# Dispute Between Real Estate Agents - HELP!!!



## Smurf1976 (6 October 2007)

Any advice in relation to the following would be greatly appreciated. Scroll down to the bottom if you want to get to the point without the detail.

I can not name the specific property address or the agents involved for legal reasons as will be apparent.

Two weeks ago today (September 22) I attended an open home as a potential buyer of the property. 

The following Monday (23rd) I was contacted by the agent (I left contact details at the open) and I agreed to a further inspection of the property the next day.

The next day I inspected the property and decided to make an offer (in writing) below full asking price. The agent suggested that my offer was unlikely to be accepted but agreed that it was a serious offer nonetheless and would take it to the vendor. 

The vendor rejected the offer and the agent notified me around 6pm that night.

During my inspection of the property that day the agent made a number of statements, some of which I believe to be untrue. 

Specifically they said:

That a nearby property had just sold for full asking price (not true - it is still for sale now).

That another property I was comparing with was not larger than the one I was interested in purchasing (the land area is in fact quoted as being around 20% larger which is confirmed via looking on Whereis / Google Earth). 

That the vendor would withdraw the property from the market if not sold very soon and would instead use it as a rental property (they have since listed with an additional two agents - all of them to sell rather than let it).

These statements plus the fact that the agent had readily volunteered information that the vendors would presumably not want made public (eg that they had already bought elsewhere) plus the reality of the property having not sold in the roughly 3 months it had been listed (most others in the area selling far more quickly) lead me to doubt the abilities of the agent.

...

On the evening of Wednesday 3rd of October I noticed that the same property was now listed with another agent (hereafter "agent 2").

Being aware that the property was empty and that the vendors had already bought elsewhere I assumed this to be an indication that the vendors were now more eager to sell than previously. As I was now in a position to make a moderately higher offer than that made previously I thought that it was worth another attempt at purchasing it.

I contacted agent 2 on Thursday morning and arranged to meet at the property. I inspected the property again and made an offer (in writing). Agent 2 suggested that my offer was at the lower limit of what the vendors might accept but stated that she would take it to them that evening.

Agent 2 also informed me that there was another agent (agent 3) who also had the property listed and they were holding an open home on Saturday. She said the contract period with agent 1 had now expired.

The vendor considered the offer for some time but rejected it that evening.

During the course of Friday agent 2 contacted me and the vendor a number of times during the course of negotiation. By 4pm that day I had an offer in writing which she suggested the vendors would seriously consider.

Today agent 2 contacted me again and a minor change to the offer (same price, different settlement date) was agreed to. Both the vendor and myself now agreed on price and settlement date. Deal done? NO!

This is the problem...

Agent 1 has demanded that they receive commission from the sale and that the vendor must pay two commissions. Following some argument between agents, they have offered to pay 20% of the commission to agent 2.

I have had no dealings with agent 3. They are not involved at this point.

It has rapidly escalated and in a matter of a few hours and the directors of both agents have become personally involved (agent 1 is a large company, agent 2 much smaller) and the dispute seems to have become quite bitter.

The vendor obviously doesn't want to pay two commissions. I want to buy the property and don't want the vendor to walk away thinking it is all to hard and deciding to look for another buyer instead.

What, if anything, can/should I do now?


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## robots (6 October 2007)

hello,

go smurf, top stuff

I would not get too involved in the politics surrounding the 2 agents

also wouldnt get too involved in what agents are telling you about the property, you need to make up own mind as to what you want to pay and hope vendor accepts

generally you know accepted when agents wants you to sign contract

if you have a signed contract (by you and vendor) then you are home, it will be up to the first RE if they want to pursue the vendor for any monies, nothing to do with you

auctions have become a more transparent way of selling property

thankyou

robots


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## It's Snake Pliskin (6 October 2007)

Smurf1976 said:


> Any advice in relation to the following would be greatly appreciated. Scroll down to the bottom if you want to get to the point without the detail.
> 
> I can not name the specific property address or the agents involved for legal reasons as will be apparent.
> 
> ...




Smurph,

Contact the Real Estate Institute and the Department of Fair Trading.


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## wayneL (6 October 2007)

It's Snake Pliskin said:


> Smurph,
> 
> Contact the Real Estate Institute and the Department of Fair Trading.



Agree, don't let agent vexatiousness spoil the deal.

I've seen this before, don't let it get out of hand.


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## 2020hindsight (6 October 2007)

geez, smurf 
these parasites that live on commissions are a worry aren't they.
let em take each other to court maybe?


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## Stan 101 (6 October 2007)

Hi smurf. It should be an open and shut case.

On a contract with an agent you have the option to over sole rights to the agent or shared for a set period of time. 

The only issue may be if the vendor has signed two exclusive deals with the agents. Then, from memory the form (24B?) states the vendor must pay two commissions..REIQ or other relevant state body's web page will clear it up for you..

