The Market Is Changing

Jun 03, 2016

After having endured years of a real estate market ruled by the buyers, the sellers now seem to be flexing their muscles! Based on the types of questions coming into the Helpline recently, it is apparent prices are heading upward and sellers are finding a new strength. Here are samples of the inquiries I have recently received:

 Q. I am a buyer's agent and lately I am noticing that listing agents are taking office exclusives and not putting the houses on MLS. I have buyers who would like to see these houses but many of the listing agents refuse to allow me to show. Can they do that?

 A. No! The Department of State, in a series of opinion letters dating back to 1999, has consistently stated that sellers may not refuse to allow a buyer to be represented when that seller is represented by an agent. Therefore, it would be an unlawful instruction for the seller to tell the listing agent to keep buyer agents out of their homes. This does not, however, mean a listing broker must co-broke the listing with agents who want to represent the seller, since the vicarious liability the seller and agent may have for the actions of the sub-agent may be something neither the seller nor agent wish to take on.

Q. I represent a number of buyers and always identify myself as a buyer's agent when I call listing agents to make appointments to show houses my client's would like to see. The listing agents often ask to see my signed agreement and buyer agency disclosure. I usually do not have an agreement, just the disclosure. What do I do?

A. The listing agent is only entitled to get an agency disclosure that is filled out to show that you work for the buyer as a buyer's agent and that he/she can give to his/her seller for the seller to sign. The listing agent, however, is never to be given the disclosure signed by your buyer. Furthermore, the listing agent has no right to see any contract you may have with your buyer.

Q. I always work as a buyer's agent, but buyers never want to sign an agreement. I just have them sign the agency disclosure. Is this all I need?

A. You can represent a buyer whenever you want, whether he signs an agreement or not. But you run the risk of doing a great deal of work with no commission earned if a buyer has not promised to pay you and the seller and listing agent agent have not offered compensation to buyer agents.

Q. My buyer made an offer on a property that the seller said was acceptable. The buyer had an inspection and then the listing agent said there was a higher offer and the seller was going to take it unless my buyer was willing to pay what the other buyer offered. Is that fair? And, is the buyer entitled to get the cost of the inspection back if the seller takes the second offer?

A. Fair to whom? The listing agent has an obligation to bring all offers to the seller and, if the seller wants the higher amount, the listing agent is fulfilling the fiduciary duty owed to the client to obtain the highest price and best terms possible. Your buyer has an opportunity to raise his offer and/or improve the terms.

Q. My buyer made a full price offer and then the seller raised the price of the house. Aren't I owed a commission?

A. Probably not.

Q. My buyer has an accepted offer then had an engineer's inspection which showed some problems with the house. The seller refused to make the repairs or lower the price and subsequently took another buyer's offer. My buyer wants to put a lis pendens on the property and sue the seller because they had a meeting of the minds. Will the buyer win?

A. The Statute of Frauds says a seller is not obligated to sell to a buyer unless there is a signed writing containing a promise to do so. If the buyer were to place a lis pendens on the property, the buyer and his/her lawyer could be sanctioned by the Court and made to lift the lis pendens. Incidentally, the accepted offer itself was nullified by the buyer the minute the buyer asked to change the terms of the offer the seller had accepted.

Q. Can a seller decide to raise the listing price and lower the commission offered to cooperating brokers once the property is placed on the MLS?

A. Certainly!

Q. Lately, when I make listing presentations, the sellers are asking me to reduce my commission and telling me that other agents are willing to work for less than the amount I quote as my fee. Why can't we all agree to keep commissions at a certain amount and refuse to take less?

A. You can, but then you will go to prison for violating Federal Anti-Trust Laws!

Until next time, be careful out there!