Home > Blogs > BILL CHERRY > Yours truly, Bill Cherry

WHEN CAN I SELL WITHOUT OWING MY AGENT A COMMISSION?

By BILL CHERRY

Real Estate Agent with Bill Cherry, Realtor 0124242

June 18, 2008 02:50 AM

For as long as I've been in the real estate bidniz, and that's now going on 44 years, I've had people ask me this question:

"How long after my listing contract expires must I wait before I am no longer contractually obligated to pay the agent for a sale to one of his clients that he brought by."

And I note that it is one of the most frequently asked questions at the Active Rain consumer Question and Answer site.

You see, for some reason, a lot of potential buyers like to go around their agent. They call the property owner without the agent's knowledge, and here's what they say: "What if I buy your house after the listing expires? You won't have to pay the commission, and we can split your savings."

Sellers make the same calls.

Listing contracts usually address those who are tempted to go that route, by saying, for an example, that any sale that results from a showing during the term of the contract will accrue the commission if the agreement is made within 90 days of the contract's expiration.

But why have we as a society let ourselves be led to believe that our legal obligations and moral obligations are one and the same?

I simply don't understand or accept that rational.

If your work results in a benefit for me, I need to pay you for it. It is corrupt logic for me to attempt to figure out how I can "legally" get out of doing it.

And I'll bet in your heart that you know that the same goes for you.

BILL CHERRY, REALTOR

DALLAS

214 503-8563

Comments(22)

Comment

Show All Comments

Sort:

Joan Mirantz

Homequest Real Estate - Concord, NH

Realtor, GRI, CBR, SRES - Concord New Hampshire

Hi Bill...There is always someone who will try to beat the system...and since they obviously don't place any value on what we do...they don't think our efforts deserve compensation!

Jun 18, 2008 03:53 PM

Steve Shatsky

Dallas, TX

I think that the litigious nature and greed of many poeple make them always on the look out for the loophole. Frankly, I have had that question asked many times and I answer it honestly. Then I usually ask why they would like to list their home with me if they think that is a genuine concern. I work hard for my clients and I earn my commission, but if prospective clients don't see my value then I am just as happy if they choose not to list with me.

Jun 18, 2008 04:53 PM

BILL CHERRY

Bill Cherry, Realtor - Dallas, TX

Broker & Wealth Coach

It's all so interesting.

Bill

Jun 19, 2008 10:13 AM

Tom Burris

NMLS# 335055 - Baton Rouge, LA

Texas/Louisiana Mortgage Pro - 13 YRS Experience

Yes, I see that question a lot too.

If they could do their own loan after I did the footwork, they would try to cut me out to.

Jun 20, 2008 04:18 AM

BILL CHERRY

Bill Cherry, Realtor - Dallas, TX

Broker & Wealth Coach

TOM

You bet they would!

Bill

Jun 20, 2008 08:16 PM

William J. Archambault, Jr.

The Real Estate Investment Institute - Houston, TX

Bill,

Great post. The time to think about these thing is before you have a prolbem.

These things happen, we're dealing with people. Whether it's the sinister evil, naive, or just plain stupid many people don't feel obligated to pay for services rendered. Many feel justified by their view of our (collective) ethics, they just believe cheating is the way it's done.

It's a sorry state of affairs, but all to common. Fortunately, most people will do the right thing, especially when they're caught.

When I was selling real estate, our listing form listed the protection period as a short blank line "____" followed by "months." The practice was to enter "6" .

I listed a lot of homes, but my practice was mostly investment proprieties, expensive properties listed at 10%, so we were talking about serious money. After watching friends get burned, I switched to "60" months, yes five years. I got some flack but no one ever refused. Then I had a seller let a listing expire that I thought we had sold. The buyer, from another office, entered into a long term "lease-option" and they, the buyer and seller announced their intention to wait out the protection period. Case law at the time held that the "lease-option" was not, until excised a sale.

When I had my three years as a salesman I got my brokers license and opened two offices, one on and one off the Board. With our first listing we went to "120" months! No one ever questioned the ten years even though I had them initial it.

No one ever tried to wait out the ten years. I did have a local REALTOR® show one of my properties and convince the seller that he didn't have to pay me if he re-listed the property at 3% after my listing expired, he did and sold the property to his client that he shown the property to in my presents when I had it listed with my non-REALTOR® firm. When the sale was recorded, my partner and I submitted a demand for our 10%, the seller's attorney advised them to pay. The selling broker then complained to the Board demanding I pay him 5%, when they stopped laughing they let him withdraw his complaint. The seller then sued the selling office.

I believe in good contracts they make for good closings! I also believe in people, for every bad experience I can counter with several good ones! My second big sale closed with out a prior sales agreement because the buyer's attorney drew up a 150 page sales agreement, I had to have an O & A so they signed my two pages at closing. I believe we find what we seek, but like the Boy Scouts "Be Prepared!"

Bill

Jun 24, 2008 04:19 AM

Tiffany Burke

Group one real estate - Corpus Christi, TX

Amazing!

Jun 25, 2008 02:01 PM

BILL CHERRY

Bill Cherry, Realtor - Dallas, TX

Broker & Wealth Coach

Hey, Sweet William -- thanks for your great addition to the post. And Miss Tiffany, I know...it is amazing.

