From the Legal Hotline: MLS Offers
We sometimes get calls about whether listing brokers can make offers of compensation listed in the MLS dependent on some other criteria, such as applying only to full-price offers or that a buyer’s agent must accompany the buyer to the first showing. Those arrangements violate MLS rules, which state that offers of compensation must be unconditional except that the cooperating broker must be the procuring cause of the sale. Accompanying the buyer to the first showing may be a factor in determining procuring cause, but a listing broker is prohibited from making the commission conditional on that factor alone.
—David Jones, Associate Counsel
I have been getting lots of calls from buyers that say their realtor told them to call listing agent to view properties and if they like it, their agent will write the offer. There has to be a way other than explaining to the buyer that their realtor needs to do the work to get that commission?
Sure there is. All part of your initial interview with any prospective buyer. Question #1) “Are you working with any other REALTOR or broker at this time?” Delivery of the IABS can be your “excuse” for this question. If they are, direct them back to that REALTOR or broker!
Is that something you tell your clients when you agree to list their home? Do you inform them that you will only show the home to unrepresented buyers, or allow it to be shown through another agent?
Many sellers are of the opinion that you should show the house when requested to any qualified buyer, and worry about the commission and who gets paid for what later – that is essentially your fiduciary duty as a listing agent to your client.
If these shoppers, who are told to go have a look without their agent, want to wait until i have time away from my regular clients, then sure. But i will not put my buyers/sellers on hold while doing so. There is a difference between a client and customer and you can bet i would be speaking with this other agents broker about it.
I put my clients and family first… not my fault they chose a poor results realtor.. If they can’t tour during the week they can attend one of our open houses, if that is inconvenient then we will try to schedule something in, but it certainly will not take priority over any of my team members clients.
I totally agree.
that is a good point. Mark when that happens I do show the buyers my listing but all through the showing I am pointing out what to expect from a great realtor to contrast the unethical way their realtor is behaving and what a disservice they are getting with them. they deserve great service and I show them what that looks like. I hate when unethical realtor behave this way.
Great idea. I just showed one of my listings today because I do want to make sure my listings do get shown. But hadn’t thought of the idea of pointing out bad realtors and we do have a lot invading our high end territory. But they don’t want to drive to get to this high end territory. (about 40 miles.
I’m not sure I understand the question, but if I do my response is: I agree with your client. I don’t list any more, but once upon a time I was more of a listing agent. When I was or occasionally am, I will show my listing to anyone who asks. However, I first ask them if they are working with an agent. Some of them are smart enough to say No so you’ll show them. If the other agent calls me and asks me too for a good reason, I’ll show. After all, I’ve been hired to sell the… Read more »
I had this situation happen to me and the buyer was extremely rude. The buyer’s so-called agent would never answer nor return my calls. When it came time for the buyer’s contractors to give quotes, the buyer acted as though I should meet her schedule as her agent had no intention of fulfilling any of her duties. Apparently, representing the buyer ended with submitting her offer. Long story short, TREC stated I should show or arrange (pay someone) to show any listing at the drop of a hat or I wouldn’t be representing my seller client appropriately. I think it… Read more »
I agree with you. You should have just said if you have a realtor, I am prohibited from helping you. I also think you got mistreated by TREC. I had to go through arbitration through TAR, and it was a bad experience. They were truly a kangaroo court. I made my case per the rules, but still had to pay this other broker part of my commission. On the other hand, I have had a bad experience with some REO listing agents who did not want to answer my calls or provide me information. There are some losers in all… Read more »
Many times these are out of town agents that will do this or non-MLS members. Your local By-laws should address this.
Non-MLS agents cause more work for the listing agent. This is a good reason to have a reduced commission for non-MLS agents in your listing agreement to offset that extra work.
Well I just got fined for stating this in agents comments $100…
Can you elaborate? For stating that non mls agents have a different commission?
