You’ve heard of ‘cruelty to animals’ but have you heard about ‘cruelty to realtors’? It happens, and it just happened to me!
Some years ago, the real estate industry developed a document titled ‘Buyer Agency Agreement’. It was/is intended to be used when a Realtor works with a buyer and assists with the purchase of a property. Realtors are supposed to complete this form at the earliest possible time, but certainly, before an offer is presented. The purpose of this form, I believe, is to ensure that a Realtor gets paid for his/her time, effort and expertise.
‘Buyer Agency’ does not have to be in writing, it can be ‘an understanding’ between a Realtor and his client(s).
As someone who takes pride in providing exemplary service in all that I do, it is of great distress to me when a client takes advantage of me and my trust in them. But how I could have so totally failed to educate my clients ‘how I get paid’ leaves me stunned and in a total state of shock.
What happened is this … a few years ago, I sold a house on Leeming Avenue for Jess and Rob. We worked as a team and I helped them to ‘fluff’the house so that its presentation was the best it could be. Painting walls and trim was something that Jess did with some expertise, so that was her job. Rob helped to move furniture from the basement and place it a bit more strategically. I provided some paintings and flowers and a few furniture items. Showings started at the open house (2:00 PM on a Sunday) and multiple offers were received as scheduled; their house was sold for well over the asking price. Rob and Jess were pleased and provided a lovely testimonial.
After that house was sold, they told me about a house they owned at 3 Acme Street .. a bungalow that they had bought and then changed their minds about moving into …. They shared with me that they tried to sell it on their own for awhile with no success; they had listed it with a Realtor and it did not sell then either. They then asked me if I would list it. Of course I said I’d be happy to but by that time it was rented. Showing a house that is tenanted is never ideal and the asking price was a tad on the high side. Again, it didn’t sell. The listing was cancelled and they relisted with another Agent at the end of the lease term. They had one offer which fell through. Then they called me again. But this time, it was to list not only 3 Acme Street but also another house they had purchased at 2 Birch Crescent. They felt that if they listed both houses the chances of one selling would be greater, and whichever one sold first … they would move into the other one. Well, before either one had an offer, they decided they would move from 2 Birch Street to 3 Acme Street. Boxes were packed and moved. But then … wouldn’t you know. An offer came in on Acme. So they moved the boxes back to Birch Street. The offer on Acme did not proceed due to financing. But meanwhile, an offer was received on Birch Street. So Jess and Rob again packed up and moved back to Acme on closing of Birch.
I really thought all was well, but in mid-November I received a phone call from Jess to ask if I would list their house at 3 Acme Street, and do it for a reduced commission IF they bought another house from me. Reducing my commission is not something that I, nor any Realtor likes to do, but I had sold two houses for these folks and I thought there was trust and a promise of future business. So I agreed to sell it for less – a flat fee of $5000. 2.5% would have been paid to a cooperating Agent. Documents were signed on Thursday, December 17th and the MLS listing went up the next day.
The day after I listed the property (Friday December 18th), Jess and Rob called to tell me that over the past weeks, they had the house on Grapevine and a prospective buyer who had seen the house a couple of times had knocked on the door that afternoon when he saw my sign on the lawn and offered to buy the house for $345,000. They agreed. So they called me and told me they had this buyer and offered me $1000 if I would make up the Agreement of Purchase and Sale for them.
Had they told me that the house was also listed on Grapevine, there could have been a Seller’s Rights Reserved condition added, but they didn’t tell me. I would have been more prepared for this occurrence as well.
I didn’t mention to them that the Listing document provides for payment of commission regardless of where the buyer comes from … I just thought it best to ‘bite my tongue’ and prepare the offer for the buyer and make sure that he was qualified and ensure that all would work out for them … so, with the promise of future business (help them find a new home), that’s what I did. A Commission Slip was signed for $1000. It closes on January 29th.
