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Where is my 20%?

By Chris Gempeler

Real Estate Agent with Breckenridge Mountain Top Realtors

July 15, 2008 08:38 AM

Where is my 20%?

Hello all! I have an interesting situation and would like some input on this issue.

I just recently had some very close friends move here to Colorado. They were looking to purchase some Real Estate, but it was out of my MLS and Market area. I told them they should try to meet with a Realtor from the area first, and if that didn’t work I would make the drive to help them out. I didn't even look for a referral fee! They met a realtor from the area who spent about an hour with them showing them around 5 properties. Out of those properties only one stood out, but they wanted to continue to search the market. They called me with some concerns about the Realtor they had seen the previous properties with. I asked them if they had signed anything with the other broker yet, which they responded "definitely not". At this point I searched the area and made the long journey to show them many more properties. After all the looking they fell back on the house that stood out previously. We made and offer and got the place under contract.

Throughout this deal we went through trials and tribulations. From water problems to financing problems the listing broker and I had to work very hard. After all this, we finally made it to the closing table and got the deal done. Two days after we closed I received a call from the Broker who previously showed them properties. She said that she showed them the property first and she deserves 20% for a procuring cause. At this point I said you may be entitled to this 20% but I would have to discuss it with my on staff lawyer. When I said this she became a little skittish and we ended the conversation. I asked her to send me her contact information, which she never did. Later that day, I received a call from the listing broker who is now the one being pursued for the 20%. Unfortunately, her managing broker said that they will pay her the 20% to keep a good standing relationship with the other company. I feel very bad for the listing broker who worked diligently to get this deal closed. I do not feel this first broker is really entitled to anything and is scrambling to make a little off whoever she can. Any thoughts or advice??

The Mountain Top Realtor

Chris Gempeler

Breckenridge Colorado

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Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Chris, My opinion has always been, that if there is no Buyers Broker Agreement then that Buyer can switch brokers anytime they want. I also do not think just showing them a property is prucuring cause. Based on what you have written you obviously worked hard for these folks and were the reason they purchased. The broker asking for 20% is wrong. However, working relationships do mean something in this business. If the listing broker feels obligated to pay the 20% I would offer to split it with them.

Jul 15, 2008 08:50 AM

Dawn Grasty

Prudential YSU Realty - Durham, NC

Durham NC Real Estate

Yep, I agree with the above. If there's no buyer's agency agreement, then there's no promise of payment. They can surely ask, and try to argue procuring cause, and depending on the relationships involved (also mentioned above) it may be worthwhile to pay the referral fee to maintain relationships. You never know when you're going to end up across the closing table from another agent, and keeping bridges in tact is often worth a referral fee. . . You'll have to weigh it yourself, based on the relationships.

Jul 15, 2008 11:45 AM

Alan Brown

Coldwell Banker Realty - Davenport, FL

34 Years of Real Estate Experience .

I believe that the agent that showed them the property first is the procurring cause and by law is entitled to the full co-op comission regardless of whether there was a buyer agency or not. You are probably very lucky that the agent only asked for 20% referral. As for the listing agent paying a 20 % referral that is down right stupid.

Having said all that my opinion is, after working with buyers and showing them property they don't like you and they go and buy a property from another agent you only have yourself to blame for doing a bad job in the first place. I really have no sympathy with the first agent at all, learn from the experience and move on instead of trying to get someone else to pay you a comission.

Jul 27, 2008 09:39 AM

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Chris Gempeler

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