Graphic image of a house for sale and a Realtor who showed or previewed the house (person with briefcase)Awhile back, I got an email from someone who’d seen a Silicon Valley house she liked from a real estate agent whom she didn’t like.  She wondered, “do I have to buy the house with the Realtor who showed it to me?”

The answer, of course, is not always clear. It depends on your relationship with the agent.  It may also depend on why you choose to buy the home with someone else’s assistance, if you did so.

(1) Your relationship with the real estate agent

Did you sign a buyer broker agreement with that Realtor? If so, you may owe a commission to her if you buy the home through someone else.

Did you write an offer on that property with the agent? If so, again you may owe a commission to him if you hire someone else to help you purchase it afterwards.

In many cases, there is a verbal contract that you are working with a Silicon Valley real estate professional exclusively. This does “count” too but it may be easier to change your status if it’s a verbal agreement.

(2) Problem agents, problem consumers.  Do you want or need to break the relationship with the Realtor who showed you this or other homes?

Is your agent giving too pushy? Doesn’t seem to know what he or she is doing?  Too hard to reach?  Too busy to really assist you? Or doing something else that you perceive as a “red flag”?  Sometimes agents should be fired.

You most likely can break that agency relationship with a problem agent if it’s a verbal contract only and you haven’t written an offer on the property in question, but you must  clearly tell him or her that you are not going to continue working together and then have a gap in time between then and when you do write an offer on the home (at least a few days, if not a few weeks).  You can break the agency relationship verbally or in an email or both, but it needs to be clear so that there is no misunderstanding. A call or voice mail followed up by an email would be very clear.

You can terminate the agency relationship  very nicely and graciously, of course.   It is not necessary to tell him or her why you are electing to discontinue the relationship, but he or she will certainly wonder so you may nicely share your reasons.  I would just say try to be pleasant and thank the agent for the time spent.

Sometimes there are a few problem consumers working with ill-will who think that they can work with an agent, see a lot of homes, and then simply either go directly to a seller or listing agent or bring in an out of area friend or relative to write up the offer and close the deal.  If a consumer does this not because of a difficulty with the first agent but just in order to save money (or get a rebate) etc., it is possible that the first salesperson will cry “foul!” and press to be paid a commission.  The lawsuit in this case would be what’s called a “procuring cause” lawsuit.  Procuring cause means that the first agent was really the reason why the consumer purchased the home, and therefore is entitled to a commission (which the buyer might be forced to pay if doing a last hour agent switch).

A good example of a procuring cause lawsuit is the case of Jerry Seinfeld, who had to pay his agent $100,000 when he bought a home without her because he could not reach her one day.  Impatience could cost you!

(3) Discussing expectations.

Sometimes Realtors don’t clearly discuss expectations upfront and that can lead to problems all around.  If you are thinking of buying or selling a home, talk to prospective agents about how they work, communicate, make themselves available etc.   There are many commonalities between agents but also many differences.

Some agents will preview everything in sight and show you the best six or seven homes and expect you to choose from their list after one time out. Others may be willing go to twice and show a few more.  (Most consumers do buy a home after seeing less than 15 nationally but here it tends to be a larger number, probably because of our higher price tags.)

Other agents will expect you to find the home on your own and call them when you find the right one.

(4) What do you want? How do you want to be working with an agent?

In most cases, real estate professionals only get paid if there’s a sale and it closes escrow.   Some will request a buyer broker agreement, which is like a listing contract but for a buyer.  Make sure it’s not for too long of a period, and that if you are really unsure there’s a cancellation clause.

There are some other options out there, though, besides the traditional arrangement as to how a real estate professional can be compensated for assisting you with your real estate needs.

Paid consulting (hourly or flat fee) is a newer option that might fit in some cases. For instance, if you think you want help from an agent only up to a point but then want an out of area licensee (friend or relative) to help you write an offer and negotiate the escrow, perhaps an option would be to hire someone to show you homes and prep you for an hourly fee.   (Learn more about consulting by visit the site for the Accredited Consultants in Real Estate, a group to which I belong.)

Another option is to consider teaming up. Perhaps your out of area friend or relative would be willing to either split the escrow OR pay a referral fee as compensation for time and energy spent.

An open discussion with your real estate professional about your wants, needs, hopes and expectations will enable your relationship to be stronger and better, and will be one less area for stress as you take the plunge into home buying.

If you aren’t sure about your situation, I would recommend that you speak with a real estate attorney to get clarification.

 

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Mary Pope-Handy
Realtor
ABR, CIPS, CRS, SRES
Sereno Group Real Estate
214 Los Gatos-Saratoga Rd
Los Gatos, CA 95030
408 204-7673
Mary (at) PopeHandy.com
License# 01153805


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