Once the offer on Acme Street was accepted by Jess and Rob, we started to look for a new house for them. I set them up for auto-notification and also, whenever they saw a house on the public MLS site or if they saw a sign on a house that interested them, they called or emails and I dropped everything, made appointments and showed them the houses. They decided on one on Wood Street, so we negotiated over the weekend before Christmas and they ‘conditionally’ bought it. The inspection was arranged for December 24th, and unfortunately, turned up some negative aspects. So Jess and Rob decided against buying the house. Even while the house on Wood was ‘conditional’, Jess and Rob asked to see other homes. They noticed a sign on 75 William Street listed by another Broker – Cory Crafty (not his real name). They wanted to see it that day but when I checked the MLS system, I noted that showings started on December 27th at the open house which was from 2-4 PM on that day. So I did not make the call to the Listing Agent’s broker to arrange to see the house. They said they would probably go to the open house on Sunday the 27th. (There was a message on the “Messages” section of mlxchange from Jess asking me to ask if they would consider a January 29th closing date … but I did not receive this message. These messages are in response to auto-notifications and not checked regularly. In fact, until this happened, I didn’t even know that one could reply to the mls auto notification and that it landed in this Messages box. Now I check them regularly!)
As it happened, I had a 10-day holiday booked leaving on December 26th. I knew that they would ‘prefer’ to work with me personally, but I felt I left them in good hands with my two associates. Jess and Rob knew that both are/were licensed and capable of showing houses to them and preparing offers. Besides, I told them I could be reached by phone or email; I had my Blackberry with me.
I returned to the office on January 7th to find out that 75 William Street was sold to Jess and Rob with the Listing Agent as the sole Realtor involved and BEFORE the open house on December 27th even began.
My dilemma is two-fold. 1) Because of the ‘trust and the understanding’ that I felt existed between Jess, Rob and myself, I did not have a Buyer Agency Agreement in place. I am disappointed with them in many ways, not just because I will earn no commission for my services but with them as people. I am angry with myself for placing undeserved trust in them. Undoubtedly, this hurt that I feel will go on and affect my relationships with other buyers for a very long time. Certainly a lesson has been learned: I will, in future, insist on Buyer Agency Agreements in all cases. I have no choice.
2) The other issue is …. how this could have happened? … the Realtor Remarks on the MLS listing stated clearly that there was an open house on Sunday, Dec. 27th from 2-4 PM and that showings started on December 27th at 2:00 PM. It appears that Cory Crafty breached the MLS Code of Ethics by not only 1) showing the house on 75 William Street before the 2:00 PM start date December 27th (I assume that Jess and Rob must have seen it before asking him to prepare an offer for them), and 2) by facilitating an accepted offer between Jess and Rob and the Seller before the 2:00 PM start time.
I believe these to be serious errors on the part of Cory Crafty and I will certainly report this to the Ottawa Real Estate Board. All Realtors have to respect the conditions that are put in the Realtor Remarks. Ignoring them is not to be taken lightly. Cory was not fair to his clients, and other Agents (like me) may have been waiting to show the house to prospective buyers; the Seller may have received competitive bids and therefore more money for their home.
Jess and Rob are another story … they tell me that they were ‘desperate’, and the house on William isn’t really what they want, so in March or whenever they find out whether Rob still has a job (possibly in jeopardy due to HST introduction), they will call me to list this house and then, buy another house … using my services, of course! How much faith do you think that I have that this will happen? They paid about $25,000 too much for the house according to the comparables. There is no way they could sell it for the same price in March plus enough to pay a Commission to me. I don’t know about you, but I don’t have the least desire to work with people like Jess and Rob ever again!
In real estate, as in so many other commission types of professions, we often have to just ‘grin and bear it’. It seems so unfair. I wonder how Rob and Jess would feel if they worked for an employer who decided not to pay them for their work for a couple of weeks, and instead, give it to an associate for preparing one document for them. Or, what if they decided that they were going to pay their Accountant’s associate for his work, instead of for the Accountant that they used. Yes, I know that Jess and Rob are probably the exception … they somehow just don’t get it – is it my fault for not educating them about how I make my living, I wonder … after all this, should I still believe that most people are fair-minded … I don’t know … right now, I’m finding it very hard.
