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Limited Service Agents And Procuring Cause

It's easy to imagine how an Internet based real estate company in, say New Jersey, could get licensed in Nebraska and have clients who list their houses. It's really kind of a hybrid FSBO for the seller. The seller gets a hefty discount on the brokerage fees, and in return agrees to do a lot of the showing and advertising. The agent may or may not be the contact person when an offer comes in. They put the listing on the multple listing service and handle any of the paperwork with email or fax.

But it's different when you are buying. I can understand making it work when the buyer is working with a local limited service agent. The buyer gets the listings, does drive-bys or Sunday opens, and when they narrow it down to a few houses, their agent gets involved.

But in this case, if the buyer is using an agent in a faraway city or state, they will have to rely on the seller or another local agent to get them in the door, unless the place happens to be open. But what if Dream House is listed by an agent who does not believe in Opens?

Let's say that our buyer in question calls the listing broker's office in Omaha. The buyer explains to the agent on duty that he is working with OnLine Homes, and that his agent is located in Bayonne. He makes a request that the agent show him the home.

The broker is representing the seller, and by refusing to let the buyer in, they are not exactly working in their cleint's best interest. But the buyer has disclosed a relationsip with Mr. Online Homes. If this person buys the house, will the duty agent be compensated?

Or can the duty agent, or for that matter, the listing agent just say no, unless the buyer agrees to cancel the deal with Bayonne?

Or does the limited service agent have to fly to Omaha to show the house and write the offer, since that is what the listing company is offering a coop commission to the selling company to do?

It would be fun to hear from some of the limited service agents out there.

Posted by Patricia Kennedy on 05/29/2008 09:15 AM

Comments (59)

Procuring Cause and Limited Service Agents in the Sales Strategies / Tactics Channel

limited service brokers, remote buyer brokers

Originally posted at: Pat Kennedy - Your Washington, DC Real Estate Connection: Limited Service Agents And Procuring Cause

Post is included in group: Realtors®

59 Comments on Limited Service Agents And Procuring Cause

MAY

2008

Patricia- I am parked. I am very interested in knowing how they handle this. I send them an fee schedule of our fees for doing their work on an a la carte menu style.

Yes I would like to know how when there is no "local" agent they can expect to be compensated as a buyer's agent. I think this example would be a very slippery slope.

This is going to be interesting. I have not encountered this situation yet, and frankly would go to my broker to ask how it should be handled.

Couple of questions arise:

Will the buyers agent be available to present and negotiate offers on the buyers behalf?

Will the buyers agent attend the home inspection?

If the buyers representative isn't going to perform all the duties of a buyers agent then it is more than procuring cause that is an issue, in my opinion.

If I agree to show the property I will add my showing fee in to the transaction and either the buyer or the buyers agent will pay at close.

Patricia- We had seen more of the in the past couple of years. The "Limited Service Company" would call the listing agent to show the buyer the property and if the buyer was interested ONLY then would the agent from that company get involved.

I don't think they should be compensated the whole amount without performing any of the necessary steps that lead up to and follow through of the WHOLE transaction. Just my 2 cents.

I believe the listing agent has a duty to show their listing..no matter what. Unless their client says not to. Otherwise it must be shown. The on duty agent, in the listing firm, has the same obligation at least in NH as we are a fiduciary state. How that agent gets paid is an office policy issue.

Interesting...do let us know how this turns out.

Pat, I have not come across this situation yet as far as a buyer is concerned. Aren't these companies the ones that offer rebates to clients and that is how they keep the client tied to them?

I would only show if the buyer would cancel the agreement with the other company, otherwise it is a waste of time.

Well I would say it is the responsiblity of the listing agent to show the home. If the buyers have a buyers agreement with the listing company so be it. The agent cant go for procurring cause. However on the same side. I dont and I dont think most agents give a commission to nonkeyed realtors meaning out of town or state realtors. So your seller isnt paying the buyers agent commission. So if they, the other company still chooses to do all the paper work for free heck less you have to do, but something tells me that they wont and the buyers will become yours anyways.

limited services should get the same pay that they offer in service, limited pay, but I guess that's just my opinion

Once again - it is time to keep our listings on our own web sites. If all they have to do is get a lisence and put up the MLS link for listings, we are hurting ourselves. Our listings are the inventory of our business. Staples doesn't advertise and negotiate sales for Office-Max. Why do we provide the inventory for other real estate sites?