I know you’re not addressing me, but the listing agreement allows for space for three types of commission: to the listing broker; to the subagent; and to a non-MLS agent. Many listing agents put 0 for the last two or something less than what listing broker gets. Not good imho because what if the non-MLS realtor is from another board? An agent from another board will call you and ask whether you’re cooperating with non-MLS.
Just explain to them that your clients are happy to open the home to them, but under Texas law they need to have a representative to tour the property and this falls under the responsibility of their realtor. If said realtor is unable or unwilling to do so, then perhaps they should take this in to consideration during the selection/ interviewing process.
If you find the answer let me know.
a buyer can see many homes on their own, but a realtor may advise them into making an offer on one. so just because they went on their own to see a home that doesnt mean that the listing agent proccured it. Listing agent should of compeled them to make an offer at that moment. if a buyers agent after working with them compeles them to make an offer on the same home, that buyers agent is the proccuring cause.
What??? A buyer cannot just “see many homes on their own”…a Realtor must accompany them. It is an inappropriate for the Listing Agent/Broker to show a property to a Buyers Agent client. The Buyers Agent should show the property, that is part of their job! Tammy…my office receives many of the same type of calls you are referring to. Our office does exactly what David Davis recommended & it works. However, buyers become frustrated when hearing this & many times…they do not want to work with that buyers agent any longer because they feel as if the agent is just… Read more »
Michele, I completely agree with you that it is the Buyers Agent’s job & responsibility to show them the property. If they are unable to do so & cannot schedule another time that works for their clients, it’s the Buyers Agent’s responsibility to arrange for another agent within their office/brokerage to show in their place (usually some compensation to this agent is involved). I would NEVER have my buyers ask the listing agent to show, I want my buyers to have as little exposure to the listing agent as possible. Too much risk of buyers mentioning anything that might affect… Read more »
Well by definition “procuring cause” is defined as “the uninterrupted sequence or chain of events that leads to a closing & funding.” So maybe so, maybe no!
The listing agent is always a part of the procuring cause by virtue of the listing. Of course we expect cooperating brokers to help bring us the buyers as well…that’s why they share in the compensation. I’m not sure where buyers can just go look at homes without an agent scheduling and showing them??
So one of our agents showed a (not yet listed) property to family members, who immediately expressed strong interest. The agent, being conscious of potential conflict of interest then told both seller and prospective (family member) buyer that she would be arranging intermediary representation. The seller claimed to have been perfectly happy having the agent represent both sides: the buyer took off and asked another brokerage to represent them. If the transaction goes through, can the other broker really claim to have been the procuring cause and justify being paid in such circumstances? No, our agent did not have a… Read more »
Since a client can choose to accept or reject Intermediary Status, it seems perfectly legit for a customer to choose to be represented by another broker to avoid it. As you pointed out, they weren’t under any agreement.
Same thing happened to me then the buyer used her friend from college to draw up the contract…yep they can do it…it woukd take to much to argue against the buyer…any other better offers?
Without a signed listing AND a signed buyer rep agreement, you CANNOT do intermediary .
Your perspective is all Austin! I am a rural Realtor in Lockhart and I always post that if the other agent does not come with their clients at every showing, that the commission will be decreased based on the experience we have had of other agents simply not being willing to drive here, just wanting us to do all their work for them, then they write it up at the last minute and expect full compensation as if they had done their due diligence. Please re- think your position from the broader perspective.
I agree with Dave. Then the buyer’s agent doesn’t or can’t come to inspections, appraisals, don’t know surveyors to call. You end up doing all the work and give 1/2 your money away!
We also have a number of agents who tell their specific culture of clientele to tour homes with other agents or the listing agent and promise if they use them to write the contract and procure the house they will give 50-80% commission back to the buyer. These are typically agents that have well paying jobs and travel for work.. but buyers are listening to them, they receive no advise or market expertise, tour homes with a dozen or more agent spending their time and then ask another brokerage to write the contract with zero time investment in order to… Read more »
Is all of this under the assumption that the buyer has signed the Buyers representation agreement? If the buyer has not signed this doc can the agent that has contact with the buyer actually claim any compensation if the buyers decides to enter the deal unrepresented?
