sounds like you have some real trouble brewing.
Here's how the earnest money provision in the Colorado Real Estate Commission standard contract reads:
"Para 4a. Earnest money. The earnest money set forth in this section, in the form of _________ is part payment of the Purchase Price and shall be payable to and held by _____________________ (Earnest Money Holder), in its trust account, on behalf of both seller and buyer..."
The buyer gives the earnest money to the "Earnest Money Holder," normally the listing brokerage firm, and they have to put in in their trust account. But the earnest money, is "part payment of the Purchase Price," not payment of the realtor's commission. The realtor(s)' commission is paid out of the seller's proceeds at closing. Likewise, the selling agent's commission should be stated in the contract you have with the listing agent. The agent does not have the option to arbitrarily increase her commission just because she feels like it. She is not working for free...she is working for the agreed price per the contract.
If you do not have these contracts signed--if you're selling real estate using verbal agreements with any of the parties (realtors, buyers, etc), you are probably headed for a cliff.
I would contact the owner/manager of the listing agent's brokerage firm and detail what is happening. If they can't/won't help, let them know your next call is to the Real Estate Commission. It may also be necessary to retain a real estate attorney.
BTW, it's pretty standard for real estate agents to get around a 7% commission.
The standard in Colorado Springs is 6%, split between the listing and buyer's agent. You can offer an extra kick for the buyer's agent to entice them to bring buyers (becoming more common in this market).
Are you saying that you had a verbal listing agreement? Now you have a buyer that paid earnest money and she is paying herself from the earnest money?
Sounds like you need an attorney... I am not familiar with CO laws because I'm in TX, but it sure sounds like a big no no. Speak first to her broker and try to resolve it that way.
If everything is verbal..the listing agreement, the sale, you have nothing you are obligated to. She can't just take what she wants in either case. If her brokerage is licensed to hold escrow, that has to be held in an escrow account and she is accountable for what it's disbursed for and when. It is illegal for her to do otherwise and to 'take' anything out of the account for herself.
If your listing agreement is in writing then you owe her only so much as stated in the written agreement and that would be at closing...not before. If she's receiving payment from you and the buyer, that needs to be disclosed in writing to all the parties involved in the transaction. If she's accepting payment from the buyer...what is her agency agreement with them and how does that effect you? Is she a dual agent? Is she a buyer's broker and you have no representation? Is he not represented and is paying for no representation? All of that needs to be clarified and revealed.. to ALL parties. Call the broker and find out what is going on. If you aren't happy with what you are hearing (it's possible you are misunderstanding) then call the local real estate board for that area. But. Again...if you have no written contract? You aren't in contract. That would be one of the first things I would address. She has NO right to any funds at any point from anyone if there is no contract.
I sure hope her broker has his E&O insurance up to date.
Is this legal? I live in Texas and I am in middle of selling my home in Colorado Springs the deposit was taking directly by my realtor by check from the purchaser and now she has informed me that she is taking double what she original agreed to sell the house for, but being I am not in the state its like pulling teeth to get her to write a contract so it has all been verbal agreement unfortanetly, am i being taking advantage of? because now the downpayment for the home she is taking from the purchaser she is taking her money directly and when I confronted her she replied she does not work for free. Not being a broker or invester I did not think it was legal for her to recieve payment from the purchaser but that the checks were to be made out directly to the seller, which is me.
I'm afraid I'm having a really hard time following what you're trying to say. However, you mention that you thought checks were made out directly to the seller. When a transaction actually closes then the checks are made out by the closing attorney to the seller and whoever else is receiving proceeds from the sale (seller's and buyer's agent plus anyone else who may be receiving money at that time -- home inspector, etc. and even the buyer if he/she is receiving some kind of allowance).
However, when a buyer writes out an earnest money check as a deposit on a contract, that check is made to either the buyer's broker or the seller's broker for them to hold in an escrow account until the closing. There are strict rules regarding how brokers hold money and when that money can be released from the escrow account. Frequently, at closing, the amount of the broker's commission is actually reduced by the amount of the earnest money that they are already holding in their escrow account, so they keep the money they are already holding and only receive the difference at closing.
It sounds like something fishy could be going on with your agent, but it also sounds like the 2 of you might just be having a miscommunication about the process.
For instance, you say that your agent is now "taking double what she original agreed to sell the house for". What do you mean by that? What was your original understanding and what is she now saying? Most contracts are based on a percentage of the sale price, and generally half of that percentage will go to the seller's agent and half will go to the buyer's agent. If your agent is actually bringing the buyer then she would get both halves of the commission. It wouldn't be more than was originally agreed upon, but she would be getting double what she would have gotten if she was not representing both sides of the transaction.
Without better understanding exactly what you're saying, and without more details about the agreement, I don't think anyone here can tell you whether any improprieties are actually taking place or if it's simply a misunderstanding.
Good luck. I hope it works out.
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