See REindex.com - by a lister for listers - free

Patricia - This should prove a very interesting and healthy discussion. I'm parked as well:-)

Coming back to this situation, I read Heather's comment about it being the listing agents duty to show the house. I agree with that, but as I read the post, you are talking about a call from a buyer to the Duty agent on floor, who may not be the listing agent? At that point, I think the duty agent should forward the listing agent's info to the buyer.

Hi Pat: Fred Here. This is a great post. I was just speaking to one of our guests from the radio show and this very thing came up. I have to draw the line with the internet. I love the fact that we have so much info available however too much info has lost the "contact" aspect of this sport. Remember people still need people. Keep it local. Hope your well. Love to have you back on the show.

Katerina, that never occurred to me, and I think it's a great ideal!

Cindy, I did a remote transactions with a listing, where i represented the buyers. The seller was using a firm in New Jersey to get onto MRIS, and Jersey guys offered to do the negotiating. Then the seller just decided to leave them out of the loop and proceed like he was a FSBO. And while someone up there was licensed in DC, I don't think it was the person who offered to do the negotiating on behalf of the seller. Licensed in NJ maybe, but not Virginia where the house was located. It didn't work badly.

Kris, unless the internet company has a local affiliate, and most of them don't seem to, I think the answer would be no.

Terry, like Katerina's approach, this does make sense. I'd up the tab if they wanted me there for the home inspection and other stuff the buyer broker normally does.

And Laura, this is where the listing company would certainly be justified in requesting a referral fee.

Pat, As a listing agent we have to show the property to anyone who wants to see it however we don't have to pay commission to another broker. A listing agreement is between seller and listing broker. The commission is stipulated in the listing contract. An out of town website will be lucky to get a referral fee if they have a contract with listing broker.

Monika and Heather, I totally agree that the listing agent needs to get the buyer into the house. And Audrey, yes, I did add a duty call to the mix to make it more interesting situationally. And I would probably refer the caller to the listing agent who can, in turn, deal with the so-called buyer broker. Heather, if the agent is in another state but actually licensed in your state, it could get really dicey!

Kelly, hey! Thanks for checking in!

Audrey, yes, they do typically offer rebates. But if they are not local, I'm not sure the buyer really understants how limited their services might be. Getting a door open is pretty bare bones, and if the agent is several states away, it's not going to work too well.

And Dennis, I've never seen an MLS mechanism that allows one payment for a traditional buyer broker and another for an Internet broker. Now that would get the juices flowing at the Department of Justice!

Heath, I gotta admit, I have one listing that I would be glad to have to deal with a limited service buyer broker! I just want it sold! But if you didn't post the listing on your local MLS, you're doing your seller a huge disservice - because like it or not, that is the search source for agents and, usually the public, too.

Jason, cool! Everybody's parked today!

Fred, it is so great to hear from you! And yeah, this is a terrific radio show topic!

Mitchell, I think in NY you do it differently because an area-wide MLS is not quite as dictatorial as it is in a lot of places. I think it boils down to whether or not the Internet agent is properly licensed in your jurisdiction. If they are located in Kansas and have a DC license, it is a different situation than if they are not licensed. And my guess is that a lot of these guys are committing unlicensed real estte in at least some of the areas where they purport to "represent" clients.

Patricia, I have never encountered the limited service buyers rep but the selling side yes. Most of the time they do so little for the homeowner, and being out of state, I think the seller is getting ripped off.

Gary, I think the seller way better off doing it himself on the transaction I had. But the bad thing that happened was that the house appraised way low. The Seller met the appraiser himself. A good agent would have had the comps in hand and all of the comparison information.

Very interesting. I have often wondered how this would work. It is a great topic for discussion. I am so glad you brought this up. I will return.

Joan, I'm finding the comments at least as interesting as the post!

Yes it is very interesting in that what about out of state agents? In NC the commission does not recognize other states. Now I work with out of state and out of country clients but do not discount anything.