Only if the buyer uses you to write up the offer and you get both buyer and seller to agree
I agree with Dave also. I am a rural Realtor and I have driven over 2000 miles with a client to show them homes from Floresville to La Vernia to Seguin to Canyon Lake. They had specific needs. I would have never allowed my clients to meet with a listing agent. Talk about what conversation would have gone on while viewing with a listing agent……. Not to mention that I have hear San Antonio agents complain about driving to Floresville. Really, it is a 25 mile drive for many of the properties. Not to mention they don’t know an aerobic… Read more »
Faye trec just fined me $100 for saying commission would be lower if listing agent show home in agent remarks…never knew this was against policy…
Faye Taylor, I see the same thing up here by FT Hood, Highland Lakes and Austin realtors. Then to have a buyers agent broker call me about it……….. wow. I agree that ,our listing agreement should take precedence over the standard MLS verbiage of equal pay….. want equal pay, do equal work. Throw in minerals, grass leases, timber, easements and ect……
I agree with Dave. Out of town agents will not drive out to the rural areas to show the properties. We show them several properties, then they want to think about writing an offer and a complete stranger writes up the offer expecting to be paid their full commission. I don’t mind sharing commission, I just want them to do their part. Most often, the out of town agents do not show up for inspections, to meet contractors, or anything else and expect to be paid for a whole job. There is no other employment, where you can only do… Read more »
ditto to above
I thought that was all cool to…just got a $100 fine from TREC for verbage in agent comments…just saying!!!
Have you ever read your mls rules?
And that, Dave Mills, is the “gist” of this article. A co-brokerage fee posted on MLS is always unconditional. You can compensate whatever you want if the property is not on MLS.
Richard Weeks, yes sir I have. If there can be a “buyer agent bonus” …. is that not conditional?
I have an offer on one right now that conditions it on my making the first showing. First, it doesn’t need showing 1/as it is unimproved and 2/my client called me to start negotiations when he saw the sign go up. Her sign or listing is not a procuring cause to address an earlier statement. To address yours – why do you wan to punish an agent who just might have The buyer for your property? Are you willing to be on market until the next offer comes along, ie do you get daily, weekly offers for this property. What… Read more »
Dave Mills, I agree. There are many: ABOR, CENTX and HIGHLAND LAKES mls realtors that DO NOT show up…. then expect and demand a full commission. If you have a client and don’t want to “drive that far” or “didn’t realize it was that far out”; send a referral. Being a small town; a hour from Austin, we have great issue with agents not being at showings/// especially the initial showing. If I can give a “buyers agent bonus” why cant i reserve the right for conditional commissions for not: 1 showing your “clients”, 2 Agents not ever stepping foot… Read more »
Then why are builders allowed to do this in their advertising? Many builders have signs on their doors and spec homes that if an agent does not personally tour the home with the client then no commission will be paid. Regardless of our buyer rep agreements or previous communication and appointment setting with said builder, I’ve had many combat my team and refuse to pay commissions.
If your client says they had buyer agent then they have to pay you! They are ignorant!
That’s because builders don’t have a real estate license to risk so they don’t have to cooperate. They also are allowed to hire and prefer sales people with no license for the same reason. Builders will also make a new sales hire give up their licenses if they have one in order to work for them.
The “offer of compensation” is conditional upon “procuring cause”. The listing broker can withhold compensation if he/she believes that the buyer’s agent was not the procuring cause. From a mediation experience, with another broker, I have learned that the agent who shows the property to the buyer first, is the procuring cause. If you want to fight that long, established policy, good luck.
