Profile picture for Catspack

Buyer found my house without realtor. Now realtor is suing us for commission.

Heres a quick timeline:

Had open house.  Buyer showed up alone.  Liked house. They found house via yard signs and ad in paper.
Hours later, a realtor shows up. Says he has a client who is interested but won't show us offer UNLESS we sign him a dual agent. We refuse.  He relents. He leaves. Tells us it was the couple who visited earlier. We never sign anything.

He later apologizes, and says it was a silly mistake. We dont' have to sign him as a dual agent. We never sign anything. Presents offer stating he is under contract with buyer.
We counter offer. They counter offer. And I realize.. the buyers do NOT have a contract with this realtor at all. WE NEVER SIGN ANYTHING.

Buyers drop agent. As a FSBO we deal directly with buyer and come to an agreement.

Two weeks later, this agent sues us for 6% commission.

We never signed anything with this agent. Nor have the buyers.  AND the buyers found the house on their own.  

Who wins this case?
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November 15 2013 - US
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Answers (30)

Profile picture for Pasadenan
No Realtor and their broker are going to risk losing their licenses and reputation over "one commission".  If neither party had any agreement nor contract with the agent, file a complaint with the broker, the local board, and the state licensing department.

If that doesn't stop the obnoxious behavior, you can always consider filing claims in Small Claims court and skipping the lawyers.  I haven't checked recently, but I believe it is about $50 to file, for up to a $10k claim.  And each of the affected parties (seller, spouse, buyer...) can file their own claims against each of the offending parties (agent, broker, local board...)

As already mentioned, your lawyer was correct that it will cost way too much for any agent to sue, especially if you end up tying up the agent and broker for the next 20 years in court.  The agent has nothing to gain, and everything to lose.   From what you are stating, it is only a "bluff".
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November 16 2013
Profile picture for mooneymuscle
I was in a similar situation sometime ago except I was the buyer.  He is my deal went down:

I looked at a property FSBO sometime around June 2002, but I thought the property was over priced so I wished the seller luck and he ended up listing it with a local agent. After 6 month and no success, he called me asking if I was still interested.  Of course I was.  

So we created a purchase of sale document (fill in the blank, nothing special) and took it to our local title company and got the ball rolling. The seller did not renew his listing agreement and we closed on the property Feb 2003.  

In April 2003 I get sued by the seller agent claiming lost commission (over 75K).  I never signed anything with this agent and nor did an agent ever show the property to me.  

So I hire the most expensive attorney in the Seattle area as I was preparing for trial, I get repeated calls from the listing agents attorney offering to settle for $50k, I forwarded my lawyers information to the listing agents.  Of course I wasn't settling, not even for a penny.  

At the trial date of in district court, the agents attorney was never paid a dime and quit. She frantically tired to represent herself. Her case took her about 10mins.  The judge had little patiences and dismissed the case and awarded my countersuit for legal fees.  My attorney had spent a lot of time on this case and racked up $7k in his time.  

Of course the agent didn't have any means of paying it, so I took my judgement to a several collection agencies and have destroyed her credit.  It was a lot of fun and entertainment while it lasted.  

It seems like so many people in the real estate profession are extremely shady and "sue happy."  In Washington State it take less than $100 to file a suit.  In this case the agent started her life as a high school dropout, worked as a stripper on Lake City Way, drove a city bus for a while, then she's an expert selling real-estate.

Down the road she eventually lost her licensed, and her broker was fined thousands of dollars.  I have only been paid $2200 out of the judgement.   

At the Sisters:

By the way, I'm not an attorney, just a dumb contractor, but my wife is a licensed attorney in CA, NV, OR, WA.  
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November 16 2013
@mooneymuscle
"Don't be intimidated by these people, because really they no/bad credit or money to pay an attorney so when it comes down to it, they won't make it to court." 

And now you are also giving legal advice without a license to a person who has stated THEY ARE BEING SUED.  Not an idle threat - a reality.  Sure looks like there will be a day in court coming.

The agent does not need to hire an attorney to represent him.  Certainly not in small claims court. 

You have no idea what docs were or were not signed.  Neither does the person being sued.  They have only been told "none" were signed by the buyer. That is hearsay. Think the buyer is going to tell the truth?

Obviously some were signed if an agreement of sale was presented to this seller by the agent. 

The buyer signed the original agreement of sale which was rejected by the seller.  Subsequent to that signed offer the buyer did an end run with the seller and cut the agent out.  That document alone is compelling and proves a point.