Larry, you don't have to live in a state to be licensed there. For example, I live in Washington, DC, and I'm licensed in DC, Virginia, Maryland and Texas. But you can bet that if I had a client who wanted to buy in Houston, I'd call Marchel Peterson. Even if I had someone in Annapolis, I would call Margaret Woda. But I could legally sell a house in either place.

If the Internet agent is not licensed in your state, they are not legally able to practice real estate there. And they would be unable to even file a complaint with your local or state Board of Realtors to ask them to arbitrate - at least that's my understanding.

Read your listing agreement. The listing agent has an obligation to sell the house and to undertake those efforts that are necessary to do so. I don't see what the legal basis is for trying to ching the buyer for services (such as a showing fee) that you are already contractually obligated to undertake -- they have no agreement with you and the listing agent has no legal basis to force one on them. If the listing agent refuses to perform as contracted in the listing agreement, that buyer has every right to go directly to the seller and cut a deal that cuts out the contract breaching listing ealtor. And the seller has the right to complain to the realty board. If the listing broker wants to pay his/her office mate for showing the house, so be it, but that is an internal matter.

Karen: I don't think anyone would argue with you about a listing agent's duty to part the seas, if needed, to get the listing sold. The question is, if you are an out-of-state (possibly unlicensed) internet site, is the listing company obligated to pay you a coop commission for giving a member of the public the listing broker's phone number.

Interesting question. I have some buyers who are right now in option with a seller who used a limited services Internet broker. It says right in MLS that all offers should be presented to the seller. So I called the seller and told her an offer was coming, but that I could NOT negotiate with her. Any negotiations would have to be through her out-of-state broker. That was news to her. She thought she was a FSBO! I guess she called the broker and was told she'd have to pay for advice from them. Instead of negotiating, she just accepted the offer as it was written. I hope she does the same when I present her with the repair amendment!

I guess I would not do the buyer's agent job. Why should they get paid and you do the job.

Pat~ interesting post. I have several questions, such as to Katerina- how would you get paid just to show if the buyer shows no interest after seeing the property. I would not be able to get paid upfront in NJ. Also, here is NJ we don't have reciprocity, so I'm having trouble seeing how all this would work.

Pat,

Whether or not the duty agent gets paid is not at issue, or more to the point, an issue to be settled by each office's operating procedures. I would assume that in most cases if a call comes in from an unrepresented buyer the duty agent has themselves a new buyer lead. But if someone calls in with questions on a particular listing, and they are represented by another agent (local or otherwise) that call would be directed to the listing agent.

Reading your post and all the comments reminds me the furnace repairman who fixed a furnace with a swift kick of his steel toed boot to the side of the furnace. He presented a bill for $200. When the outraged homeowner asked for an itemized bill he wrote, kicking furnace=$5; knowing where and how hard to kick=$195

I think the real question that your post raises is the same question the homeowner asked the furnace repairmen in my story. And that is....What do buyers agents get paid for? I would submit its not for driving buyers around town, looking at homes; its not for opening those doors with our trusty Supra-Key ActiveKey; its not for being there when a home inspection is done. Its not for any of the things that we do. Rather we get paid for three things, 1) product knowledge, which lets us match a neighborhood and home to a buyers particular needs and wants 2) negotiating skill and 3) moving the deal from contract to close. These are things we know, not things we do and if a buyers agent (local or long distance) is able to use what he knows to get his client in a new home, he has earned his commission.

My real issue is not commissions, or what you feel your value is...my issue is what is limited service...really what is full service...we need minimum standards to qualify for full service. My standards would be high enough that my guess is half the agents would not qualify...including some top producers.

Hi Pat, I'm back. After reading the comments by Karen, my thoughts were this:

As listing agents, our job is primarily to market the home, both to the public and to participating members of the MLS who may be working with a buyer that would be interested in the home. It is expected that a buyer's agent will bring the buyer, show the home, attend the home inspection, negotiate home inspection issues, negotiate the contract on behalf of the buyer, monitor their mortgage, attend closing, etc. to earn the fee that is offered through the MLS to a co-op broker. That being said, I do show my own listings if need merits it and a buyer's agent cannot be there. But I don't want to be taken advantage of by a lazy or out of area buyer's agent who is doing nothing to represent his or her clients.