Get a signature on the contract from both you and the vendor and let the other parties fight it out. It has nothing to do with you..They can't stop the sale unless there are conditions. When does it go unconditional?




All the best with the home.

cheers,


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## Smurf1976 (6 October 2007)

Thanks for the replies. Keep 'em coming...  

A point of clarification. I have signed a contract but the vendor is yet to sign. The vendor will not sign untill they can be sure they don't have to pay two commissions. Therefore it's no deal until the mess is sorted out and the property is still on the market with at least 3 agents.


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## Stan 101 (6 October 2007)

find out when the vendor's contracts end with all three agents.
On the day after offer the vendor the same deal minus commision they would have paid and get your solicitor to handle the sale. Win Win..

cheers,


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## brerwallabi (6 October 2007)

Its the vendors problem unless the contract you signed has a clause about your introduction to the property. Make sure that there is not a special condition that you are signing agreeing to the fact that you have not been introduced to the property by another agent.
Check it out as you could be then responsible for paying commission.
It is becoming very common.
You are dealing with contract law you could end up in the supreme court.

You do have a cooling off period.

Do not believe what the real estate agents tell you seek other advice.


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## It's Snake Pliskin (6 October 2007)

Smurf1976 said:


> Thanks for the replies. Keep 'em coming...
> 
> A point of clarification. I have signed a contract but the vendor is yet to sign. The vendor will not sign untill they can be sure they don't have to pay two commissions. Therefore it's no deal until the mess is sorted out and the property is still on the market with at least 3 agents.




More importantly what is your solicitor saying about it? 

I used to work in the industry , not sales, and I must say some agent referral systems can get nasty, even in rentals. 

Real Estate is one of the most regulated industries due to the fact that MONEY is held in trust. 

Talk to your solicitor and if needed contact the Real Estate Institute to inform them of the problem. 

This is not advice just an approach you could take.

Not all agents are bad, and most long time agents are COMMISSION paid only, so I am sure flippant remarks regarding commission are out of line. (not to you smurph)

Cheers......


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## Stan 101 (6 October 2007)

Smurf, if there isn't a signature of the vendor on that contract, as you say is the case, it has absolutely nothing to do with you. Until their sig is on there.. It's simply a group of paper (what is the collective noun for a group of paper when it's less than a ream?) with your signature stating your intent to buy. 




All the best with it though and keep us up to date.

cheers,


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## Happy (6 October 2007)

From what I know there is something in it if agent shows you property first.

Not sure if it is customary or it has been backed by some law, but being big and arrogant company, if they have the slightest right, they will happily pursue it.

Of course it can be bluff and as suggested in one of the posts above check with authorities.
And get answer in writing should you have to defend yourself if opinion was challenged.

Best would be to walk away from the deal, and get somebody else to do it for you.

Like your wife for example providing she wasn’t there with you at the time of inspection with agent 1.
Only problem is it will be in her name only.

Sorry to see such a fussy mess.


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## robots (6 October 2007)

hello,

spot on Stan 101

maybe keep in communication with "latest" agent you have signed contract with to find out what is happening

ignore any politics, keep it straight forward

maybe give a "walk away" day, as have a couple of others looking at

unfortunately its in the vendors hands

goodluck

thankyou

robots


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## Whiskers (6 October 2007)

Stan 101 said:


> find out when the vendor's contracts end with all three agents.
> On the day after offer the vendor the same deal minus commision they would have paid and get your solicitor to handle the sale. Win Win..
> 
> cheers,




Yeah, this could spook the seller out of settling. If the real estate authority in your state (REIQ in Qld), cannot sort it out quickly, bearing in mind that not all agents belong to the state organisations, the fastest way to fix it from my experience, and I think this is what your solicitors might decide to eliminate any comeback to the seller, is for the *seller to formally withdraw from all agents* and sell privately. Definitely let your solicitors handle it to get it legally right.


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## greggy (6 October 2007)

Smurf1976 said:


> Any advice in relation to the following would be greatly appreciated. Scroll down to the bottom if you want to get to the point without the detail.
> 
> I can not name the specific property address or the agents involved for legal reasons as will be apparent.
> 
> ...



Well one thing for sure. I've got a headache from reading your story. Real estate agents are often very greedy to say the least.  I'm sincerely hope that everything works out for you.  Maybe you need to contact consumer affairs to find out where you stand.


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## Whiskers (6 October 2007)

Hi Smurf

One more little technicality might help. I have used this before.

In the event that the vendor signs your offer contract, and it gets messy and say for example the large firm gets a restraining order preventing the settlement until they get their commission, you can potentially still recind the contract and do as I suggested earlier.

Provided you did not disclose that you were paying cash or have finance approved, generally a contract is subject to finance, so you can recind the contract by informing the agents that you have not been able to get finance. The wording is important, to properly recind the contract in the event that you go back and buy later. Again have your solicitor handle it now that it has got nasty.


