From Jenmam – REAL ESTATE SHOPLIFTING
http://www.jenman.com.au/NewsQuestions1.php?id=113The Problem –
My mother was selling her home and had a contract with a real estate agency. The contract time has now expired. The house has been taken off the market for two weeks.The people that came through the house with the agent have approached her now for a private sale.
The Jenman Thoughts –
What you have described is the real estate version of shop-lifting.If the agent found the buyer and brought the buyer to the home and the buyer buys the home at any time, then the agent is almost certainly entitled to the commission – both legally and ethically.
My thoughts –
I disagree. If you have a fixed term to sell your property and the agent has been unsuccessful in selling the property then you are free to sell it even if the person had viewed the property while it was being marketed with an agent.People change agents and you dont need to pay double commissions. If you sell it, then in my opinion you have no legal or moral obligation to the agent.
Your thoughts please.
If the contract has expired, then the agent had no leg to stand on…. The potential buyer can do as they please….
If Neil Jenman wants to be so idealistic, he can start by donating the millions of dollars he makes each year from his franchising system, to people who can’t afford a home of their own…..
Sounds like Mr. Jenman now is changing his tune to protect his own business first, instead of the consumer….
My oh my, what a tangled web of deceit……………
It depends on what type of authority was signed with the agent. I think you will find if was an exclusive authority, there is a clause that covers this.
Beware! RE agents tend to be a litigious lot over these issues…Jenman is right, they can, and probably will sue!
i reckon the agent has no leg to stand on. why else do you think agents get you to sign a contract stating they have rights on the house for a certain period of time. if the house is sold within that period of time then they shld get the sale. if the time has expired then they shouldnt. its simple – why else have a time bar on the agent contract. if the agent can prove however that the parties deliberatley waited until the time bar had elapsed and then continued on with the sale privatley then they have a case….then the parties wld be profiting by deception.
Aussie
In the exclusive authorities I have seen (REIV Exclusive Authority) the time period only indicates the period of exclusivity.
The rights to commission to are not extinguished by the expiry of the exclusive authority (if agent introduced the buyer to the property)
In fact, I believe the authority(but not exclusive authority) continues, unless terminated in writing, or a another exclusive authority, with a different agent is entered into.
I’m not saying I agree with this, but that’s the way it is.
tks wayne – i didnt know that! the was it works in the trading i do is that circumstances can change in 2 weeks and in fact this might be seen as a new negotitation. so how long can an agent have right to a property then – forever? in the above mentioned scenario cld the 2 parties wait a year and then get together or will the agent still have a case??
Good question, I have pulled out the form from my files and had a look. This is the REIV form, I don’t know about other states.
Commission is due if the property is sold:
3.3 after the expiration of the authority period for to a person introduced to the property within the authority period (whether that introduction was by the agent or by another person) and to whom, as a result of that introduction, the property is sold.
Note that there is no time constraints :o
tks. the interesting words there are ‘as a result of the introduction’. again im not sure how binding this document is and i reckon there are a hundred loopholes you cld find to get out of it.
you cld feasibly buy a property ‘despite the introduction’ rather than buying a property as a ‘result’ of an introduction if you know what i mean.
even though im a novice can u not negotiate the terms of this document?? maybe we shld all start adding clauses stating that if the house is not sold within the period with wch the agent has rights to market the property, then the agent has no claim on commission’ or words to that effect.
might be hard to pass but in jenmans own words – you shld conmtrol the process and not the agent.
>>can u not negotiate the terms of this document?? maybe we shld all start adding clauses stating that if the house is not sold within the period with wch the agent has rights to market the property, then the agent has no claim on commission’ or words to that effect.<<
Good point! I’m sure you can delete or add any clause you like, so long as the you and agent initial the changes. Getting the agent to agree? Hmmmmmmm that could be an interesting negotiation LOL
Originally posted by Pelicaninvestments:If the contract has expired, then the agent had no leg to stand on…. The potential buyer can do as they please….
If Neil Jenman wants to be so idealistic, he can start by donating the millions of dollars he makes each year from his franchising system, to people who can’t afford a home of their own…..
Sounds like Mr. Jenman now is changing his tune to protect his own business first, instead of the consumer….
My oh my, what a tangled web of deceit……………
Little bit bitter Pelican? Starting to lose count on the amount of times you’ve had a go at Jenman. Give it a rest for a while.
Anubis,
Get a life my friend…. [jerry] I’m not bitter, Simply stating my opinion… Nice to see you like to read my postings so much, to count them [blush2]
If Jenman was honest in his writings, then I’d have nothing to be “bitter” ( in your words ) about…..[eh]
No doubt ( and I agree ) Neil Jenman does some good. But he also has his reasons for that… and not all of those reasons are to help people….[dead2]
As long at there is a Jenman posting here portraying him as the new messiah, I will be here to shoot it down….[beady].