It does not take a rocket scientist to put 2 and 2 together.  The seller needs to get an attorney PERIOD.
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November 16 2013
Profile picture for mooneymuscle
Just remember, almost all real estate agents are scum.  They usually were a fast food worker in a previous life and have no professionalism.  

Don't be intimidated by these people, because really they no/bad credit or money to pay an attorney so when it comes down to it, they won't make it to court.  

Screw these people, they don't contribute anything to the deal other than add costs. 

I always try to buy and sell by owner whenever possible.  Everyone wins, buyer and seller
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November 16 2013
I am always reluctant to give definitive answers when presented with a one sided narrative.  There are always 3 sides to every story.  In this instance there are 4.  Seller - Buyer - Agent and what really happened.

There had to be a relationship with the agent if HOURS later a Realtor shows up claiming they are his clients.  He did not find them standing in a parking lot.  They went to him, knew him or had some kind of relationship with him.

Depending on the state if he presented a sales contract to you the buyer also signed a buyers agency with him otherwise he was a dual agent.  In PA we are not permitted to write a contract and represent a buyer unless we have a buyer agency.

If the agent has sued you - hire a real estate attorney to represent you.  I'm surpirsed he has not sued the buyer as well and claimed collusion.
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November 16 2013
The interesting thing about this entire thread and we learned this in real estate school, "I'm sorry, but I can't provide any legal advice as I am not a professional in that field."  The unfortunate part about this he said she said is that it will all come out through the appropriate channels.  Sorry Catspack, but someone will need to look at the finer details of the progression and provide you with an answer that shouldn't be answered in this thread.  

Best of luck.

Steven
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November 15 2013
       If there was no commission offered in the MLS, and there were no fully executed contracts that include a commission, there is nothing due. Read through any and all documents that you signed(that the agent may have), and read the fine print. Remember that in order for the agent to receive commission, it must be a fully executed agreement, and have a clear amount of commission to be paid.
       If the agent were smart, they would only take you to small claims, as it would be too expensive to pay an attorney on this, and might even be bluffing to try to extort money from you. I can't imagine they would pay an attorney for a roughly $20,000 commission and lose probably $10,000-$20,000 for an attorney. Don't pay a penny unless a lawsuit is filed, and if its clear cut that you never signed ANYTHING with a commission, take them all the way to court, and file a complaint on their license.
        I just hope for your sake that you understood the contracts that you signed. Too many people take real estate transactions too lightly. Next time, if you don't use a listing agent, at least pay an attorney a few hundred dollars to review the contracts prior to signing. If you don't understand contracts, find someone who does.
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November 15 2013
Lawyer up and counter sue. (oh and take advice from the internet with a grain of salt ....) 
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November 15 2013
It's best to consult a Real Estate Attroney on this matter however, if you signed an exclusive listing agreement to be represented by the Real Estate Agent depending on the language of the agreement you could lose this case. Best of Wishes.
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November 15 2013
Profile picture for pako42
I am not licensed to give legal advice on this but without any signed contracts or acknowledgement to that effect by you or the buyer, then they have no case. They do have a case if, like you said, the "buyers kicked the agent to the curb"?  That implies they were working the REA and they are may unknowingly be under a buyer exclusive contract for 90, 120 days or whatever was drawn up.

If the property is not sold, then there can be no commission due anyway unless you the seller backed out due to this. Speak with a real estate attorney, just $150 to $300/hour to get it all straight. Maybe they will give you a free initial consultation and you use the attorney to finalize the paperwork during the process for the next buyer.
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November 15 2013
Profile picture for Catspack
SoCal, I totally understand that position. I think that's the case they would present. The realtor suit states that they solely presented and brought the buyer to us, they were the procuring cause for the introduction. This is not true at all. The buyer came on their own and found the house on their own. The realtor later shoehorned himself in but the false claim that he and the buyer had a written users agent contract which was a lie. These kind of people give realtors a bad name unfortunately.
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November 15 2013
Profile picture for SoCal_Engr
"But i will reiterate, nothing was ever signed by us. And I countered, and that counter did have the commission in it.  But I was doing this under the information that I had to because the buyers had a signed agreement with the realtor."

This is part of the confusion. You say "I"ve never signed anything...". But, you also say you countered, and that your counter included the commission. Maybe you never signed the counter, but, if you put the counter offer on paper with the buyer's REA commission in it, well...