Again, I have no problem showing the home to a potential buyer. I do ask them over the phone if they are being represented by an agent and I inform them that I am representing the seller until informed otherwise. If they say yes, they do have an agent, then I request that they view the home with their agent to protect their best interests. If they say no, they don't have an agent, then I explain their options: They can choose to have me represent them as well as the seller (dual agency is legal in Illinois), they can choose to be represented by another agent, or they can choose to represent themselves (usually through an attorney). If they are not sure, I advise them not to disclose personal information to me that they would not want a seller to know.

What Karen does not appear to understand is that the "rules" were formed to protect buyers and sellers. It is generally not in a buyer's best interest to interact directly with the listing agent or the seller for that matter. The buyer cannot go directly to the seller in an attempt to cut out the listing agent...the seller is contractually obligated to pay the listing agent for his or her services marketing the home during the term of the listing agreement and usually for a protection period afterwards.

Buyers agents aren't being paid for merely showing the home. That is simply one step in a multi-step process. A buyer could view the home during an open house for that matter. But why wouldn't a buyer want professional representation every step of the way?

Patricia, Interesting thread, but I also have to wonder of the amount of lawsuits that will come out of these transactions and how they will affect the reputation of the real estate industry as a whole. I see many of these transactions using a limited service buyers agent in a faraway place coming back afterwards because of problems, etc. and lawsuits flying left and right. I could be wrong, but you have to wonder. Just my .02

What a lot of very interesting and thought provoking comments. I actually had a very similar situation like the one described above occur this past weekend.

On Saturday night, I received a call from an agent in Miami who said that he had some clients that were in Orlando for the weekend and were driving around in one of the neighborhoods I have a listing in. The agent shared that the Buyers were in front of the house and wanted to know if they could knock on the door to see if the Seller would let them in OR if I would drive over and show it.

Of course, I said that I would be happy to show it IF he could send me over an approval letter for his Buyer and IF he agreed to the compensation offered for non-members of the local MLS (which is 1% vs. 3%..and is spelled out in the MLS). He agreed to the referral fee of 1% but indicated that he didn't have an approval letter for the Buyer since they hadn't even met them yet!

At that point, I asked him the Buyer's names. He only knew their first names! And he said they were "friends of friends" and but should have no problem buying since "he knows their family and they have money"...although he admitted that they hadn't talked with a mortgage broker before heading into Orlando to "look for homes"....wow!

Needless to say, I didn't drive the nearly 40 minutes out to my listing since I couldn't prove these were actually qualified buyers. I know my Sellers have indicated they aren't comfortable with allowing non-qualified Buyers into their home...but maybe other Sellers don't mind.

I did offer to pay a referral fee to the agent should he wish to refer his clients directly to me so that I could get them qualified with a local lender, show them my listing and if needed, show them other homes as well.

But, he didn't take me up on the offer.

And that, my friends, is a whole other post topic...

I'll put it out there if no one else will. I think limited service agents are garbage. They do more harm than good.

If you want a "rebate" on your purchase, get an agent and they'll negotiate a better price for you from the seller.

If you want to make more money on the sale of your house, get an agent and they'll get more money for your house than you will on your own.

I skipped a few comments, but come on: how could you, having the responsibility of a sale for the seller, even second guess a buyer from another broker coming in, without a Realtor present? How simple is that: you represent the seller (and can feel really good about it) so negotiate with the seller's best interest in mind at all times (which includes attempting to get an offer, by the way). To make the sale of the house for the purpose of commission, vs. the sale of the house for the purpose of the seller's best interest doesn't even make me second think it. Except, I haven't read all of the comments yet...I'll head back up. Great post- thank you.

edit: the seller is paying the commission- it's their money.

I suspect that the so called "discount, limited service, Internet, etc." companies will attempt to

1 Sign the buyer up and agree to a limited fee for service or rebate agreement.
2. Attempt to get the listing agent to show.
3. Attempt to collect the full co-op.

