Re: Agent’s commission - Posted by Kevin (TX)
Posted by Kevin (TX) on December 20, 2000 at 06:03:35:
2 things that are unclear but seem likely from your post are that the agent has been the property manager and that he has an “exclusive right to sell” for 90 days. It also seems you have issues with the agent which is common with tenant/landlord relationships. You are much more interested/emotional/involved with the property than the agent. The agent was hired by the owner to look after his interests, not yours and the “systems” of property management can seem cold to tenants. I’m a property manager and want to give the other agent the benefit of the doubt.
If the property manager is on the ball, he has a management agreement with the owner, in writing, stating he is entitled to a commission should a tenant in the property buy the property. The standard Texas management agreement even has a paragraph specifically addressing it.
If the agent didn’t have such a clause in his management agreement, his “exclusive right to sell” agreement (seperate agreement) should still cover him if you make a deal with the owner within those 90 days - unless the owner has listed you as an exclusion in either agreeement. Chances are good the owner couldn’t care less/didn’t think about excluding you and just wants the agent to sell the house.
As stated in other posts, it comes down to what is in the contract between the agent and owner as to whether the agent gets paid or not. Procuring cause is between the seller and the agents involved. If the seller feels the agent was not procurring cause, it’s for him to work out with the agent.
Procurring cause is not an issue with this deal unless another agent gets involved. If another agent got involved, the two agents would have to work it out between them.
In Texas, procurring cause is considered to be the action that sets into motion a series of events that ends at “closing.” That action is not as simple as putting a sign in the yard. If that were the case, any time someone called to get info from a sign, they would be locked into working with that agent with that property.
So you’ve been in the property? I’ve been in my neighbor’s house and if she lists with another agent and I decide to buy it, I will collect my end of the commission.
Procurring cause here, as I see it, and I’m not an attornery, without a prior written agreement between you and the owner, or your exclusion from the agreements between the agent and seller, would be when you open communications and negotiations. If you go through the listing agent to make the offer, he is procurring cause. If you open communications/negotiations through another agent, that agent is procurring cause. If you go directly to the owner, who’s procurring cause? The listing agent is because of the sign/phone call, if it is an “exclusive right to sell” agreement without any special conditions. You would not have opened those lines of communication/negotiation with the owner, now, and the owner wouldn’t have your offer, if it hadn’t been for that agents’ actions.
I understand you not wanting to pay any more than you have to for the property and feel if you don’t pay a commission, you can get the property for less. I’m sure you also realize the #1 reason people sell their homes without an agent is because they don’t want to pay a commission either and think they can put more money in their pocket. They’re not discounting the sales price for the buyer.
I think you will find the seller not interested in accepting a creative offer until the listing agreement has expired. I say that based on the assumption that the agent is a property manager. Most of the properties I manage that come up for sell only hit the market if the seller wants full price, can get it and can wait for it. Most property managers have databases full of investors and are active investors themselves.
If everything is in order between the agent and seller, you will not be able to go around the agent and “cheat” him out of his commission.
If you really hate this agent, don’t want him to make both sides of the commission or want to be represented in the transaction, you could go to another agent to make the offer. The other agent would participate in the commission, diminishing the commission of the listing agent, but you would have someone representing you in the deal.
You have 2 options, as I see it. Make your offer now and not risk losing the house to another buyer(either through the agent, another agent or directly to the seller - doesn’t matter, commission being paid), or wait until the 90 days are up and go directly to the seller POSSIBLY avoiding the commission.
The owner may feel a sense of loyalty to the agent, want him to handle the transaction and refer it back to him anyway.
Remember the management agreement? The agent may still be entitled to a commission.
With no commission, the owner may not discount the price and, in a sense, you haven’t gained anything but the possibility of losing the house to another buyer.
Making an offer directly to the owner and trying to circumvent the agent, durring the 90 day listing period should not be an option. It would depend on the seller not telling the agent and the agent not finding out about it, which is unlikely. Not to mention it’s just down right unethical.
Another consideration is that if the house doesn’t sell in 90 days, the agent may get an extension for another 90 days.
If you are in a strong market and want the house, I wold make the offer. Who knows, the agent may not be a bad person, may have overlooked you as a potential buyer and may discount his commission to make the deal work.