The Market is on Fire!

Jun 03, 2016

Here are some Issues that have recently been brought to the Legal Helpline.

Q. A flat rate broker listed a property which I sold. I dealt directly with the seller pursuant to the listing instructions. Now the seller refuses to pay me and we are closing this week. What do I do?

A. You contact the flat rate broker and tell him you are bringing him to Arbitration to collect the commission he promised to the selling broker on the MLS.

Q. Do I have a fiduciary duty to cut my commission if it will make the deal?

A. No!

Q. Do I have a fiduciary duty to co-broke an exclusive?

A. No, but the Department of State requires you to cooperate with buyer brokers even with an exclusive, although you do not have to offer compensation to the buyer broker.

Q. Do I have to cooperate with buyer brokers who are not MLS participants and am I required to pay them what I offer to buyer brokers on the MLS?

A. You must cooperate with any NYS licensee who is acting as a buyer broker but you are only bound to compensate those agents you have agreed to pay. 

Q. Do I owe a commission to a cooperating agent if the seller takes an offer from that agent's buyer and then takes a higher offer from another buyer?

A. No, but the seller may. 

Q. Can I co-broke an open listing?

A. Only if you can get the seller to allow you to do so and the seller agrees to pay both agents on the transaction.

Q. If I am the buyer, do I need to disclose that to the seller?

A. Absolutely! You are required to do so by the Department of State and the Realtor Code of Ethics. The disclosure must be in writing in the binder and the contract of sale. In addition, if you want to get paid in the transaction, you may only do so as a buyer's agent and the payment must be made to your broker.

Q. Can I purchase a short sale?

A. You may, but you must act as a buyer's agent and you must disclose that you are a licensee. Furthermore, the bank may have a policy of refusing to pay a buyer if he is a licensee, so you and your broker might not be paid in the transaction. Therefore, you should discuss your planned purchase with your broker before you make your offer.

Q. Does my broker have to be paid when I purchase a house?

A. That's between you and your broker.

Q. Will I get paid on listings or deals I have in contract when I leave an office?

A. That depends on the agreement in place between you and your broker.

Q. Can my broker and I have an oral independent contractor's agreement?

A. The safe harbor guidelines require written independent contractor agreements signed at least every 15 months.

Q. I brought a buyer to an MLS listing and the buyer made an offer on that house through me. Previously that same buyer had looked at other houses with the listing agent, although he had not shown her the house she made the offer on through me. That agent called her and told her she could only buy that house through him, she withdrew her offer through me and I see she closed on that house the other day with the listing agent showing as the selling agent as well. What can I do?

A. You can bring Arbitration and make an Ethics complaint under Article 3 of the Code of Ethics, citing the other agent's failure to cooperate with you.