Expert: Karyn Foley - 1/14/2009

Question
Hi My daughter and Son-in-law(who built their house and the one they hoped to move into) put one up for sale in order to move in the other. Their "broker" put the property up for sale for $320k.During the next 6 months the house was not shown once even though the price was dropped to $300K.Not wanting another reduction and much frustrated my son in law decided to take the house off the market.They told the broker(who gave them a difficult time)to remove his sign and lock box. Although they were not under any time frame in the contract, the agent ignored their e-mails for a month. After some persistence and threat to tear off the box, the agent removed it. About 2 or 3 weeks later a friend of the family(with money)heard about their financial plight and offered to buy their house. They sold it and moved into the other one. The "broker" has written them and said they were going to sue for the 7% commission of 21K. They live on a tight budget and can't afford this. Incidentally, the "broker" is the husband of the true real estate broker. He does not have a brokers license yet he signed the original contract. They never met the real broker. Does the agent have a case?

Answer
Dear Robert:  As I do not have a copy of the contract, I cannot ascertain when the time limits expired, what the conditions were, et cetera.  What is written and signed is what prevails.  It was not the fault of any agent (after all, all the agents knew about your house, it simply was not shown by any of them) that your house did not sell.  It is, as you know, very slow economic times, and while houses are still selling, the house must be priced correctly even to attract attention.  What some one wants for their home, what some one needs for their home, are not enough.  It is what some one is willing to pay that counts.  Willing buyer and buyer selling equates to market value which apparently was not what the house was.  If the relative purchased the home during the contract period, then a commission is owed.  If not, probably not.  Affording a commission is not a legal basis.  The broker husband may be acting as manager of the office, yet the license of the office may be held by another party.  You are entitled to know who the broker of the office is.  I have my brokers license and have been asked many tines to be the official broker of the office, and I would be paid for that service.  However, I never wanted to involve myself in that process.  You should write back to AllExperts and ask this same question to some one who is a real estate attorney.  Also, you should be aware that real estate agents cannot "practice law without a license", so you may need to have a consultation with a real estate attorney.  I am hearing complaints from you and concern more about the money than about the ethics.  You may indeed be justified in your concerns, but it deems investigation..  There are always two sides (or more) to every dispute, so I would strongly suggest you obtain all of the paperwork involved, put it in order, and submit it to the attorney.  YOu may even be able to save some money by going to one of the neighborhood storefront legal offices who handle smaller and more routine issues like this one who can look into it for a more modest price than an attorney with a major company.   I know what you want to do what is best, but you should always want to do what is right.  Or, you could just sit back and do nothing and wait to see what the other parties will do and then look into your options.  If you look over your paperwork and decide the contract between your dauhter and son in law expired prior to their selling to a relative, you may be comfortable with your position.  Keep in mind, why would there be threats unless the other parties felt they were in the right?  Could be bluffing, could be they have a legitimate point.  
Good luck to you.  If you go forward, let me know, and maybe I could be of real estate help rather than legal help down the line.  Karyn Foley