Bill

Jun 25, 2008 03:22 PM

Don Eichler

Eichler Properties - Granbury, TX

Bill, I just closed on a purchase of a HUD home for investment and re-sale. I called on another broker's sign to get the information and reviled that I was a broker. Mr. other broker told me you don't need me because you can purchase this property without me. I told him that yes I did need him because I would not have know about the property if I had not seen his sign. I also told him that I do not participate in other brokers commission when I buy for my own use or resale. He said"Say that again" I have never had a licensed broker or agent not want a part of the commission. Again I told him it is for my investment and I do expect to make my profit when I sell the property but if I was selling one of his listings that would be a different situation. I guess that there are other brokers that deal in the same manner. Of course he gave me very good service and helped to close in a very expedident manner. I resold the property with-in three weeks.

Jul 05, 2008 03:01 PM

BILL CHERRY

Bill Cherry, Realtor - Dallas, TX

Broker & Wealth Coach

Don, you and I absolutely, positively think alike. I have done the same thing more times than I can count, and I've always known that was absolutely, positively the thing to do. Always. And I'm sure of it right this moment. Congratulations! Your Mom and Dad taught you right.

Bill

Jul 05, 2008 03:14 PM

Angelia Garcia

Pure Realtors - Dallas, TX

None of my seller's have ever asked that question? What area do you hear this alot in?

Jul 11, 2008 04:38 PM

BILL CHERRY

Bill Cherry, Realtor - Dallas, TX

Broker & Wealth Coach

Angelia, you must live in a town of angels. For most of the rest of us, we trip over this stuff throughout our careers. It is not as likely to happen in small towns as it is in large ones.

Jul 12, 2008 11:24 PM

Sylvie Conde

Sutton Group-Associates Realty Inc., Brokerage - Toronto, ON

Broker, Toronto Real Estate

LOL Bill ... maybe she lives in a City of Angels, but I don't. :)

The norm here is between 90 and 120 days, which I don't think is nearly long enough; and I sometimes change that, depending on who I'm dealing with and the type of property, etc.

The Buyer Agency agreements have helped with this problem a little bit, because buyers now think twice about going directly to the seller, after having been shown the properties - they don't want to be responsible for paying us the commission ... (and this is assuming we signed them up for a few months).

Jul 13, 2008 12:14 PM

Veronica DeCarolis

Weidel Realtors - Flemington, NJ

Ethics. We are held to a fairly high standard but consumers aren't. I guess that's why we are the professionals. Veroncia

Jul 13, 2008 12:33 PM

Gene Allen

Fathom Realty - Cary, NC

Realty Consultant for Cary Real Estate

I guess I think differently. There has to be some stop time for the contract to end. I guess if you can get 10 years from someone it really means he wouldn't do you wrong in the first place.

Jul 13, 2008 12:36 PM

BILL CHERRY

Bill Cherry, Realtor - Dallas, TX

Broker & Wealth Coach

Sylvie, Veronica and Gene

Thanks for your additions to our thoughts. I'm just appalled that so many people apparently let thoughts like this enter their minds, and then, by golly, entertain them.

My car wouldn't start for some reason recently. I called the Good Year store near my house and asked if they could send someone over here to see if they could get it started, or arrange for it to be towed to their shop. They came.

I don't remember what the deal was, but the reason the car wouldn't start was because I was doing something wrong. It started right up. I asked the charge. "No charge," the fellow said. I wouldn't stand for that as an answer.

I insisted they take a hundred bucks back with them, and wrote the check. Their time and expertise and service shouldn't have become free to me just because I was stupid and couldn't get my car started.

And that's what people should consider when they are trying to rationalize bad behavior like trying to weasel out of paying some real estate guy who did his job but was caught by the paperwork.

And by the way, the Good Year store near Northwest Highway and Ferndale in Dallas is an A-1 car repair shop.

Jul 14, 2008 03:23 AM

MaryAnn Wagner

Wagner Real Estate Group - Galloway Township, NJ

Hi Bill. I may be in the middle of a mess like that right now... on a very high dollar listing...my advice is that when you get your first feeling that your client may not be capable of doing the right thing, you should run... don't walk... run! That right there would have saved me in excess of 10k in advertising alone... not to mention the rest... In the future I plan to be more careful about who I choose to do business with. It's all about integrity... and despite our best efforts as agents we can only do so much.

Jul 20, 2008 06:05 AM

BILL CHERRY

Bill Cherry, Realtor - Dallas, TX

Broker & Wealth Coach

Well, Mary Ann that's terrible news on this Sunday afternoon. I hope it resolves. Very few of mine have not eventually Found Jesus when I wrote them one of my hot letters, and shamed them beyond belief...even bringing in such things as, "What would your mother think if she knew what you've done?"

But you're probably too much of a lady to do that. Don't be too much of a lady to send them a copy of my blog.

Hope it turns out well.

Jul 20, 2008 08:11 AM

Robert L. Brown

www.mrbrownsellsgr.com - Grand Rapids, MI

Grand Rapids Real Estate Bellabay Realty, West Mic

They will get what's coming to them in the end. What goes around surely comes around.

Jul 20, 2008 08:37 AM

BILL CHERRY

Bill Cherry, Realtor - Dallas, TX

Broker & Wealth Coach

Robert, thanks for your comment. We hope that's 100% dependable. And I suspect you're right.

But on the chance that we aren't, maybe we should be more cautious about who we represent and tha our listing contracts are properly filled out. Just a thought.

Jul 20, 2008 02:51 PM

Older Post

Newer Post

Rainmaker
393,812

BILL CHERRY

Broker & Wealth Coach

Real Estate Resources

This is the place where we discuss how to manage commissions from real estate sales so that you will accumulate wealth. Call me 972 677-7098 http://www.parkavenuewealthcoach.com

Comments(22)

BILL CHERRY

Real Estate Resources

Additional Information