Can we keep posts to the topic?
I disagree with Jenman in this case.
If you have a fixed term to sell your property and the agent has been unsuccessful in selling the property then you are free to sell it even if the person had viewed the property while it was being marketed with an agent.
I dont care about his motives. His view on this I disagree with. Your thoughts on this topic.
Yack,
It doesn’t matter what Jenman thinks, or what you or I think.
What matters is the conditions on the authority of sale that the vendor signed.
As far as an opinion…Imagine if the agent was honest, and worked his nuts off trying to flog the house during the contract period. I would be happy to pay the commission in this instance and believe it would only be fair.
On the other hand, we all know that this is relatively rare…
Wayne,
I think if I has a house for sale and the agent was really working hard to sell it….. I would not begrudge him/her commission…
But as you mentioned, how often does this really happen ????
If I was to follow Jenman’s principles, then what is the point of signing a timed agreement ??
Are we saying that If I work as a contractor for a certain period of time, that I can still be paid if my contract has expired ??? I don’t think so….
We cant have our cake and eat it too…..
wayne is just stating what the law says – and yes there needs to be laws protecting agents aswell. but geez it hurts giving them anything especially when they do very little.
My 2 cents worth.. R/E sales agreements have the
extension clauses (ie up to 60- 90days after expiry) to ensure agents can claim commission if a buyer that was introduced during the agency period approaches the vendor to buy after agency expires, witha view to saving/splitting the comm. Some agents use this clause as a de facto agency, or for bullying some vendors.The key is what’s defined as ‘effective cause’ of the sale – most agents believe that introducing a buyer to the property/vendor constitutes effective cause – not necessarily the case at all.
However Yack, in your case I would suggest waiting out the extention clause in the initial agreement just to be sure there can be no claim for comm from the agent down the track – if it was a sizeable amount the agent might think it’s worth a lawsuit.. If you do want/need to sell it prior, try asking the agent for a complete list of those people they introduced during the agency period. (lax agents rarely keep details of buyers) If the buyer is not on the list, they can’t really make a fuss can they?[rolleyesanim]
theloanarranger
great answer loanranger
My understanding is that the agent is entitled to a fee.
I do remember that, many moons ago, we held a deposit on a development site and the sale fell through.
The deposit was refunded and we subsequently found that the developer and the owner had made a deal and a sale took place without us (as a real estate agent) being involved.
We traced the owner who by the time we found out had moved elsewhere, issued court papers and they settled without going to court.
Clealry the vendors must have had legal advice as to where they stood.
Our case was clearcut. we didn’t have to prove that we had introduced the buyer as at one stage we had held a deposit.
.
However, someone mentioned ‘for how long’ (would the real estate agent be entitled to a fee) and that is a really good question.Does anyone know of some court cases regarding that particular question ?.
There is another aspect as well. On the surface it appears as if an agent wouldn’t be entitled to a fee if he didn’t actually accompanied the buyer onto the property.
In other words, if the agent merely gave out the address and doesn’t actually go with the prospect onto the property it can be held that he didn’t actually didn’t introduce the prospect to the property.
However, since my time (1970 or so) the law may well have changed or else the agreement to sell may well have had a clause inserted into it so as to take such instances into account.
Pisces
I may be able to give an answer to this problem.
I am being sued by a real estate agent for commission. He was the first agent, he found a buyer, the buyer backed out after one day. At the end of the contract I notified the agent his services were no longer required. Weeks later the ‘buyer’ contact the first agent to advise she could now buy, however the agent did not respond.
Buyer then saw house for sale through another agent and subsequently bought it.In my opinion the effective cause of sale was the second advert and agent.
I am contesting the first agents claim in the courts, June 4 first hearing.
I am not a lawyer, anyone with a precedence who could give some information?
I will keep you oinformed of the result.
Cheers
BobR I Allen
I’ve never been in your situation Bob, and you have paid a commission. Your issue is should you pay it twice – I think not. Seems as though the REI should sort it out or divvy up the commission.
Many times I have been approached directly by a would be purchaser after being introduced to the property by an agent. The success of my property investing relies on having agents work with me and for that I do not deny them their commission.
If I ever attempted to bypass the agent I think the word would get around pretty quickly and the agents wouldn’t work for me.
“My word is my bond” as the saying goes, and I feel comfortable sleeping at night. The agent has to live as well.
Cheers
Jeff
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