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Without a buyers representation agreement you are considered a sub-agent (NOT) and sub-agents typically do not get paid in this market (I AGREE)

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Real Estate Agent 0488515
  • I am having a back and forth debate with one of my most favorite people here at Active Rain about working with a buyer who does not sign a buyers rep agreement. 

    Apparently he recently went to a class and the instructor said if you do not have a signed buyers rep you are automatically a sub agent for the buyer.

    Below is a question that was asked and answered at the Texas Association of REALTORS®.  I have also included a link the the web site.

  • If I am going to act as a buyer's agent, must I have a written buyer's representation agreement? (updated Sept. 16, 2009)
    • While the relationship between a broker and a client can exist without the necessity of a written document to memorialize that relationship, there are many reasons why a broker-client relationship should be in writing. Those reasons apply whether the client is a seller or a buyer or whether we are discussing listing agreements or buyer representation agreements.

 

•1.        1. Section 1101.806(c) of the Real Estate License Act provides that a broker may not sue for the recovery of a commission unless there is a written agreement signed by the person agreeing to pay that commission. In other words, unless you have a written agreement signed by a seller or buyer agreeing to pay your commission, you cannot enforce your right to collect your commission from that person.

•2.        2. If a broker's practice or office policy permits the broker to act as an intermediary (i.e., the broker has a broker-client relationship with both the seller and the buyer in the same transaction) then Sec. 1101.559 of the Real Estate License Act requires that the broker obtain the written consent of each party and that written consent must also state who will pay the broker. The Texas Association of REALTORS® buyer's representation agreements and listing agreements have provisions which include the necessary written consents and other statutory requirements for a broker to act as an intermediary.

•3.        3. It is just good business to reduce to writing the rights and obligations of the broker and his client to insure a meeting of the minds of the parties as to all the essential terms of those rights and obligations. Furthermore, Article 9 of the Code of Ethics requires that REALTORS® shall assure whenever possible that agreements shall be in writing for the protection of all parties.

 

http://www.texasrealtors.com/MR/Legal/FAQs/Agency/BuyersRep.cfm

Comments (12)

Greg Nino
RE/MAX Compass - Houston, TX
Houston, Texas

Hey Richard..

I'm glad you posted this. If OUR association has instructors teaching MANY people wrong then damn us. This wasn't any ordinary ethics class btw. This was a training/ethics class to be on the Grievance Panel! I'm so going to look in to this.

Nov 19, 2010 07:41 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Greg,

Thanks for your comments.  I have been a TREC instructor for six years, and if there is something I am not 100% sure of I do my research before I make any type of blanket statements.

I am also happy to hear you are going to liik in to this.

Nov 19, 2010 08:02 AM
'The Diamond Group' 'A Cut Above The Rest'
The Diamond Group @ Keller Williams - Lubbock, TX
Lubbock Texas Real Estate

Richard, it is just good practice to have everything in writing..........................!

Nov 19, 2010 01:00 PM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Elizabeth,

I could not agree more with your statement.  The statement I do not agree with is "if you do not have a signed buyers rep you are automatically a sub agent for the buyer."

If you make that statement that is an indication of your business decision.  Not part of the law of agency.

Nov 19, 2010 10:29 PM
Steve Shatsky
Dallas, TX

Hi Richard... I was inclined to agree with the original post, but you have put forward a compelling case.  Now here's some food for thought!  I am due to attend the training class that Greg attended and will see if this comes up in there... I am bringing a copy of your post and references with me!

Nov 20, 2010 07:27 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Steve,

Thanks for your comments.

If it comes up in you class I would love to speak with that instructor.

Nov 20, 2010 08:24 AM
Ron Wickes
Keller Williams - Broker Associate - Conroe, TX

I agree wiith Elizabeth..........everything in writing. Emails and all go into my final files.

Nov 20, 2010 11:34 AM
Ricki Eichler McCallum
CastNet Realty - Corpus Christi, TX
Broker,GRI,ABR, e-Pro, TAHS

Hi Richard,  I wrote a blog not long ago about this very thing.  I said no buyer rep, no paycheck in our area and boy, did I get comments.  That is how it is in my office and most offices here in the Hill Country.  Will be so glad when all agents learn to get it in writing before they show property.  No surprises, is nice!

Nov 20, 2010 12:54 PM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Ron,

Thanks for your comments.  No argument from me on that point.  Always best to get it in writing.

Nov 22, 2010 09:15 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Ricki,

Thanks for your comments.  I remember that blog well.

Nov 22, 2010 09:16 AM
Ed Newman
Alamo Infrared, LLC - Midvale, UT

Thanks for this great information, I'll be sure and pass it on.

Dec 11, 2010 09:48 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker
Ed, as always - thanks for the comments, we appreciate your continued support
Dec 12, 2010 12:15 AM