What happens if a buyer purchases an apartment and then sometime down the road a broker with whom the buyer has had previous dealings (but who was not instrumental in any way to the purchase) comes out of the woodwork trying to lay claim to the commission? As a potential buyer, I know I've had email exchanges with various brokers whom I've met along the way. Some have been more persistent than... [more]
What happens if a buyer purchases an apartment and then sometime down the road a broker with whom the buyer has had previous dealings (but who was not instrumental in any way to the purchase) comes out of the woodwork trying to lay claim to the commission?
As a potential buyer, I know I've had email exchanges with various brokers whom I've met along the way. Some have been more persistent than others. My concern is, if I decide to buy an apartment do I need to be worried if I've had email exchanges in the distant past about that particular property with another broker, even if that other broker did not 'procure' the apartment (ie, I'd already been aware of the apartment, either from a past listing/sale or from Streeteasy)?
If I decide to not work with a buyer broker and instead work directly with the selling agent, am I setting myself up for problems of this nature?
Any thoughts would be greatly appreciated...
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Response by gcondo
about 15 years ago
Posts: 1111
Member since: Feb 2009
no agreement? no worries (if you ask me)
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Response by West81st
about 15 years ago
Posts: 5564
Member since: Jan 2008
Once an offer is accepted, ask the listing agent for a copy of the deal summary sheet. As long as it doesn't list a "Selling Agent" or "Buyer's Broker", all parties are moving forward on the understanding that you are not working with a broker. Unless you've strung a broker along pretty egregiously, you shouldn't have a problem. If in doubt, ask your attorney.
By the way, the person you referred to above as the "selling agent" is technically the listing agent.
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Response by kkillian
about 15 years ago
Posts: 1
Member since: Oct 2009
The most important part here is if any agent did any material work for you. If they are the ones who arranged for and/or showed you the apartment that you decide to purchase even if you saw it on the internet prior, then they should get the commission on the deal. If the only thing you did was discuss properties that you have seen on the internet and you never physically entered the property with them or via their arranging the showing or providing schedules for open houses, then they have no right to claim anything.
Now, considering that you will be paying for a buyer's broker's services no matter what you do if you purchase an apartment from a listing agent, you might as well utilize their services. Why? All commissions are negotiated up front, prior to the apartment being listed for sale and are not negotiatable once purchase negotiations begin. And, neither the seller or the listing agent are going to tell you what the commission is. Please find that attached to understand your rights when utilizing a buyer's agent or do a direct deal with a listing agent (Dual Agency) in NY. This form is now required in Manhattan as of Jan 1, 2011 for use with all listings, and with all buyers after any substantive discussion regarding purchasing or showing apartments. It is only a disclosure and is not a contract, but you should understand better the territory that you are working in if you are going to go it alone (see link http://www.dos.state.ny.us/forms/licensing/1736-a.pdf). kkillian@bondnewyork.com
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Response by bramstar
almost 15 years ago
Posts: 1909
Member since: May 2008
Thanks for the replies. To be clear, any property I ever entered with a broker, or which a broker actually procured for me was clearly documented as such.
My worry is about the possible couple of times brokers have emailed me about this or that apartment (of which I was already aware and likely even had visited prior), perhaps going so far as making a query about it, but then nothing came of it. What happens if months later I revisit one of these apartments on my own and decide to move forward without a broker, instead negotiating the deal myself? In my opinion, the listing agent should in that case get the commission since he/she has done all the legwork on the deal (showing it to me, fielding my calls, answering my questions, etc.). Am I correct here?
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Response by West81st
almost 15 years ago
Posts: 5564
Member since: Jan 2008
bramstar: You are correct. Further, if there were ever a dispute, it would be between the two brokers. Not your problem.
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Response by bramstar
almost 15 years ago
Posts: 1909
Member since: May 2008
Thanks, West. I'd been under the impression that such a dispute would be against me, that by signing a contract saying there was only one broker on the deal I would essentially be taking responsibility.
