What to do if a builder takes your buyer?

Dear Matthew,

Sorry to read that, it seems unbeliavable, let me tell you my experience on this kind of situations,

1) You first need to have a Exclusive Right To BUY   Always to protect your side and protect the transaction,   do you have it signed by them right? I meant them ( your clients or ex clients )

2) If you asked them ( your clients or ex clients ) about if they told the builder that they had an agent,  builder needs to respect that,  there is not need to be present at that time, at least here in Colorado,  it has happened to me  that my clients go with builders alone, but I advise them when a sale representative ask them something, they need to say,  I have an agent already  and  builders respect that.

3) Remember one thing,   if you explain your clients about how builders work and how you work, they will understand that you need to be your clients side to look for the best interest of them.   builders? if they come alone, it is like a wolf eating a lamb,   they will look just builder's interest.   so that is a good reason that they need to stick with you and you can represent them.

4) If you are 100% that they told that they had an agent,   you can win this situation easly, you can make a good complaint directly with a builder's manager or supervisor about the problem that you have there.

 I do not see a weak case on this one, but of course, the best thing to do it is to tell your manager and see what is the best thing that you can do,

Good Luck and I wish you the best to get them back.

 

 

 

Matt,

The big question is did you have a buyers brokerage agreement in place with these particular buyers?  Secondly, expose the new home builder if they have a history of snaking buyers from real estate agents.  Third... is it the actual owner of the development making the choice of not paying you or the on site agent?  I've made more then one phone call to the higher ups and have resolved several problems by talking to people who understand that their future reputation is more important then cutting out a professional from a real estate commission.

As long as it's true, have no fear in exposing a builders tactics of not paying REALTORS for their hard work.

SVRPaul 

 

James,

Builders do not want to have problems, they want to sell, they earn thousands and thousands, so to share comission with the reaslton, it is not problem, I believe that the problem here, I am right, I am just making my assumption because I do not know more about it, it is that the sales represenative wants to earn more commission,  a greedy sales rep.   It is a matter just to do a good complaint about the builder with a high manager or representative and Matt can fix the problem.

I would go around the sales rep to someone higher up in the builder's company, like an area director.  I've had to do that before and they readily put me on the contract.  If that doesn't work, you could also send a copy of your buyer's agreement with an invoice to the title company to have them put it on the HUD for the buyers to pay at closing.  Give your buyers a heads up on this so they're aware of it, and see if they baulk.  In Texas, if a buyer says they have representation and they want representation, a builder's rep cannot deny them representation, especially if they were told up front about the representation.  It sounds as though he interfered with your exclusive contract, and even if your broker won't go forward to fight for the commission, you can still let them know you plan to fight for it and see what happens.

Other than that, you chalk it up to another learning experience.

Ray,

"Third... is it the actual owner of the development making the choice of not paying you or the on site agent?"

That's the whole point of the above sentence in my comment.  I was the Director of Sales for A Developer and trust me, paying a legitimate commission to a REALTOR was already built in to our marketing budget.

James,

Hm... Yes, that's right,  but   matt should get easly that % of comission, it is not hard to claim it,  the work that he did and if he has the exclusive right to buy signed by the (clients or ex clients), he can easly win this situation.   It is up to Matt to fight for his rights. Unless the buyers lied, so problem the problem should be now with the buyers a little more complicated in that scenario.

 

 

 

 

Is there a grood way to get the information out on the builder/sales rep that refuses to pay commission to buyer agents without getting sued? I would think the pressure put on by you and other agents in the area would do the trick. Especially in this market when they can sell more houses when they honor our buyer contracts. Please let us know how this works out. Thanks.

If you have an Exclusive Buyer Agency Agreement file a complaint with the board.  If you have the EBA signed by the buyers and the date has not expired then you have a right to your commission.  Sounds like this agent needs someone to test him.  I would have written the contract for them then submitted it to the other agent.  But if they went to the other agent I would take you EBA to the board and protest.  Get your commission.  Maybe then this agent will think again before undercutting an agent.  Good Luck!

I had a builder in town that solicited my buyer directly after they were registered.  I called the buyer, then the builder, and then called back my buyer.  I asked him did he call them ans ask for additional information, and he said no.  They contacted him, and said if he would drop the agent they coould give him a deal.  I asked if they spelled out the deal?  He said they even faxed it to his workplace.  A fully executed contract with attached addendum and plat.  WITHOUT MY NAME!  I then pointed out the buyer, that if he read the small print on the on the survey, the home they were trying to pawn off on him as a minority was in a FLOOD ZONE PER ELEVATION STUDIES AND THE HOME REQUIRED FLOOD INSURANCE!  This got the buyer crazy, because they stereotyped him, and tried to pull a real fast one!

