A Builder has his own site agents covering his model homes daily. They are employees of the Builder, and work exclusively for him. The Builder has a full sales and marketing department, and they are doing their own advertising to attract potential home buyers out to their model homes and communities.
The Builder co-ops with Realtors at 3%, and it's well-known in the community that the Builder is willing to work with Realtors. He sends them Inventory sheets weekly so that they will know which homes are available for "quick-move-in" should they have a customer who needs something sooner rather than later.
The Builder's policy is that the Realtor MUST accompany the prospect out on their first visit, however, his sales team is very good about calling a Realtor and letting them know that their prospect was out WITHOUT them, and that they need to come back out with them on the next visit.
Case 1 on the Court Docket:
A buyer walks in to the model, and the on-site agent shows them around, and registers the prospect. The prospect never discloses that they were working with a real estate agent.
The Builder's agent continues to follow up with the prospect, and eventually, the prospect makes the decision to purchase a home from the builder. They make an appointment with the site-agent to write the contract.
The Builder's agent gets a call from the Realtor demanding a commission since he has now just listed their home and states that he has been working with the prospect and had been showing them builder homes for some time.
The Builder's agent is surprised to hear from a Realtor on this sale, since the Realtor's name had never come up in any conversations with the prospects. The Builder's agent explains the policy to the Realtor and states that there is nothing the site-agent could do for the Realtor. The Realtor threatens the site-agent that he is going to take those prospects and sell them on a home somewhere else if he doesn't get his commission.
The Builder's agent gets a call from the distressed buyers: the Realtor called them up and made them feel badly that they did not mention him, so even though they love the home and lot, they are going to go and look elsewhere with the Realtor again.
1. Does the Realtor deserve his commission?
2. Should the Builder pay the commission in order to save the sale?
3. What, if anything, should the Realtor have done differently?
Case 2 on the Court Docket:
A couple walks into the model, never mentions that they are working with a Realtor, and end up doing a lot reservation before going to contract. They have a home to sell and end up listing their home with a Realtor-friend. Without telling the Buyers, the Realtor-friend calls up and demands a commission since they are friends of hers and she is going to list their home.
1. Should the Realtor be paid a commission?
2. What, if anything, should the Realtor have done differently?