I'm not an attorney, but if I were to argue the REA's position...

#1 - The REA was negotiating on the buyer's behalf, with their knowledge and participation, and the buyer's offer as presented by the REA included a commission (again, with the buyer's knowledge).

#2 - Your counter offer, signed by you or not, included an offer of commission to the REA, effectively documenting your recognition of the REA's participation on behalf of the buyer.

The buyer subsequently kicked the REA to the curb, but I'd make a determined argument that, based on #1 and #2, you were not acting in good faith when you continued negotiations with the buyer without the REA.

On one-hand...

a.  The REA is not going to go after the buyer, because the buyer likely doesn't have any ability to pay, even if the REA wins.

b.  If you really want to up-the-ante, notify the REA's broker that if this continues forward and you incur any additional costs, and win, then you will include the broker in any counter-suit, as the REA is working under the broker's license.

But...

If the REA and broker won't fold, you're probably better off working out some resolution. In the long run, win-or-lose, it'll likely be less aggravation and time for you.
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November 15 2013
Profile picture for Catspack
Thanks for all the responses There' still seems to be some misunderstanding.... I've never signed anything. No contracts. No offers. No counter offers. Nothing.
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November 15 2013
As others have said, only an attorney can give you qualified advice about whether you owe a commission. Everything else is just speculation as real estate brokers are neither qualified nor permitted to offer legal advice.

The way you've described it your property was not listed in any multiple listing service, and that you did sign a counter-offer that included a commission but the counter-offer was not accepted, and that therefore there was neither a listing agreement nor a purchase and sale agreement that involved a person with a real estate license.  If that is the case, explain it to your attorney. He or she can provide advice as to whether an oral agreement was created and whether an oral agreement to pay a commission on the transfer of property is valid in your state.
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November 15 2013
It's impossible for us to adjudicate this, even if we did hear the other side of the story.

All the best,
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November 15 2013
Profile picture for sunnyview
I would not pay 6% period. I would make him prove his case in court and make him prove that the agreement was 6%. Short story-- the most you have to lose in court is the 6% and maybe minor attorney's fees. Even with some negotiation and no contract worst case, the agent will likely get less than 6% based on no written agreement on a FSBO sale and the Federal Anti Trust law against price fixing. So offer what you think is fair and move on. 1% sounds generous to me.

Of course, I am stubborn so I would love to face a scumbag like this in court. In fact I'd take myself out to lunch after my win and do everything up to that point to get information to cut off the agent's disability check... but that's just a need for justice talking so please excuse me. You do what you think is right, but I think you may need to consult a different attorney before you decide.
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November 15 2013
Profile picture for wetdawgs
You've reviewed the situation with an attorney.  Apparently you don't agree with your attorney so wish to get a general input from others.    None of us have the details where we can contradict what your attorney said, so, pay your attorney further and enjoy your day in court.

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November 15 2013
Profile picture for Catspack
Wetdawgs,

We never signed anything.  No contracts. No offers. Nothing.
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November 15 2013
Did your adverts say Brokers Welcome, Brokers Protected, Agents Protected, or anything like that? If not, I'd say see em in court. I'm not a lawyer, but I'm experienced in the law. It has been applied to me, and for me, in hundred different ways.

There are a thousand good articles about "procuring cause law", if you just google it.
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November 15 2013
Profile picture for wetdawgs
Ah, it becomes clearer.   If you signed a counter with a 2.5% commission in it, then you are likely to owe the 2.5% commission.   It doesn't matter why you signed it, simply that you signed it and the agent was involved in the negotiations  (I didn't understand that before).   Please take the document with you to an attorney, promptly, or pay the 2.5% commission.
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November 15 2013
Profile picture for sunnyview
"Did i mention that the 'realtor' in question told us he was 'out on disability' and his wife, a fellow realtor, would "wink wink" be the real realtor?"

Wink wink my tiny behind. Fine your lawyer says they may have a case. Ok let's go another way. If you want to minimize your costs instead of going the legal decision route, make it clear to the agent that the FSBO commission that you are offering him is a flat 1% to handle the paperwork only. Since it was a FSBO listing it is not a 6% transaction, period. Tell the agent that you will not pay a commission to anyone else since he handled the so called "negotiations" and made the house visits to press for his commission personally.

