I’m sure there are several variations on this theme depending on which State in this Union you practice your profession, but the cause and effect are almost always the same when it comes to determining who earned the commission on a real estate deal. This subject is always a great conversation starter amongst us real estate pundits but may be one of the more misunderstood issues in our industry. Let’s take a gander at a couple of instances and the basis for determining the root of who was the procuring agent or broker.
Estrangement and Abandonment
These two terms are the basis for shaping the outcome of who is due the commission. And, it’s not always as easy as saying, “I wrote the deal so I get the commission.” If there is any question who originally brought the buyer to the attention of the seller or vise versa, one must look at any break in the chain between when the buyer or seller where first introduced to each other and was there any reason they didn’t consummate a deal while in your charge. First let’s look at Estrangement. Was there anything you said or did…or didn’t say or do that caused either party to not close the deal? One case study had a buyer’s agent go after a commission when the folks she was working with bought a house she showed them using another agent. The case goes on to show the buyers had requested their first agent help them with finding a lender for a house they wanted to make an offer on. Despite the first agent’s efforts, the buyers were unable to obtain financing and the deal died. Subsequently, the buyers moved on and the first agent thought that was that. The buyer’s then made an offer on the same house with another agent and the deal eventually closed. It was determined the first agent was not due a commission because the first agent was unable to help their client obtain financing which amounted to estrangement of the parties.
A second case study focuses on abandonment and was more interesting because the first agent did everything right and was found to be the procuring cause of the buyers finding the house they eventually purchased. In this case, a fairly new agent was working with some buyers when she explained to them she was going to be out of town for a week on vacation but that here Broker was available and would be happy to assist them if they saw something while she was gone. On her return from vacation, she had learned her buyers had made an offer on a property she had shown them prior to her holiday. It turned out the buyers lender (who the buyers had a relationship before they met the first agent) had referred the buyers to a ‘colleague’ who eventually wrote up the deal. After closing, the first agent went after the commission and proved that there was no break in the chain and that she made every effort to make sure her buyers were in touch with her Broker while she was away. Because she was diligent and kept an impeccable paper trail of all here correspondences, it was determined there was no abandonment by proving through emails and phone records she did remain in contact with her buyers throughout the course of their relationship and she won her case and got her commission. (By the way, these case studies were determined before our MLS had Exclusive Buyer Agency Agreements in place)
How about on the Sellers Side of the Deal?
Here things are a bit more black and white (at least in the State of Washington) due to exclusivity of the agreement between the Listing Broker and the Seller. That said there are still instances where the first listing Broker will still be due a commission if the house sells even after the listing agreement expires. There is a provision in our listing agreements that states: Further, if Seller shall, within six months after the expiration of this Agreement, sell the Property to any person to whose attention it was brought through the signs, advertising or other action of Broker, or on information secured directly or indirectly from or through Broker, during the term of this Agreement, Seller will pay Broker the above commission. Sounds like if you take an expired listing in Washington, you better be certain you know whose been in the property, seen the for sale sign, read the newspaper or been on the internet looking at houses…or you may be up against a procuring cause issue when you sell the house!
So, I’d love to hear about how this subject works in the state where you work and live. Have you had an instance where procuring cause affected you? Any case studies you know of that you’d like to share?
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
Idea: Color-coded face masks as the new social contract to combat COVID-19
New company beats Amazon with next morning delivery?
Gloves that translate sign language in real time
What to do when you can’t find your passion and you’re feeling lost
Google plans to pay publishers for content (a little too late)?
HEROES Act could increase unemployment stimulus benefits, add return to work bonus
LinkedIn: New retargeting options expand your marketing efforts
A closer look at the HEROES act, and who stands to benefit the most
The future of quantum computing is “Azure” bright and you can try it
The Apple Watch isn’t just a way to ignore calls, it could save your life
Anti-surveillance mask – creepy, ingenious, or potentially illegal?
Amy’s Ice Cream founder on Austin’s business risks and rewards #WhyAustin
Turns out a lot of people are in between introverted and extroverted
P. Terry’s founder on the booming economy in Austin #WhyAustin
Ladies and gentlemen, the U.S. National Anthem
Our Great Partners
news neatly in your inbox
Subscribe to our mailing list for news sent straight to your email inbox.
Thank you for subscribing.
Oh boy... Something went wrong.
Tech Gadgets2 weeks ago
Google Glass didn’t succeed, but Apple’s AR glasses might
Business Marketing2 weeks ago
2020 changed everything, maybe your B2B marketing should change too
Opinion Editorials1 week ago
Managing bipolar disorder and what I wish my employers understood
Business News1 week ago
How well-meaning diversity and inclusion hiring practices could backfire
Politics1 week ago
The White House pushes for $450 per week return to work bonus
Tech News1 week ago
Data Dividend Project wants you paid for companies to use your data
Business Marketing1 week ago
Can small businesses keep up as more big box brands offer $15/hr pay?
Business News2 weeks ago
Many tech firms will let employees work from home until 2021