Dissension amongst the ranks rears it’s ugly once again. It would seem that some agents, we will call them “agent X’ers”, are adding their own addenda to the, already confusing, CAR Listing contract in our Santa Clarita Valley.
The shell game
The issues that have been caused can relate to a seller thinking that, the agent or team they chose to sell their home, were not as “capable” as they said they were. When it comes to cancelling the listing with them, the listing agent had the seller sign documents that say the seller, or the next broker you choose, sells said home,(insert time period here – I have seen as much as 3 years from the date of cancellation), Thereby owe the listing agent or listing team a commission.
Breaking it down
So to clarify. You as a Real Estate seller basically fired the agent that was representing you because of something you did not like, maybe it was performance or neglect related. You then, still wanting to sell your home, contact another agent or team that you think will be a better fit for you and yours in the sale of your real estate. Things go GREAT, the second time around was a perfect fit, this new real estate agent or team kept in contact with throughout the sale process, answered all of your questions and was able to “negotiate” the treacherous waters that is residential real estate resale.
Within a month of closing, Unbenounced to you, the agent that successfully sold your property, gets a phone call from your prior listing agent. Here is how that conversation might go:
The Phone Call
Prior agent: Hey, I know you just closed escrow on 1234 Anywhere Street in Valencia. Congratulations. Great Job, I was calling to find out when I can expect my check for the commission?
New agent: Excuse me?
Prior agent: It’s in the contract that I had the seller sign when I took their listing, before they cancelled (or it expired – either way works). The seller agreed to pay me a commission for a period of 3 years, even it the home sale was cancelled with me and listed with another agent(you).
New agent: Are you serious? That does not apply to me, the “deal” between the seller and you, at the time of the listing signing, has nothing to do with me.
Prior agent: I totally understand, I have an attorney on retainer and we are going to sue you for the commission owed. I would suggest that you contact your seller and find out how they are going to pay me or pay you back if they decline the document they signed.
You as a seller signed something, that probably sounded good at the time. Maybe you did not read it or maybe the agent you hired did not explain it “on purpose”. Bottom line you signed your name to something that is going to create “drama”. If you are anything like me, I hate extra drama.
Your current agent, the one that succeeded where your previous one did not, has also been placed in a tough spot. If it were me, this might be my thought process:
- Is this enforceable to have me pay a commission on a document that I was unaware that existed? Probably not.
- Am I going to call up my seller and let them know? Absolutely.
- Am I going to let my seller pay for this out of their pocket? Probably not.
- How can this be prevented? Through education of Real Estate Sellers teaching them to never sign anything without reading it and having it explained.
- Further prevention – By making sure other agents, that are accepting Listings from Real estate sellers, know this game exists and to have them ask for a copy of the prior real estate contract to include all of the additional forms that were signed.
Heading them off at the Pass
If this were to be found out to be true and a seller came to us after cancelling their listing or having a listing expire with another agent, we will ask for a copy of the prior contact, just to make sure. We would ask questions as to what was signed and if it differs from what they, the sellers, are signing with us.
If it is found to be true, as in the scenario I just described, I would contact the other agent and get a retraction in writing. If they refused I’d get the brokers involved (the companies), if an agreement was unable to be reached – the listing between the Seller and our Team would probably not be taken.
How to prevent this
Read everything you sign as a seller. When we talk to buyers, Paris is fond of saying to our clients, “You are not buying a pair of shoes.” The same goes to sellers, this is not eBay, this is the Big Time and you owe it to yourselves to read and re-read before placing your signature on the dotted (or solid) line.