Keep everything in writing by email with bcc only. No verbal anything, no unwitnessed/unrecorded conversations. Once you get his John Hancock on a commission agreement or an email proposing you transfer the agreement to his wife due to his disability status turn him in for disability fraud. 
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November 15 2013
Profile picture for Catspack
I should clarify something as this may change people's views.

When the realtor was negotiating on behalf of the buyers, in the agreement was written a 2.5% commission for the sale of the house. There WAS a commission written into these offers.  But i will reiterate, nothing was ever signed by us. And I countered, and that counter did have the commission in it.  But I was doing this under the information that I had to because the buyers had a signed agreement with the realtor.  They of course did not. (The buyers DID sign these offers, I didnt).  

The buyers are not named in the suit.

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November 15 2013
Profile picture for Catspack
Thank you for your answers.

My lawyer believes that they may have a case because they at some point were negotiating with us on behalf of the buyers (regardless of the fact that neither had signed any contracts with the realtor)

Because we were actively dealing with the Realtor at some point, they have a case.

 Its very frustrating.  We like our buyers and up until this point, we were very happy.


...Did i mention that the 'realtor' in question told us he was 'out on disability' and his wife, a fellow realtor, would "wink wink" be the real realtor?
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November 15 2013
Profile picture for sunnyview
"I've spoken to an attorney who says its better to pay that have to pay to go to court."

You need a different attorney then. It is not better to pay a petty bully than go to court when the legal issue is so clear. No agreement for the fee or commission, no contract. No contract, no payment. Simple.

BTW How much are they suing for and what state are you in? In most states, all real estate agreements must be in writing and many real estate Boards/Commissions require that for agent commissions too. You may only need a quality legal consult upfront and then no attorney to go to court if you are on solid legal ground. The agent must prove their legal case. With no written agreement beforehand, their case against you in my state would be lost before they even walked into court.
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November 15 2013
Hello,

I apologize that you are having this type of situation with a Realtor.

I am NOT an attorney, and I'm guessing that "procuring cause" (typically ONLY between Realtors) may be different in different states.

Years ago, I spoke with a local FSBO and they assured me that they would pay our office a commission to bring a buyer to their property if that buyer bought the property. I planned on meeting the buyers, who I had been working with for a couple of months, at the property the next afternoon. Before I met them, they went to the property on their own and purchased it. I had nothing in writing and I did NOT get paid even though I was the one who brought the property to their attention.

I am pretty sure, that a property that is NOT listed with a Realtor, and one that you have NOT signed ANY paperwork with ANYONE to pay a commission or fee to, should be yours to sell as you please.

The problem, of course, is that if a law suit is officially filed against you, it will cost money to defend yourself, even if you are in the right.

The first thing I would do is make sure they have officially and legally filed a lawsuit against you.

The second thing I would do is contact the Realtor's broker at their office and let them in on the situation.

If they don't drop the case I would go to a local real estate office of a national and reputable company and ask to speak with the managing broker.

Take all you paperwork and notes with you and a written synopsis of the facts. They won't give you legal advice, but often they have run into the same, or similar situations, over the years and can offer informed advice.

Then, if you're still not getting the situation resolved, I would contact a real estate attorney in your area (ask the reputable real estate company's managing broker or local agent for a referral if you don't know anyone) and ask for a free initial consultation with all the facts in front of you in a clear written outline.

Good luck!
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November 15 2013
Profile picture for Catspack
I've spoken to an attorney who says its better to pay that have to pay to go to court.  It feels like Mob tactics to me.

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November 15 2013
Profile picture for sunnyview
If you signed nothing and offered no commission in your advertising, I say you win. The agent may have a case with the buyer's if they made an agreement, but any agreement between the buyers and the agent is not your problem as a FSBO seller.

Let the agent sue. I think they'll lose. For some, suing is just a bully negotiation tactic. Don't negotiate just let the lack of any written agreement make your case in court. As the seller, I would not pay this agent a thin dime.
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November 15 2013
Profile picture for wetdawgs
It is time to give an attorney a call. 

From the way you describe it, the agent doesn't have a case.  If the buyers had signed a buyer's agent agreement, then perhaps they owe him some commission.  
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November 15 2013
Profile picture for Catspack
House was always a FSBO.  Never listed with any agent.  Price was in the mid 300's
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November 15 2013
Who knows?

We're you a FSBO all along, or MLS listed, when the open house happened, and later became a FSBO?

If this isn't a rhetorical question, I guess the judge will decide.

How much sales price we talking about?
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November 15 2013
 
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