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What's the implication of an expired Buyer Representation Agreement

Hi all, I'm writing on behalf of a friend who is just now closing on a house as a buyer.  The situation is this:
1.  The buyer's agent has in several ways violated her duties to the buyer.   The most egregious of these was asking the seller for an additional .5% commission in the email presenting the buyer's offer.   This was done in the context of her describing how great the offer was (over asking, 40% down, close in 30 days etc) and describing how excited the buyers were.
2.  My friend just discovered that his agent had, by error, put the expiration date for the Buyer Representation Agreement at a date well before she showed them the property.

My question is what the implication of this is.   Seems like some possibilities are:
1. The buyer's agent had no duty to protect the buyer's interests in the transaction.
2. The buyer's agent isn't entitled to any commission.

What comes of all this?  Clearly, the agent acted in her own self interest in touting how great a deal the sellers were getting and asking for more money as a result of that.  Does her incompetence in erroneously dating the contract get her out of responsibility for that?  Any thoughts would be greatly appreciated.
  • August 10 2011 - Castro Valley
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Answers (3)

Best Answer

I can't speak of whether a contract with an erroneous date renders it void as the courts may determine that while the date was incorrect, the intent of the agent could overrule the error.

What is more troubling (and perhaps more relevant) is the agent appears to have potentially violated their fiduciary responsibility by:

1. Failing to disclose to the seller their intent to ask for an additional fee.

2. Throwing their client under the bus when presenting the offer as they essentially cut off the legs off their client by revealing aspects of the buyer that should not be discussed. It sounds like the agent was no longer an advocate for their client. Rather the agent became an advocate for their paycheck, which is pretty amazing considering how little a half percent can be after commission splits and taxes.

In Minnesota agents and clients typically sign an arbitration agreement. I don't know California law so I don't know if this is applicable to your friends situation. But the arbitration agreement binds all parties to arbitrate any disputes rather than suing in a court of law.

Additionally I believe the contract your friend signed was actually with the agents broker (with the agent acting as sub agent). Therefore if your friend has issues with their representation, it's best to discuss it with the agents managing broker, and probably do so prior to closing.
  • August 10 2011
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We don't use buyer/agent contracts in my area, but the fact of the matter is this agent successfully brought your friend to closing and the buyer agent contract is superfluous at this point.

Regarding the agent calling the listing agent, that sheds light on the agent's character and slime factor but it obviously didn't affect the deal at all, at least from what you described.

The fact of the matter is your friend closed on the house they wanted and the deal is done.  The agent accordingly deserves compensation however referrals, probably not.
  • August 10 2011
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Did the sellers accept the offer?  They will owe a commission if the agent brought the buyer to the seller.
David Cooper
  • August 10 2011
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