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Response by front_porch
almost 15 years ago
Posts: 5316
Member since: Mar 2008
to add one thing to what West81st said: the buyer's broker who gets paid is the one who "puts in" the offer (one more reaaon the industry uses written offers as a standard).
If you put in an offer yourself, you are electing to have no representation. If you know now that's what you what to do, the ethical thing to do is to tell potential buyer's brokers that.
The listing agent on a property keeps records of who visits, and who registers their clients. The potential for hairiness comes up if you go to see, say, a Corcoran-listed property, with a, say, Elliman agent, and then you put in an offer yourself but Corcoran feels the need (from a long-term-relationship point of view) to pay Elliman.
But if you're not working with a broker who is registering you and running around to properties with you, you won't have that problem.
ali r.
DG Neary Realty
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Response by West81st
almost 15 years ago
Posts: 5564
Member since: Jan 2008
bramstar: I'm not a lawyer, so all I can offer is my personal opinion. I do see your point: the contract identifies the brokers, so by signing the contract you are, to some extent, a party to the act of shutting the second broker out. I suppose anyone can sue you for anything if they have a sufficiently big axe to grind. As a practical matter, though, I think it would be a waste of time for the broker to come after you unless there's compelling evidence of his/her role in the transaction. A REBNY grievance against the listing agent might be a more promising avenue, though I doubt that would pan out either, under the circumstances you have described.
I've personally never heard of a broker suing a residential buyer. Suing a seller? Sure, because the seller and listing agent have a contract. (I believe a certain BHS broker considers lawsuits of this kind an essential business tool.) Suing a buyer, without being personally involved in the specific transaction? Seems like a reach, given the informal nature of the relationship. On the other hand, there's a high probability that an aggrieved broker might harrass or threaten you, even if he doesn't have a claim that would hold up in court.
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Response by commoner
almost 15 years ago
Posts: 197
Member since: Apr 2010
West81st, there was a case of a broker, an unlicensed at that, suing the buyer who happened to be Seinfeld. On the other hand, on many, many occasions I had to be quite firm with several brokers who tried to cut themselves into my (buying) transactions without having any input into the deal.
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Response by realestatejunkie
almost 15 years ago
Posts: 259
Member since: Oct 2006
I am going to be the contrarian here Bramstar and say you are setting yourself up for trouble.
Just because their efforts were minimal on your behalf don't think they won't be looking for a commission.
Standard purchase agreement will call for you to idemnify the seller (take responsibility) in the event any claims arise from a broker working on your behalf.
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Response by front_porch
almost 15 years ago
Posts: 5316
Member since: Mar 2008
The Seinfeld case is a little different: supposedly the broker in question was working with the couple's manager, and had seen the house once with him, and once with Ms. Seinfeld. Broker had a co-broker agreement with the listing broker, and clearly believed that she was working with the couple, who bought on a third visit without her.
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no agreement? no worries (if you ask me)
Once an offer is accepted, ask the listing agent for a copy of the deal summary sheet. As long as it doesn't list a "Selling Agent" or "Buyer's Broker", all parties are moving forward on the understanding that you are not working with a broker. Unless you've strung a broker along pretty egregiously, you shouldn't have a problem. If in doubt, ask your attorney.
By the way, the person you referred to above as the "selling agent" is technically the listing agent.
The most important part here is if any agent did any material work for you. If they are the ones who arranged for and/or showed you the apartment that you decide to purchase even if you saw it on the internet prior, then they should get the commission on the deal. If the only thing you did was discuss properties that you have seen on the internet and you never physically entered the property with them or via their arranging the showing or providing schedules for open houses, then they have no right to claim anything.