That does not mean that they will succeed. The agent's agreement is with the buyer. They can collect their fee from the buyer. Fat chance.

I'm all for competition. However, no other broker/agent has the right to dictate how I run my business.

We follow the law and the COE. A listing agreement says"

1) Seller enters into a sales contract during the listing period, with any buyer procured by seller, listing broker, or his sales associates, or other brokers or their sales associates, or any other buyer, provided the buyer performs and settles on said contract.

2) Broker shall pay to any Buyer Agent's Broker who has earned and is entitled to share in the Broker's Fee __________% of the Sales Price.

Where does it state that we must show a listing to a buyer who is represented by a buyer's agent???

The fig newton that the listing agent is required to show the property to represented buyers is just that, a fig newton, a rumor that was stated and has has been passed through the ages. There is no requirement that we show a listing to a represented buyer.

Further, we risk a lot showing a property to a buyer who is represented.

I don't like taking risks.

Anonymous appears to have deleted their comment, so I don't know what that said so here is my .02 cents on the topic...

1) First of all the out of state agent would of course have to hold a license within the state of the buyer they are representing and

2) they would have to be member of the MLS where the house is listed in order to receive that unconditional offer of compensation. Oregon doesn't allow rebates so I am not aware of any online buyer brokerage agencies, but that would be pretty hefty to belong to all of those MLS's...Oregon has 5 I think.

I have an alternative business model and I have no problem with the model. If a buyer wants it, that's fine by me.

I do show my listings to other agents clients, that is not an issue for me. The issue for me comes in the home inspection and appraisals. The buyer agent is there for those and I offer them payment based on delegating those tasks to them. If I have to spend my time on that, I have no problem with that, but I would want to adjust the compensation to reflect my increased time. My time has value as well. The time I am spending assiting another agent's buyer on tasks is less time for me to spend on my own business. Those hours have a value.

So...our MLS allows us to offer a differing compensation to brokerages, as long as the principal broker contracts the other principal broker in advance of any offers, and puts their differing compensation in writing. So...if we had a brokerage like that here, I would just write them a letter and let them know that my offer of compensation to them for my listings would be x% regardless of what is on the MLS.

I agree 100% that the seller hires us to do a job for them and we absolutely should do it. I don't think there is anything wrong by asking to be compensated for that lost time. We are a business after all.

What an awesome post/subject! I have been contemplating those same questions for a while. To add another twist, what if the listing agent is also a discount flat fee lister, and collected upfront.

Lorrie, I see no reason to not deal directly with a seller. If they don't way to pay for representation during the negotiations, they take the chance of being bulldozed by a good buyer broker, and that is good for the buyer broker's client.

Russ, I agree that the buyer agent should be there for the negotiations, home inspection and settlement. But if they're not, and if I'm the listing agent, I could bulldoze the buyer, who is getting what he or she paid for. Very little. And if the so-called buyer broker discloses that to their buyer, I have no problem with that.

Lisa, I don't have a huge problem showing a listing of mine to another agent's client. I do it a lot, and here we are a pretty tight-knit community. But it's if they want to buy the place that changes the picture. Then there is a lot of other work involved, and I think that is waht Katerina is talking about.

And Ron, I think the buyer broker gets paid for putting the deal together and successfully negotiating the terms of the offer as well as the home inspection and all the rest. I do a lot of buyer brokerage, and I think those of us with a fuoll-service practice do show up for inspections and settlements and the rest. And yes, I think that if the buyer needs someone with a magic Supra key, it should be "his" agent. I even think to do a good job, the buyer broker should actually see the house. Maybe I'm old fashioned?

Jeffrey & Mona, whatever type of service you want to offer, full or limited, the important thing is disclosure to the prospect in "Run, Spot! Run!" language that anyone can understand.

Kelly, I totally agree with you. I think that a lot of people, both buyers and sellers, are clueless about why they even need to be "represented" in a real estate transaction. And they don't understand that anything they say to the other party's agent can and will be held against them in a contrat negotiation.

Interesting that no one has addressed the potential liability of acting as a agent to the buyer, especially in the offer, inspections, etc. If it walks like a duck and talks like a duck ...

