Expert: liznarr - 3/9/2008

Question
Several months ago I placed my home on the internet.  I was contacted by a couple who came to see the house.  several days later they called and said they were interested and would I mind talking to their agent.  I agreed an he came by and looked at the house.  Aweek later he called and said his clinets wanted to come by thehouse again which they did(last Wednesday).  The agent contacted me and said he had an offer.  He stopped by tonight we went over the offer and I agreed to the offer price and signed the documents.  then after that was done he said I need you to sign this agreement the fee is 4%.  I said you never said anything about this in the 3 times you were here then at the end you want 4%.  He said the buyers agreed to pay him but if they had to then the offer was no good and would have to be 4% less.  He took the signed agreement and walked out. If I read the NAR ehtics code he should hebve discusseed if he was looking for money from me at the start not aftyer coming 3 times and then waiting till after I signed and offer.  I believe article 16-11 covers this.  I don't know if the buyers agreed to pay hom and if so would they not have considered that in their offer.  Not sure if maybe he was trying to get money from both of us.  Do you feel this is unethical and should I file a complaint with NAR or the real estate commision of PA?  Can I contact the Buyers and ask them if they knew he did this?  Looking for any guidance.

Answer
Hi Robert,

Sorry for the delay in responding.  Real estate had been incredibly busy in the last few days for me.

Yes, this agent was, in my opinion, both highly unethical and operating illegally to have you sign a Contract of Sale and then ask for 4% commission AFTER the fact – especially also telling you, again, AFTER the fact that if the buyers had to pay him, the offer “was no good.”

You didn’t mention agency disclosure and whether or not this agent
(1) Discussed with you IN ADVANCE OF THE OFFER whom he was representing, and (2) Had you sign an agency form prescribed by the Pennsylvania Real Estate Commission – both of which should be required actions of licensed agents in Pennsylvania.  (I say “should be” because I have not had time to read PA Real Estate Law in its entirety, but many states have laws/rules with similar language when dealing with matters such as this.)

I did a cursory review of the PA Real Estate Act 15 and believe that Sections 606.1 and 608 (a) were violated by this agent by his NOT discussing with you on his initial interview with you (face-to-face meeting) the fact that he might have been expecting a commission from you.

Not knowing all the facts in your situation, I would suggest that you read the above sections and also determine if you believe this agent violated any others.  You can view PA Real Estate Act 15 at
http://www.dos.state.pa.us/bpoa/lib/bpoa/20/real_estate_comm/real_estate_act_15....

This agent clearly violated the Code of Ethics of the National Association of Realtors.  You should take up any complaint you wish to file with the local Board of Realtors this agent might belong to.  

Realtor associations can only fine and punish Realtors (or revoke their Association membership), but the Pennsylvania Real Estate Commission is the agency with TEETH.  In a severe situation – or if an agent has continuous, repeated offenses – the Real Estate Commission can suspend or revoke an agent’s license to practice real estate, in addition to assessing a fine.  

Real Estate Commissions exist for the protection of the public, YOU; and you clearly need protection from an agent practicing real estate in the manner you described.

In answer to your question about contacting the buyers, I don’t see any harm that could be done from making that call.  The more information you have when you contact the Pennsylvania Real Estate Commission, the better you can convey your facts to them.

Telephone numbers for the PA Commission are on their web site at

http://www.dos.state.pa.us/bpoa/cwp/view.asp?a=1104&q=433107&papowerNavDLTEST=%7...

Good luck to you, and feel free to write again if you have additional questions.

Regards,
Elizabeth