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We were taken by a real estate broker. We started the process to build a home, without the help of any agent, over a year ago. We worked directly with the builder.
But to sell our current home, we enlisted the help of an agent. We signed a listing contract with them. The agent said that if he got in on the buyers agent commission, he would reduce our selling commission. We did not know any better, so said ok. This agent then accompanied us to a few meetings with the builder for our new home, but did not actually do any work for us or on our behalf. He did not initiate a series of events that would cause us to purchase the home, which is my understanding of a procuring agent.
After many months on the market, we terminated our contract with this agent, because we were unhappy with his performance. He was upset, but agreed to terminate and release us from the contract. I just found out that he called our builder and demanded to get his buyer's agent commission, claiming he was our procuring agent. The builder does not have a listing agent, so no commissions are being paid out anyway. We also do not have a buyer's agent contract with the guy.
We were already on the way to purchasing the home when the agent came into the picture. Granted, we played along with his game of him being our buyer's agent, and he is now trying to take advantage of us and make easy money. We trusted the guy, which was clearly a mistake on our part. Help!
From your description, does not sound like the agent will get anywhere unless the builder gives in. Since you do not have a contract with him, you have no obligation to pay. I suggest you discuss the situation with his managing broker if it is causing you concern.
It doesn't matter if he is the procuring cause if no one has a contract to pay him. Procuring cause only applies to MLS listings because agents have an agreement to pay each other if the are the procuring cause for a buyer. If the builder did not have the house on the MLS, then procuring cause is irrelevant.
No buyer agency contract and no MLS listing means the agent doesn't get paid. The fact that he doesn't realize this says it all.
Thanks for the comments. I should have mentioned two important things, not sure if it makes a difference: 1) We are in NC, not sure if the laws are different, and 2) We have not purchased the home yet from the builder, so no contract is yet signed. I assume he is trying to get in on the signed contract.
Thanks for the comments. I should have mentioned two important things, not sure if it makes a difference: 1) We are in NC, not sure if the laws are different, and 2) We have not purchased the home yet from the builder, so no contract is yet signed. I assume he is trying to get in on the signed contract.
But as Silverfall said, if the builder is not offering a commission for the sale, then there is nothing for the agent to claim. It seems very strange that the agent would get involved with your builder purchase if he knew there was no commission offered.
Most builders out here also have a stipulation that the agent must be with the buyer at the first visit to the builder's sales office to get a commission.
Thank you! Over the last many months, it has become clear that our agent knew absolutely nothing about new construction. I suspect he didn't know the builder was not offering commission, and didn't bother to ask.
Thanks for the comments. I should have mentioned two important things, not sure if it makes a difference: 1) We are in NC, not sure if the laws are different, and 2) We have not purchased the home yet from the builder, so no contract is yet signed. I assume he is trying to get in on the signed contract.
But you can't get in on a contract if no one agrees to allow you in. A contract is between two people. In this case you and the builder. Real estate agents are not a party to purchase and sale agreements. Those are between buyers and sellers.
Real estate agents are parties in listing agreements for sellers and buyer agency agreements for buyers. If a real estate agent chooses to volunteer their time on a deal they can do that which is essentially what this agent did. From what you are describing there is no written agreement for this agent to be paid via the builder, via you, or via the MLS. As such, they have no agreement to be paid.
Thank you, Silverfall. You are correct. There is no written agreement of any form, nor any MLS listing. The closest thing is what I described earlier: "We signed a listing contract with them. The agent said that if he got in on the buyers agent commission, he would reduce our selling commission. We did not know any better, so said ok." There was a reference to the reduced commission in that listing contract (i.e., agent to get x% if he gets buyer agent commission on ABC property; otherwise, he gets y%). That listing contract, however, was terminated (and we have the paperwork to prove it). And like I said, we have not signed a contract for ABC property yet.
Now, the listing agent is trying to bully his way into the process by contacting my builder directly and even threatening to take us to court. I find his tactics unprofessional and, frankly, bordering on unethical. I was not sure how common this was or exactly how "procuring cause" was defined.
I have to admit that this whole thing has really made me question the value of buyers agents. But by reading all of the replies here, I can see that I just got one bad apple. I really, really appreciate your feedback, thank you.
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