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Question about a buyer's realtor please.

Hi, I need your help please. I am trying to buy a house. Two months ago I started visiting some houses with a realtor. After this time, I decided to change my realtor. The first one was not sending me complete information about the available houses in the area. The second one is doing a much better job. Now this is the question. One of the houses that I visited with the first realtor had a price decrease, so It became attractive to me. With the first realtor I did not present any offer. Other than just visiting it nothing else happened. Question is if the first realtor can claim a fee or a comission just because he was the first one who showed me that house? Thanks !
  • June 26 2012 - Leesburg
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Answers (14)

Best Answer

It seems to me that the first REALTOR was the procuring cause. 

You do need to discuss it with your current REALTOR as very often cases as this one end up in the Arbitration Hearings and your current Broker needs to know that. 

As for your first REALTOR not sending you "complete information about the available houses in the area," is there a chance that you improved your search or gave different search criteria to the second REALTOR? 

BTW, starting July 1, 2012, in the state of Virginia there is a new law regarding Agency Agreements, including Buyer-Broker Agreements, and all Buyer Agents must sign a Buyer-Broker Agreement in order to be able to represent a Buyer in a real estate transaction. 
Buyers who choose to be un-represented, should be given the Disclosure of Brokerage Agreement for Unrepresented Parties form by the Listing Agent that clearly spells out that the Listing Agent represents the interests of the Seller.
 
  • June 26 2012
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This is very important to discuss with your current REALTOR... and he or she should bring all of the details to their broker for their guidance.  Best of luck!
  • January 29 2013
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Realtors® Standard of Practice, 12.7: "Only REALTORS® who participated in the transaction as the listing broker or cooperating broker (selling broker) may claim to have "sold" the property. Prior to closing, a cooperating broker may post a "sold" sign only with the consent of the listing broker."
It is the practice of Realtors® to define "procuring cause" at the level of being the Selling Broker. It is not the practice of Realtors® to adjudicate at the lower level of "first to show the property."
If we are talking about Realtors®, then Realtors® are obliged to make the commission arrangements known to the buyer (Standard of Practice 1-13). 
If we're just talking about agents, well then, that's a different matter.
  • June 27 2012
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The agent who ultimately caused the buyer to purchase the home and earned the commission is generally the procuring cause agent. That procuring cause agent might not be the agent who obtained the offer from the buyer, presented the offer and successfully negotiated the seller's acceptance of that offer. But it's often not the agent who simply first showed the home.

Every state Realtor association has its own guidelines that establish procuring cause, none of which are fast and hard rules. Some facts carry more weight than other facts. A buyer could sign an exclusive buyer's broker agreement with one agent but the second agent who closes the transaction, depending on circumstances, could end up earning the commission. Procuring cause is complicated and the outcome is not always predictable.

  • June 27 2012
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There's so many comments about ethics/moral/etc. Beyond all that it comes down to whether you had a contract with the first agent. If the first agent didn't secure their business with a contract, unfortunately, it's their loss.
  • June 27 2012
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I have seen the first agent sue and win in this exact situation.
  • June 26 2012
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The question is whether you had a legal contract with the first realtor. If you did not, then you have no obligation to this realtor.

It doesn't matter who showed you the property first. What matters is who has the legal contract. Whoever had legal contract is the person that will get paid.
  • June 26 2012
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No no no! To a Realtor®, "procuring cause" is the agent that represents the buyer in the purchase, not the first agent who showed the property. 

The real question is: who does the seller pay? The first agent who showed it, or the second agent who wrote up the offer? That is probably spelled out in the listing agreement used in your area, but I bet it says something to the effect of: it's the agent that brings the offer who gets paid.

However, if you did contract with an agent to represent you exclusively and you used another agent, you very likely owe a commission to that first agent, out of your pocket.
  • June 26 2012
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Utilizing an Exclusive Buyers Agreement is a commitment that you and the agent will work together for a specified amount of time.  It clearly spells out the  responsibilities of all parties. It still is not a contract and even used DOES NOT GUARANTEE A COMMISSION!  It is correct that on 1 July 2012 in VA a new law goes in effect where you must sign an agreement in writing as to who is representing you.  This form has been around for quite some time and do not understand why more agents don't use it..now there is no choice.  Good luck and sorry you are in this dilemma.
  • June 26 2012
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" but I suggest you ask yourself "would I have seen this house if I had only relied on the second Realtor to send me details?" If you can say yes, then clearly the second Realtor should get the commmission."

@ bernardg,

NOT necessarily.
What you are suggesting is that it is legally (and morally) acceptable for a buyer to use one agent to show him/her homes and then fire that agent by using some trivial reasons and go to their aunt Sally who is also a real estate agent and have her write an offer. 

Most/all real estate agents would find such practice as unethical and unacceptable, except perhaps aunt Sally.

  • June 26 2012
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I can't argue with any of these answers from a legal perspective, but I suggest you ask yourself "would I have seen this house if I had only relied on the second Realtor to send me details?" If you can say yes, then clearly the second Realtor should get the commmission. If you are uncertain, then I agree with James Ryan. There is a moral consideration here.

Again, as James says, it is nice that you are considering what the Realtor is entitled to. Most people do not care.
  • June 26 2012
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Profile picture for StiegStrand

The answer is, that unless you sign some sort of a representation agreement, you do not need to pay a commission.

The purpose of a buyer representation agreement is two fold: to define the responsibilities of each party (agent and client) and to define compensation for performance. So, if there was no agreement, then no defined responsibilites, then of course.... No commission owed.

Blessed to Serve,
Stieg Strand

  • June 26 2012
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I certainly agree if you signed a buyers agreement and during the time the agreement was in place, you were shown the home, then it is the first agent's commission. I also feel strongly even with NO agreement in place, if the first agent showed you the home, there is a moral imperative here since they showed you the home initially. Discuss this with the agent you are working with now. Perhaps a referral fee to your first agent is in order.  It is nice of you to even consider this problem! I fear most people would not...

Best wishes, Jim
  • June 26 2012
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Profile picture for Lawrie Lawrence
Did you sign a "buyers agency agreement" with the first agent? 

If you did and they showed you the home first, then yes they are entitled to the commission.
  • June 26 2012
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