I have to weigh in on some of these comments. If you are the listing agent, you have a fiduciary duty to get that house sold. Either way, if someone requests to view it, show it to them. You never know what the situation is. I read one comment where the buyers were rude because their agent wouldn’t answer. Suck it up buttercup. Here’s a real life scenario that happened to our team not too long ago: buyers called me about my listing and wanted to see it, we promptly had someone out there to show it to them and… Read more »
That is why you ask “Are you working with a Realtor?” “Have you signed a buyers rep agreement?” IF that answer is one where they have no representation, I would feel more comfortable showing the listing. I am not saying that I have turned down showing my listings, I am just saying that I don’t have a problem with an agent stating that reduced commission on an agent not accompanying a client. Any agent who has called me and explained that they could not show and asked me to do so, I have happily done. We need to treat each… Read more »
You don’t need a buyers agreement to be the buyers agent. Also if a buyer signs that agreement they can break that agreement when ever. All they need to say they have an agent.
From a listing agent perspective, this is a GREAT answer Andrew! From a buyers agent perspective, your answer is also a great explanation of why you don’t have your buyer see the property through the listing agent…..if you’re not doing your job as a buyers agent & showing it to them, or arranging/paying another agent within your office that you trust to show in your place if you’re unable…..your buyer may jump ship because you’re not working for them like you should be!
Andrew I agreed! That’s the way to do business, make the sale witch is the ultimate sellers and buyer purpose, buyer and sellers don’t care who does what and how, they need results that’s it and Time is Of Essence, you go out there meet those buyers, teach them and impress instead of nagging and complain they become your clients and not costumers anymore. And the non MLS agents I pay same, true most of the times I ll do the extra work but I see it in a positive way My sellers property GOT SOLD!
Andrew Lake, that is our take on it as well. Until the same “brokerage” does it several times…. then its old.
Every time I see in MLS listing in private remarks from a listing agent “If Listing Broker shows your listing the commission will be 1% or 2% less), I print it, file an MLS complaint, Ethics Complaint (both you can do anonymously) and send a copy to the Sellers with a note asking them if they knew how lazy their Listing Broker was and that their Listing Brokers fiduciary duty was to sell their house to whoever and whenever. READ THE REALTOR CODE OF ETHICS and your Buyers Representation Agreements. STOP BEING STUPID, because when the Seller’s get an attorney… Read more »
I wish you would have posted under you name. You are 100% right on.
And that, Mr. Hard-Working Realtor, crosses the ethics line just as badly as pawning off your buyers on the listing agents. I assume you do that anonymously too, Reaching out to someone else’s seller.
BOOM! That just blew up in your face Mr. Hard Working Realtor.
Jarod, I agree.
I always show my listings whether they have a realtor or not. It’s in the best interest of my listing client. Remember who you are working for.
How about…. the Listing Agent’s fiduciary duty is to not expose the Seller to a potential lawsuit from a Buyer that, after closing, thinks that the Listing Agent that “took care of him” in an intermediary situation with appointments, did not represent him properly and was more interested in making the full 6% commission in-house. I have seen a mock trial like this in a Legal Class. Every Agent in that class room said “Guilty”. A TREC investicgator was also present and revealed that most lawsuits in residential cases were Buyers that felt they were not properly represented. In most… Read more »
Local board do nothing to enforce this rule. I just sent a list of 190 properties which contained a condition of paying a commission. I can assure you nothing will be done.
You’re wrong. This issue is one that Metrotex addresses With as little as a phone call, every time.
Wow, hot topic with lots of interaction. I am hearing a lot of rural agents complaining about the out-of-town agents. Keep in mind that if these agents are not on your MLS, you don’t have to pay them, based on what is in your listing agreement. However, if I were a listing agent on a rural property with acreage, I would want to meet the buyers and their agent at the property every time. There are many intricacies with rural properties, that only the listing agent would know. Boundaries, water rights, mineral rights, Location of septic and utilities, property history,… Read more »
Jarod Marcus, so you thing the “listing agreement” should have verbiage in it to address “non-present representation”?
