Signing option agreement on listed property - Posted by Dave (MI)

Posted by Ed Copp (OH) on October 15, 2002 at 20:02:40:

be very careful about advising the seller about his listing contract with the real estate agent, unless of course you are a lawyer.

Signing option agreement on listed property - Posted by Dave (MI)

Posted by Dave (MI) on October 15, 2002 at 10:51:43:

Hello all-

Found a home I’m going to use a straight option on. Property is still listed. It will expire in 3 weeks.

Question:

Can I sign the option agreement now, or will I have to pay the realtors commission, even if the closing takes place after the listing has expired.

Thanks for any input. I’d like to thank everyone who posts on CRE. I’m still a newbie, and have completed my first two flips in the past 40 days. My early success is a direct result of all the great and timely advice found on this website.

Dave (MI)

Re: Signing option agreement on listed property - Posted by StevenS(CPA)

Posted by StevenS(CPA) on October 15, 2002 at 13:39:08:

Dave,

I think any deal you do now on the property will have to include the agent. It really doesn’t matter if you did this directly with the seller or not, the agent is going to want something.

Believe it or not this happens a lot. The agents sits on the house and does nothing but when I buyer comes around they want a piece of the pie. If you’re doing an option you could offer the agent to manage the property for a fee or you could wait for the listing to expire, but that could lead to some other legal troubles if you’re in california. I don’t know about anywhere else.

Re: Signing option agreement on listed property - Posted by Tim Fierro (Tacoma, WA)

Posted by Tim Fierro (Tacoma, WA) on October 15, 2002 at 11:21:33:

Since the seller is most likely the one responsible for the listing fee, you won’t have to worry about it biting you. However, since you are trying to help the seller and the listing fee is breaking the deal, you need to be clear about the written agreement between the agent and the seller. Just because a listing is going to expire, does not mean the agent might not be due a commission for another 6 months; if the original procurring cause was initiated by the agent’s efforts.

If you sign now, the agent will be due a commission in most agreements. Look over the agreement and the answer should be apparent. Look for words relating to if an option is classified as a sale in where a commission is due, and look for expiration dates that says what time periods take place for future commission from original efforts.