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Old 06-23-2009, 02:50 PM
 
14 posts, read 57,150 times
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Listing agent changed his offer of compensation to buyer's broker prior to presentation of an offer. Offer in MLS was for 2.5% and he informed buyer broker by letter that he was not willing and under no obligation to compensate him as a cooperating broker in this transaction. Buyer then negotiated with Seller in the purchase agreement for the Seller to pay on behalf of the buyer 2.5% of the purchase price at closing. Seller's agent was fully aware of this term in the contract, but told Seller to go ahead and sign and that he would just take buyer's broker to arbitration. He attempted to get the funds at the closing, however, the closing attorney told him that he could not do that per the purchase agreement. He has since filed a request for arbitration claiming entitlement to the compensation that the buyer paid to buyer's broker through the purchase agreement. How does a listing agent who changes their offer of compensation to $0, who makes no cooperating payment to buyer broker, now have legal standing invoke arbitration and claim entitlement to compensation that was contracted first between the buyer and buyer's broker and second between the Buyer and Seller.

kjbrem
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Old 06-23-2009, 02:57 PM
 
Location: Salem, OR
14,934 posts, read 36,662,805 times
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Well first...
1) if the buyer's agent and listing agent are members of the same MLS, he can't change the compensation agreement. It's on there, that is the agreement.
2) If the buyer's agent is NOT a member of the listing agent's MLS, then the listing agent is correct in that they had no agreement to pay the buyer agent and would owe them zero.
3) If the buyer's agent had a buyer agency agreement with the buyer to get a 2.5% commission and the buyer asked the seller to pay that fee on their behalf in the purchase and sale agreement, then they can do so. The buyer's agent compensation becomes a closing cost for the buyer, and is no different than asking the seller to pay $6,000 in closing costs on behalf of the buyer.
4) Based on what you wrote here, the listing agent is in la-la land.
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Old 06-23-2009, 02:59 PM
 
Location: Barrington
59,528 posts, read 40,847,209 times
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My MLS/ Board would bounce this joker on his ear.
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Old 06-23-2009, 03:00 PM
 
Location: Colorado Springs, CO
1,570 posts, read 5,659,182 times
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It sounds like it will come down to the rules of the local board or realtors. In my area if both brokers are members of the local MLS - the rules would prevail. The offer of compensation listed in the MLS listing is a contract between brokers. The listing can be changed but there are specific rules as to when that can happen.
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Old 06-23-2009, 03:44 PM
 
14 posts, read 57,150 times
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Quote:
Originally Posted by MMichelle View Post
It sounds like it will come down to the rules of the local board or realtors. In my area if both brokers are members of the local MLS - the rules would prevail. The offer of compensation listed in the MLS listing is a contract between brokers. The listing can be changed but there are specific rules as to when that can happen.

Our local MLS rules allow for the listing broker to change the offer of compensation prior to an offer to purchase is presented. The listing broker did this by letter prior to buyer broker presented an offer.

kjbrem
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Old 06-23-2009, 03:55 PM
 
14 posts, read 57,150 times
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Quote:
Originally Posted by Silverfall View Post
Well first...
1) if the buyer's agent and listing agent are members of the same MLS, he can't change the compensation agreement. It's on there, that is the agreement.
2) If the buyer's agent is NOT a member of the listing agent's MLS, then the listing agent is correct in that they had no agreement to pay the buyer agent and would owe them zero.
3) If the buyer's agent had a buyer agency agreement with the buyer to get a 2.5% commission and the buyer asked the seller to pay that fee on their behalf in the purchase and sale agreement, then they can do so. The buyer's agent compensation becomes a closing cost for the buyer, and is no different than asking the seller to pay $6,000 in closing costs on behalf of the buyer.
4) Based on what you wrote here, the listing agent is in la-la land.