Now, considering that you will be paying for a buyer's broker's services no matter what you do if you purchase an apartment from a listing agent, you might as well utilize their services. Why? All commissions are negotiated up front, prior to the apartment being listed for sale and are not negotiatable once purchase negotiations begin. And, neither the seller or the listing agent are going to tell you what the commission is. Please find that attached to understand your rights when utilizing a buyer's agent or do a direct deal with a listing agent (Dual Agency) in NY. This form is now required in Manhattan as of Jan 1, 2011 for use with all listings, and with all buyers after any substantive discussion regarding purchasing or showing apartments. It is only a disclosure and is not a contract, but you should understand better the territory that you are working in if you are going to go it alone (see link http://www.dos.state.ny.us/forms/licensing/1736-a.pdf). kkillian@bondnewyork.com
Thanks for the replies. To be clear, any property I ever entered with a broker, or which a broker actually procured for me was clearly documented as such.
My worry is about the possible couple of times brokers have emailed me about this or that apartment (of which I was already aware and likely even had visited prior), perhaps going so far as making a query about it, but then nothing came of it. What happens if months later I revisit one of these apartments on my own and decide to move forward without a broker, instead negotiating the deal myself? In my opinion, the listing agent should in that case get the commission since he/she has done all the legwork on the deal (showing it to me, fielding my calls, answering my questions, etc.). Am I correct here?
bramstar: You are correct. Further, if there were ever a dispute, it would be between the two brokers. Not your problem.
Thanks, West. I'd been under the impression that such a dispute would be against me, that by signing a contract saying there was only one broker on the deal I would essentially be taking responsibility.
to add one thing to what West81st said: the buyer's broker who gets paid is the one who "puts in" the offer (one more reaaon the industry uses written offers as a standard).
If you put in an offer yourself, you are electing to have no representation. If you know now that's what you what to do, the ethical thing to do is to tell potential buyer's brokers that.
The listing agent on a property keeps records of who visits, and who registers their clients. The potential for hairiness comes up if you go to see, say, a Corcoran-listed property, with a, say, Elliman agent, and then you put in an offer yourself but Corcoran feels the need (from a long-term-relationship point of view) to pay Elliman.
But if you're not working with a broker who is registering you and running around to properties with you, you won't have that problem.
ali r.
DG Neary Realty
bramstar: I'm not a lawyer, so all I can offer is my personal opinion. I do see your point: the contract identifies the brokers, so by signing the contract you are, to some extent, a party to the act of shutting the second broker out. I suppose anyone can sue you for anything if they have a sufficiently big axe to grind. As a practical matter, though, I think it would be a waste of time for the broker to come after you unless there's compelling evidence of his/her role in the transaction. A REBNY grievance against the listing agent might be a more promising avenue, though I doubt that would pan out either, under the circumstances you have described.
I've personally never heard of a broker suing a residential buyer. Suing a seller? Sure, because the seller and listing agent have a contract. (I believe a certain BHS broker considers lawsuits of this kind an essential business tool.) Suing a buyer, without being personally involved in the specific transaction? Seems like a reach, given the informal nature of the relationship. On the other hand, there's a high probability that an aggrieved broker might harrass or threaten you, even if he doesn't have a claim that would hold up in court.
West81st, there was a case of a broker, an unlicensed at that, suing the buyer who happened to be Seinfeld. On the other hand, on many, many occasions I had to be quite firm with several brokers who tried to cut themselves into my (buying) transactions without having any input into the deal.
I am going to be the contrarian here Bramstar and say you are setting yourself up for trouble.
Just because their efforts were minimal on your behalf don't think they won't be looking for a commission.
Standard purchase agreement will call for you to idemnify the seller (take responsibility) in the event any claims arise from a broker working on your behalf.
The Seinfeld case is a little different: supposedly the broker in question was working with the couple's manager, and had seen the house once with him, and once with Ms. Seinfeld. Broker had a co-broker agreement with the listing broker, and clearly believed that she was working with the couple, who bought on a third visit without her.
I believe that she won that case.
ali r.
DG Neary Realty