Expert: Jessica Bryan - 9/19/2009

Question
I know you will be thinking how I could not know this, but this is true. My son is trying to buy a house and he put an offer in on one, when he went to sign the forms to put the offer in, apparently they also had him sign a Buyer Broker Agreement - Exclusive Right to Represent form. His dad went with him to do this paper work, but my son nor his dad realized he had signed this, or what exactly it meant. The offer on the house was not accepted and so my son had the agent show him more houses. Then my son found one he was very interested in and called his agent and asked him to show it to him, the agent told him it was a mobile home and the loan he was preapproved for would not accept a mobile home so there was no sense in going to see it. He did not offer to see if there was another type of loan he could get that would accept a mobile home. So my son, not knowing he had signed this contract decided to get in touch with the listing agent to see the home, it was shown to him and he liked it so much he immediately put an offer on it, and is now under contract and waiting for the appraisal part of it. My son did not tell the first agent he went and did this only because he didn't want  him to be mad that he went and looked at it with someone else. But now the first agent keeps calling my sons cell phone, our home phone and his workplace to say that he has new listings he can show him. My son has avoided his calls because again, he didn't want to tell him he went to someone else. So we then decided that he needs to just go ahead and tell the first agent that he has a contract on a house with a different agent. But first I wrote to the new agent and asked if it was okay to tell him that, or were we under any kind of obligation to the first agent and shouldn't tell him. The new agent told us unless there was a contract there should be no problem. I thought "CONTRACT"? So I pulled out my sons folder that had the old offer on the first house in it and there before my eyes was this contract that I mentioned above. NOW we don't know what to do, my son is very upset and so are we, we feel like we let him down, because his father went with him and didn't catch this contract, did not realize that my son signed this binding him to this first agent. We aren't sure what we should do, can you give us any advice? We do want to do the right thing, and we are afraid the first agent wont believe that we didn't realize our son signed that contract. PLEASE help!

Answer
Dear Sharon;
A couple of things come to mind.  First I would talk to the second agent and explain the situation and how you feel about things.  If the second agent is feeling kind he/she will allow the first agent to represent your son in this purchase.  However the second agent may decide not to allow this and will fight the splitting of commission (rightfully so since the first agent was not the procuring cause.)  This brings me to the second option.  You can then call the first agent and explain that once the agent reflected that he was not interested in helping your son with the purchase of a mobile home then your son assumed that his relationship with the agent was no longer valid.  It could be argued that the agent was in breach of contract since he was unwilling to act in your son's best interest by showing him the home that he really wanted and offering to find him a loan for a mobile home.  It is a much weaker argument though.  My third suggestion is to talk to an attorney and have him review the contract to look for loopholes that will help your son avoid owing a commission to the first agent.

I am truly sorry that this happened.  It should have been explained to your son carefully so that he fully understood what he was signing.  Perhaps it could be argued with the first agent that he did not do a good job explaining the ramifications of signing an exclusive agent representation with your son.  If the agent is with a large brokerage you might consider talking to the managing broker to explain the problem and work out a resolution.

Best wishes,
Jessica Bryan