In our MLS compensation is offered to members of our board and cooperating associations (by contract) so just being licensed in Florida wouldn't necessarily entitle an agent from another area of Florida (much less another area in the US) to compensation from the seller.

As listing agent - of course I'd show the property to a qualified buyer. If there were a floor agent (not the case in our RE/MAX office) I'd refer the showing request to the listing agent.

The meaning of full service agent is that we are there for the seller. If the seller thinks he is saving money by working with a limited service agency he should think again. He will be doing all the work.

I think this is why in the ling run limited services agencies go out of business. Just look at what happened to Foxtons.

Veronica

LaShawn, under thsoe circumstances, I probably would have just shown the place. I probably would have asked the buyers to meet me at my office first, but unless you insist that everyone seeing the place is pre-approved, you could be on shaky ground, especailly if they turn out to be in a protected class under the Fair Housing laws - and as far as I'mconcerned, that's everyone.

Andrew, I have no problem with limited service agents, as long as they don't expect me to do their jobs without being compensated in some way. Also, I think it is crucial that they disclose the nature of their services to their clients.

Laurie, I agree that the first priority is getting the buyer in the door, but they need to understand that I will be grilling them for information about anything I can learn that will help my client - the seller!

Lenn, great comment! Really well stated. Again, it's not just the showing a property to a represented buyer, it's just that a lot of these buyers are not really being represented.

And Melina, alternative business models are fin with me. And you are right about the licensing thing. But more than that, I think that we need to do business where we know what we are doing. And I'm licensed in some places where I would feel more comfortable just giving a referral.

As far as I know, in GA there would be a tough time for the out of state agent claiming procuring cause... and so if their contract calls for them to be paid, it would be by the buyer. As a listing agent, I only have to pay out co-ops for an agent that is procuring cause.

Of course, it would probably take a team of lawyer fighting for years to come up with the answer.

But, here is an interesting side question...

Why should the seller pay an agent that does absolutely nothing. They didn't bring the buyer, work the negotiation, guide the buyer through the process... Why should the seller thank them for their work with a paycheck?

Patricia, I appreciate your comment but would ask in return, Do you show property to Buyers who are not qualified? The fact that I tried to "qualify" the Buyer does not mean that I discriminated against them. It's my duty to the Seller to protect their interest and letting just anyone in the house just because they are standing in front of it does not serve the Seller's best interest. Honestly, if the Buyer really was ready, willing and able to purchase a home, shouldn't their agent (long distance or not) have qualified them before calling to see if they could get in the house?

I know that there are plenty of other agents who show homes to Buyers who are not qualified, but just because they do, doesn't mean I do (or should). I find that often times, agents think that if they just run and show the house that they can quickly build a relationship and then get the Buyer to reveal their life history and financial position right then...yes, it might happen 1 in 100 times, but for the other 99, you've opened the Seller's home to someone who not only might not be qualified to buy it, but who might have some other motive for wanting to gain access without doing the preliminary background work first.

Think about this...how many attorney's will represent you in a case without a complete evaluation of the situation, an analysis of your financial situation and an explanation of what their services and related charges are? Or, how about doctors...will they give you a prescription for medication without having a medical history on you and seeing in person when you have never been their patient and they know nothing about you or your potential condition? The answer to both of those questions is NO...because certain professions have minimum standards. In my opinion, our profession would be valued so much more if we had a few more of those minimum standards in place as well!

What a drag when Buyers set up showings through listing agents only and then try to take the coop in one way or another. I show my istings out of an obligation to my Seller, but make it a little difficult by insisting they sign all of the diisclosures before we enter the home. Gregg Ashburn http://www.move2boulder.com and http://realtyofboulder.com RE/MAX of Boulder, Inc. Selling Boulder Homes since 1994.

I have not yet had this happen to me. I would gladly show buyers my listing, inform then that I represent the seller, and answer any questions they may have. If I learn about information that will benefit my client, the buyers have been forewarned. If I had to do the selling agents job to get the deal done, I would certainly expect a modified commission and would have to get some suoervision (advice) from my Principal Broker. My first priority is always to get the property sold.

Great topic!

