February 19, 2008,
C.M. asks from Frisco, TX on January 30, 2008
Contract Expired with Our Realtor - Do We Own Him Anything?
We contracted with a realtor to sell our home and assist us with the purchase of a new home. Since he would receive commission on the purchase of our new home, he did not take commission on the sale of our exising home. Well, our home sold and we have yet to find a new one. We looked at our paperwork and our contract has expired, so we were just wondering if we owe him anything? We do not plan to continue our search through him, so are we just done?
Thanks for any help - I'm so new to this!
So What Happened?™
Thanks everyone for your help! We are in no way trying to stiff our agent and had already planned to meet with him now that our contract has expired and figure out how to proceed.
Based on the responses, I feel like my question was mis-interpreted as though I thought we should not pay him anything, when in reality I am unfamiliar with real estate and was just asking a question of those with more experience. As I mentioned in my post, I'm new to this :)
Regading the commission on the sale of our house, we had several agents offer the same situation - no commission on the sale of our house as they would receive 3% when we purchased a new house. We did not know our agent before and we are definitely not upgrading the $/size of our home, but again several reputable agents offered us the same deal and we interviewed a lot of agents!
E.D. answers from Dallas on January 31, 2008
I think that the person who said "legally probably not, but ethically YES" was correct.
He sold your house, right? You owe him that.
OK... so I will change/add to my response to. The truth is, once it expires YOU DO NOT HAVE TO USE THEM for further sales.
G.H. answers from Dallas on February 19, 2008
You may have your answer at this point in time. Realtors often reduce their commission when they are working both sides of a transaction. Based on the information you supplied, technically you do not owe the agent a commission; however, since one transaction was probably based on the other, you should pay him something in good faith.
He did help you sell your house, but for some reason you're not able to find another so he will not received anything on that end of the transaction either unless it was in that agreement.
Please let me know how this turned out and whether or not you have already made a decision.
L.B. answers from Dallas on January 30, 2008
Hi C. -
I'm sure you have very good reasons for not continuing with your current agent. In my opinion you should at least discuss this with your agent.
I am a real estate agent, and I would be very upset if my clients did not give me an opportunity to make things right. If I list and sell a home, I have time/money invested in that sale. By you choosing another Realtor, your previous agent basically paid you to sell your home (not good business).
As far as the legal standpoint, your Buyers Agreement may have expired, but you will want to read your Listing Agreement to see how he specified his commission breakdown. You also need to look at the protective period within both agreements. If you purchase within that protection period, you most likely will be liable for his commission.
I'm happy to look at the agreement confidentially, but regardless of what they say, if he wants to fight, he certainly could.
Let me know if I can help you further - L.:)
A.K. answers from Dallas on January 30, 2008
I am not certain from a legal perspective, but I would think from a moral and ethical perspective...yes. Basically he provided a service for you that he did not get paid for. I would imagine that if he is a reputable realtor that he would protect himself and have something about it in the contract. Reread the fine print in your contract. I bet you will be paying him.
M.T. answers from Dallas on January 30, 2008
Oooh, this hit a chord with me...
Yes, please sit down with him and try to work out some kind of arrangement. I agree with everything Leigh said and I can't offer anything further.
Without knowing the full story I have to say the bottom line is this; Your agent provided a service and should be compensated for the time and money he spent getting it done, and in this market...no small feat!
N. answers from Dallas on January 30, 2008
That is such a strange arrangement. Usually when you buy a house, you do not pay the Realtor, the seller does. In your case, it's strange that he did not take a commission when your house sold. My guess is there is something in your contract that says if you do not buy a house with him as your realtor, you will owe him the usual 3% (or whatever it says in the contract) from the sale of your house. Even if your contract has expired, all that says is you don't have to use him for the purchase of your next home. If there is any verbiage in it regarding payment for the sale of your home, that would probably still be valid and you would still be responsible for paying him that commission.
If it were me, I would try to continue using him for the purchase of my next home, because that essentially means you won't have to pay a commission for the sale of your home since he'll be taking his commission from the seller of the next home you purchase. I guess there are reasons why I might not continue with a particular Realtor, but 3% of the sale of a home in today's market can be hefty so you might consider that before you decide to switch Realtors for the purchase of your next home.
S.W. answers from Amarillo on January 31, 2008
Reread the contract. If you don't understand it, make an appointment with a local real estate to ask questions, Usually the first meeting is free. Secondly, you are under no obligation to continue with said agent in the future. If you two have other reasons why you don't want to keep him/her that is fine. Real estate is a fickle industry and the seller/buyer has no real loyalty to any one agent as they are people and with pesonalities. It is nice if buyers stay with you until the sale is final and contact you when they thing of upgrading but there is nothing in writing unless you do an exclusive buyer/seller contract at time of the listing.(former real estate agent).
D.G. answers from Houston on January 31, 2008
C....If you signed a buyers representation contract then he/she will represent you as long as that contract states...any time there after you do not owe the realtor anything. however, if there is a home that this realtor showed you and right after the contract was null and void you purchase it...technically he would have the right to fight for that commission but it would actually be more effort on his part to try to hire an attorney and purse it...but with the market that it is today...he/she might consider it and realtors are 100%. Now, if you signed a seller's agent contract same terms apply. Hope this helps