I made an appointment to meet with the head of the company, and he denied everything,  I even pulled out the contract and he still did s a soft-shoe dance around it.  A month later I met one of his on site agents at a continuing ed class, and she informed me that she left the company because the OWNER HAD INSTRUCTED ALL HIS STAFF TO TAKE THE BUYERS AWAY FROM THE AGENTS THAT BROUGHT THEM IN!

So anytime anyone asks what builders would I recommend in town, that company is not one of them!  I know a lot of perople, and I talk a lot one on one!  That deception has caused the builder a fortune in lost business over the years!!

You need to let the board know about this. An agent tried that here, but lost!

YES! I am very familiar with a builder taking a buyer.  One of my agents listed a gorgeous home for a builder, one of several he "was going" to list with our firm.  My agent promptly promoted the home in every fashion possible.......then a couple who wanted to buy the house came to her ready to buy.  All parties understood the agency in this situation, Buyers and Sellers came to an agreement, Viola' , we're under contract, proceeding on. 

One afternoon, the buyers were cruising the development of the home they were to purchase and ran into the builder, they did not tell him who they were, only told him they were interested in looking at a home in his development.............NOT the one they had under contract, mind you.  Jeff (the builder) proceeded to show the couple the respective house and told them he could save them money on it since he wouldn't have to pay a "Realtor commission" on this house.  The couple took the bait and were hooked........BUT they told him that they had to get out of another contract first.  That was when the builder found out that the "contract" they were referring to was on HIS other home, the one he had LISTED with an agent, my agent.  Suddenly I was getting bombarded with phone calls saying how 'bad' our agent was and lies after lies as the buyers were trying all they could to be released from the contract and from their agency agreement.....this agent all of the sudden was the worst person in the world.  The buyers assumed that from their complaints and apparently if they complained enough,  that they would be released from the contract, I told them that was not going to happen. 

Immediately after my conversations with the buyers, they contacted the builder and he contacted me.  Both parties basically lying profusely.  Jeff, the builder, said he was releasing the buyer from the contract.   I very kindly told him that regardless of the release, he still owed the agent her commission. "Tish bottom line is ethics or money, and I'm going to sell this house and make money, I'm in it to make money". I responded by saying, "thats obvious, but you still owe our agent a commission!" "Well if you're going to play hard ball, just come and get your signs and lock box", he said.  I informed him that I had already sent someone to take care of them, that I would not work with someone like him.

After consulting with our attorney, he said in the end, yes, he was contractually obligated to pay us a commission, but of course, if he refused, as he did, our only alternative was to take him to court, which would end up costing more than the earned commission in the end. 

You know, we do our job and do it well, morally and ethically........then someone like this comes along, sorry to say it, but it just makes me sick.  

Since you are in Michigan I would say that you should call your local board. i would imagine your builder is a member or at least an associate member and as such is boundby those covenants. If nothing else filing the complaint will make you feel better. Finally take action in making sure other agents know the tactics used by this builder either word of mouth or anonymous postings at area online communities. The last thing you want to do is just go away especially if the builder is part of the local board. I am a mortgage guy in Grand Rapids, so I am not an expert in real estate agent protocol etc, but I have seen agents go to the local board here for all types of complaints and get cash in arbitration or from other brokers with the threat of arbitration.

 

If nothing else consider prepaid legal it is kind of ascam but for $30/ mo they will write a lot of letters, and attorney letters sometimes open doors the best reasoned arguments will not 

Hi Matt,

Here in Texas we have what is called a buyers representation agreement.

This is a protection for the buyers agents commission for situations like this. If a builder would not pay here in Texas with a buyers rep.The buyer has choices the buyer can pay the Broker who will pay the Agent at closing or the buyer can back  up as his or her buyers agent.  So the buyer and agent would go to the build and say if you want to build this home for the buyer then you the Seller/Builder much pay the realtors commission because the buyers rep reads that the Broker will first seek commission from the seller and if the seller will not pay the commission then is the buyers responsiblity and may need to look into adding the commission to his or her mortgage or paying the buyers agent out of pocket. 

Do you have a buyers rep in your state protecting your commission?

Have a great night!

Suzy