MAY

2008

This is rather convoluted isn't it? We'll come back and see what comments say about it.

Interesting question, though I do agree with those who have said the listing agent has an obligation to show the property.

Procuring cause....seems to have as many definitions as there are agents...If you find the property on our personal (as opposed to company) website...do WE have procuring cause...in which case, I will just wait for the money to roll in for all the folks that used the site and bought elsewhere. Here..in Wisconsin, to be the selling agent of record, you have to actually walk the buyer through the house so don't see how the scenario you mention would apply here....If you want the commission, you should do something to earn it.

I'm not sure if this is the right answer..if the agent is part of the MLS# and is a licensed agent then they are able to see any property I have. If the buyer comes themselves and discloses that they have an agent...al I ask for is their card. If they don't diclose it then they are working with me. If they show up later on with another agents name on a contract then thats just pure dirty pool. I still beleive the agent should make the effort to show up themselves. But if they disclose it up front then I'll honor it. My goal is to sell the listing...and not have all this other complicated stuff disrupt the possible sale for my client.

This ia a problem that California is grappling with as CAR is trying to build a statewide MLS. The issues you raised are not limited to "Limited Service Providers" but so-called full-service providers who've done the same thing for relatives, etc. for as long as I've been in the business. If you're too far away to visit or show the property you can only supply "limited service" even if your business model is "full service" in your market area.

If I ever worked floor duty and got a call from a buyer and was able to determine that he was working with someone else, the call would be referred to the listing agent to deal with.

Patricia, before I even showed my buyers the listing from the limited services Internet broker, I contacted our local MLS about the wording in the listing and here's the response from the Director of the MetroTex (Dallas area) MLS:

"The listing office can direct agents to make appointments and get property information directly from the seller as well as deliver the offer; he cannot direct you to negotiate directly with the seller and in fact it would be against Texas statutes for you to negotiate directly with the seller or for the broker to direct you to negotiate directly. The seller can set whatever coop commission they wish, but the MLS listing must offer cooperative compensation and the listing broker can be held responsible for payment of the coop compensation listed."

Pat - I cannot imagine hiring a 'limited service' agent to work for me. If I am going to do that, why not do the entire thing on my own??? If I am paying for something, I want fantastic service for my money and that only comes with a full service agent!

Just sell the house Id rather sell it than argue over this stuff.

Limited service Real Estate firms are not new they were around long before the internet was even in play. I would just say "red flag" document everything and have all your questions as an agent in regards to commissions answered and in writing before the contract is written. No one likes a commissionectomy.

JUN

2008

As far as showing my listing goes... we have a fiducuary duty to sell the property. That includes showing it whether the person has a buyer agent or not. I think the rule of thumb is: would the seller show the property to these people if they had contacted them directly? In most cases, yes, because there is an off-chance they could buy it, and the sellers want to sell the house. Maybe the people are impulsive or in town only briefly, haven't had time to get prequalified yet, but fell in love with the property at first sight and could easily run out and get a prequalification letter (or pay cash, heaven forbid).

However, once we have a contract, if the buyer's agent is not sharing 50/50 in helping me manage this transaction completely, why should they share 50/50 in the compensation?

Also, as far as prequalification goes, if it is my listing, no, I don't require everyone I show the listing to have a prequalification letter first - that is the buyer's agent's job. My job is to do everything in my power to sell the house for my client, including showing it as much as possible. BUT I DO require all of the buyers I work with as a buyer's agent to be preapproved before we work together. It is my duty to my buyer and to myself - we are embarking on a long-term relationship there culminating in the purchase of a house, and if I am representing the buyer, and not the seller, I need to make sure they actually CAN purchase a house.

JUN

2008

"Why should the seller pay an agent that does absolutely nothing. They didn't bring the buyer, work the negotiation, guide the buyer through the process... Why should the seller thank them for their work with a paycheck?"

Perhaps, the buyer has engaged only the services desired of the buyer's agent. In order to reduce the cost of commissions, the buyer could handle the "shopping around" and so forth. The buyer may only need the broker for certain things of which he/she may not feel comfortable handling. The buyer's side of the transaction is negotiable because the buyer bears some of the burden for commissions through the sales price.

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