Brokers & FSBO's

[dumpyjr]

We responded to a mass letter sent by a local real estate agent to homeowners in our neighborhood indicating that they had client(s) that are interested in buying this neighborhood. The agency gave us info. on "comp" sales and we agreed to allow them to show our home to their client(s).

One of the realtors brought a guy over the other day and looked at the house. The next day, after much discussion, we placed a FSBO sign in the yard and have put an ad in the paper to see what sort of potential bites that we could generate on our own. Today, this guy rides by the house and sees the FSBO sign and calls US directly---I think he may be "feeling us out" to see what our relationship is to the real estate agency that brought him over. (Perhaps in order to cut the agent out of the deal???)

During the intial contact with the agency, we were told that "it is customary for them to get 4%" on a sale such as this. (usually 6% with traditional sales) After doing a little research of my own, I NOW know that the commission rate, etc. is just as NEGOTIABLE as anything else in a Real Estate transaction. This was not disclosed as such and I feel that the agency may have misled me a little bit. We have not signed anything or specifically agreed to anything (nor has the "client") with this agent, agency, or made any sort of contact with any other firm. Until the paper comes out in the AM, this particular agency is the only one in town to have the "scoop" (and I assume would have liked to have kept it that way!!)

QUESTION-- What am I legally AND ethically bound to do in this situation?? I am not inclined to shaft anyone and want to do the right thing---NOR do I intend to get taken advantage of---a large sum of $$$ is involved. It could be that I would eventually "officially list" the house with this agency and I do not want to alienate or cheat someone whom I may need to be on MY side in the future. Thank You---BTW, I live in South Carolina.

 

[HomeGuru]

What situation? You have not listed the home yet.

 

[dumpyjr]

Homeguru, thanks for your reply. Am I to infer from your post that since we have not listed the house you believe that the realtor should go "pound salt?" At this point, all the realtor has done was to drive the "client" out to the house. This particular agent had not seen the house and my wife "presented" the home to the client AND to the agent. As I stated, I am just as concerned with the ethical and moral issue. LEGALLY I may not owe anybody anything----but I have to live with my concience forever. Am I being overly sensitive? This is a small town that I probably will live in forever and I don't want to have to hide from anyone when I see them in the grocery store. I don't know the agent personally but she knows who I am and knows the family by virtue of living in a small community.

 

[HomeGuru]

I apologize if I mislead you with my first response.
It may not be as simple as you or I have stated. In general since you have not signed a listing agreement, you do not owe any agent anything. Since I am not privy to the details in the letter, I will presume that there was some agreement as to the motive of agent and yourself. This agreement even if not in writing could be construed as your acceptance to pay the agent a commission if the client that the agent referred to you bought the home. This is based on the fact that the agent sent the marketing letter to you and you agreed to show the home.
The agent is protected to a degree if the client dealt directly with you, based on the doctrine of procurring cause.
Not only do morals and ethics come into play but there is also a legal aspect with respect to possible commissions paid to this agent if that client buys the home directly from you on a FSBO basis.

Are you paying courtesy to brokers?

 

[dumpyjr]

Thanks, homeguru, your second response was much clearer. I believe that the way you presented your follow-up somewhat accurately describes the nature of my problem.

You asked if we were paying "courtesy" to brokers. If the question is "Are we willing to work with other brokers who might call with prospective buyers?" then, yes, we would certainly be willing to work with them. Since I now understand that commissions, terms, etc. are negotiable this would be the FIRST thing that would have to be mutually agreed upon before I would allow them to view the property. If my terms didn't suit the agent then they would be running the risk that their client might find out on their own about my property through the newspaper, friends, neighbors, drive-by's, etc. For the agent, 100% of Zero....is STILL ZERO!! I would assume the same risk that the buyer might not find out about the property and would lose a potential sale. I obviously would not seek the identity of the buyer from the agent for reasons you described earlier. I assume that the key point would be to avoid any misconceptions about "who belongs to whom." If I have no idea as to the identity of a prospective buyer, then I feel that if a buyer inquires and WE get them "on the property" for a showing then we don't owe anyone a dime.
If the agent sets up an appointment and he/she brings the buyer "on the property" then a commission is owed. (the terms of which were sealed when the agent first made contact with me)

Am I on the right track here????

[Edited by dumpyjr on 01-03-2001 at 02:52 PM]

 

[HomeGuru]

Yes you are on the right track.