Jarod, we are rural but are in the SABOR MLS due to our location. Our price point is much higher than the average SABOR price point so SA agents will break their necks to show in our area. The problem is most don’t know a septic from a hole in the ground. 80% of our homes are on septic and rural water. But while I can educate them no one can help their client when they whine about driving so far to deliver EM and option checks or do inspections, etc. And whine most of them do. I called a… Read more »
Personally, when I get a call from a buyer that has an agent, I explain to them that it is my office policy to get written permission to interact with that buyer from their broker. I then reach out to that broker and office manager, usually by email, explaining that I’ve been contacted by their client to show them property, and ask for their permission to interact with their client, and for them to please send me a copy of their buyer rep agreement. Most times there isn’t a signed buyer rep agreement. It usually creates one heck of a… Read more »
That is great except that you can not force someone to have a buyers agreement. It is not required to represent someone as their agent. I do like have something in writing from the broker giving permission to interact with their client. That is good policy.
No you cannot force a buyer to sign a buyer rep, but without that buyer rep agreement, the lazy agent has less to stand on in proving that THEY were the procuring cause, especially when you are the agent who showed it.
I typically will go ahead and show the property because many times the buyer is not interested in the property I represent. I always try and show them other houses as well and if possible, I snag them as a new buyer. If they like the house I have listed, then I refer them to an intermediary realtor. It doesn’t come up a lot, but it does irritate me when they call and say “my agent is out of town or can’t show on Sunday”. When that happens I generally have a full schedule and can’t fit them in right… Read more »
I agree with David and Mark. We have a fiduciary responsibility to the Seller. At the same time this should be communicated to the person wanting to see the property. I am fine with an agent calling and asking me if I will show their Client. I am not ok with showing the house , explaining IBS, asking the buyer if they have an agent, then receiving an offer from another agent for the buyer I showed the property to.
And then you have a prominent listing agent listing homes in the median price range at 1% commission to the selling agent. Naturally, getting clients in that price range, there will be a few of that agent’s listings in there.
I was not available when my client needed to see the house and the listing agent showed them the house and my client brought it.. if it was not for the agent not being narrow mine and remember to keep yr eye on the prize it would not happen. If u want to see my listing u give me a chance to sell u a dream.. opportunity.. remember it’s yr client u work for u should do it all u can to sell it..that’s what I want in a n agent. Period
How do you know if the buyer represented by another agent is pre-qualified to purchase a home. Yes you have a fiduciary duty to sell your clients home and that includes bringing qualified buyers rather than wasting their time or exposing their property to someone with bad intentions. If the potential buyer is asking to view the home and is working with an agent then get the agents name and contact them, tell them if they want to do a 25% referral and provide the pre-qualification letter you are willing to show their client the home otherwise they can schedule… Read more »
What about a seller (foreclosure) limiting commission to buyers agent when the listing in mls shows a 3% commission to buyers agent. Yet the foreclosure company after all signed documents 1 day before closing has informed agent the fee is limited to 1000.00 dollars not the 3% commission.
As a listing Broker, I’ve had it with lazy agents that think they deserve full commission when they never even set foot on the property. In a very RARE situation and due to unforeseen circumstances, one may reach out ahead of time and ask another agent for a courtesy showing. But for an agent to knowingly have their client be shown by the listing agent is just plain RUDE. And to expect to earn that extra 1 % is very bold in my opinion. I don’t think TAR and NAR have addressed this issue in order to protect the hard… Read more »
Excuse that I haven’t read all comments, but I’m curious if the association could/would explain why they think it’s a good idea to regulate/legislate/dictate or involve themselves in any way in the subject of commission splits to begin with. I’m sure they’ve given it more thought than I have.
Importan question for btoker. Heard it many times