Facts: Changed offer of compensation to buyer broker on this transaction to $0. Buyer Broker has every right to seek compensation from his own client through the buyer agent agreement and buyer further negotiated that cost in the purchase agreement to be paid for by the Seller. Listing agent paid nothing to the buyer broker, yet has filed arbitration proceedings to claim entitlement to the compensation that was paid to buyer broker from the seller on behalf of the buyer as a negotiated closing cost. And unbelievably a hearing panel awarded him that money. However, arbitration was set aside because respondent was not given due process and a new hearing has been scheduled. The whole process has been corrupt and my board has been favoring the complainant in this matter and partiality to him because he is the chairman of our professional standards committee.

We believed that since he offered $0 compensation and did not pay anything to the buyer broker in this transaction, that his "dispute" was not a dispute defined under Article 17. He is attempting to use the arbitration process to change the terms of a purchase agreement that neither he or the buyer broker are a party to. We attempted to amend the request to include the Buyer and Seller, however, the grievance committee would not allow it. If anybody has any information or governing information from NAR that fits this scenario, I would greatly appreciate it.

kjbrem

I have spent countless hours trying to find the research necessary to defend this action
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Old 06-23-2009, 04:26 PM
 
Location: Salem, OR
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Wow...first our MLS does not allow an entry of $0. It has to be any number greater, so it can be $1 and above. Your MLS allows an entry of $0?

I don't understand how they can award him money that he wasn't a party to? I don't get what is his argument for why he should be awarded the money? Did the buyer agent somehow violate the MLS rules and cause the listing agent damages or something?
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Old 06-23-2009, 07:02 PM
 
14 posts, read 57,150 times
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Originally Posted by Silverfall View Post
Wow...first our MLS does not allow an entry of $0. It has to be any number greater, so it can be $1 and above. Your MLS allows an entry of $0?

I don't understand how they can award him money that he wasn't a party to? I don't get what is his argument for why he should be awarded the money? Did the buyer agent somehow violate the MLS rules and cause the listing agent damages or something?
That's what we don't understand either. How an arbitration panel can change the terms of a purchase agreement? The lawyer who closed this deal said that this is not an issue of procuring cause or a matter of cooperating compensation, as the listing agent changed the offer and didn't pay a cooperating commission. The buyer's agent simply contracted with the buyer for fees and the buyer negotiated for that to be paid by the seller at closing.
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Old 06-23-2009, 07:21 PM
 
Location: Salem, OR
14,934 posts, read 36,662,805 times
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Quote:
Originally Posted by kjbrem View Post
That's what we don't understand either. How an arbitration panel can change the terms of a purchase agreement? The lawyer who closed this deal said that this is not an issue of procuring cause or a matter of cooperating compensation, as the listing agent changed the offer and didn't pay a cooperating commission. The buyer's agent simply contracted with the buyer for fees and the buyer negotiated for that to be paid by the seller at closing.
I am completely stymied by this situation.

Procuring cause and co-op are irrelevant because the listing agent negated that contract.

So it sounds like what will happen is that he will get the award, and the buyer agent will lose MLS privileges because they won't pay the fee to the other agent, and then the buyer broker will have to sue the MLS.

Can you sue the MLS for tortious interference of a contract?

The next question is why did the listing agent negate the compensation offering. Is there a hate-hate relationship going on here?
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Old 06-23-2009, 07:35 PM
 
14 posts, read 57,150 times
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Quote:
Originally Posted by Silverfall View Post
I am completely stymied by this situation.

Procuring cause and co-op are irrelevant because the listing agent negated that contract.

So it sounds like what will happen is that he will get the award, and the buyer agent will lose MLS privileges because they won't pay the fee to the other agent, and then the buyer broker will have to sue the MLS.

Can you sue the MLS for tortious interference of a contract?

The next question is why did the listing agent negate the compensation offering. Is there a hate-hate relationship going on here?
The listing agent negated the compensation offer because he spoke with the buyer's 6 months prior to the first offer being written. Listing agent said that he was procuring cause and would not pay the buyer broker. That is why the buyer negotiated for the buyer broker fee to be paid through the purchase agreement. Buyer broker had done extensive work with the buyer and viewed many pieces of property with them. Buyers informed listing agent that they wanted their own representation and that is why they contracted with the buyer broker. I know this is confusing. Does the fact that the commission was negotiated in the purchase agreement change anything here at all as far as this being an arbitratable issue between the realtors/
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