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## cuttlefish (6 October 2007)

The vendor sounds like an idiot.  The first real estate agent sounds like the usual lowlife you'd expect from the industry.  And if you ever, ever believe anything any real estate agent tells you without verifying it yourself you've got rocks for brains.  The lies and bs I've heard over the time I've dealt with property I wouldn't trust any of them, even the ones that have been long established with good reputations.

Do your own research and don't believe a word they say. I suspect you'd have been able to get this property for less, and might still be able to.

If the exclusive agency agreement with the first agent ended then the first agency is just trying it on.  They also love to play all sorts of chest thumping games with hapless vendors (and buyers) to scare them into thinking they owe something they don't. They don't care one iota about the psychological affect all of this could have on the vendors.  In particular elderly people get trampled and robbed all the time by this industry in the most despicable ways.

My parents have quite a few properties and I've also bought and sold a fair few properties over the past 10 years and out of those experiences I've developed very little respect for the people that operate in this industry.


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## REA (6 October 2007)

Smurf I don't know what state you reside in but in NSW the contract has a  small clause which states that the purchaser " you " viewed the property with the name of the agent which is written on the first page of the contract.  In the case of a new agent he would have had a new contract issued or picked up the contract from agent 1 and changed it to his name.

The vendors solicitor will advise him not to sign any contract until the agents work out the problem as he may be liable for two commissions.   Maybe you should bite the bullet and go around and see the vendor and tell him that you really like the house and you hope we can work it out.  I would not denegrate agent l. because the way I see it he has the law behind him and the vendor has really to tell agent 2 to accept a split commission.   The vendor should not have changed in the middle of negotiation  I hope it works out for you.


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## REA (6 October 2007)

Smurf On reading further the home is vacant so my advice is not relevant.  The person who shows the property is entitled to commission in NSW and that rule may apply for a couple of months even without a relevant agency agreement.  Try and get your solicitor to talk to the vendors solicitor and see if anything can be done.


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## Smurf1976 (7 October 2007)

Thanks everyone for your posts. 

Location is Tasmania so the relevant industry body here is the Real Estate Institute of Tas (REIT). I'll be in touch with them next week.



> If the exclusive agency agreement with the first agent ended then the first agency is just trying it on. They also love to play all sorts of chest thumping games with hapless vendors (and buyers) to scare them into thinking they owe something they don't. They don't care one iota about the psychological affect all of this could have on the vendors. In particular elderly people get trampled and robbed all the time by this industry in the most despicable ways.




Reading cuttlefish's comment above I think this is what's going on. Agent 2 has told me that the exclusive contract period with agent 1 has expired. They still have it listed but it's now an open listing also with at least two other agents, including the one I am dealing with. 

The contract I have signed is subject to finance and professional building inspection. Also has set dates by which each thing must be completed. So if the vendor doesn't sign pretty soon then it's a worthless piece of paper as the dates will lapse. Also, I haven't signed the alteration of the settlement date (that change being unrelated to the dispute) and won't sign it unless the mess is sorted out first.

From a legal perspective it's between the vendor and the agents. I'm really just an interested spectator in that sense. 

But from a practical perspective though what I'm worried about is agent 1 finds another buyer. I'm guessing they'd be pretty damn keen to do so right now since that would secure their commission.

Worst case for the vendors (apart from ending up in court) I can see is that agent 1 finds another buyer who makes a lower offer than mine but they use the legal threat to force the vendor to accept it. That would leave the vendor, myself and agent 2 all rather unhappy. Everyone loses except agent 1 and some other buyer who gets a cheap house.

I'm keeping in touch with agent 2 for now since they are keeping me up to date with what's happening. Also they do seem reasonably honest, at least so far. 

One thing that I think could be significant is that the property has been changed since I inspected it with agent 1. The change is only minor (different oven in the kitchen) but it is a change nonetheless which is clearly visible since the agent's photos all show the kitchen and it's very obviously a different oven (brown versus white). And the oven was specifically listed as being part of the sale both in my first offer and this one. I'm no legal expert but I would argue that I did not inspect the property exactly as it is now with agent 1. (Anyone have any comment on this? I suspect it might be a significant point?).

I also do know that there are some defects with the property which have not been formally disclosed to me. The contract is subject to a professional building inspection which gives me another way out if need be.


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## tech/a (7 October 2007)

Smurf.
Agent 1 can prove he introduced you the the property.
The problem is with the vendors,however if they DIDNT sign sole agency agreements with any of the agents,I doubt that agent 1 will gain full commission.
In the end its likely to be a negotiated amount.

Back when I was in my early 20s,I had a property on the market for 2 mths.
The agent seemed to be doing very little each open the same story,plenty through but no contracts.
So I told them to get lost.
I ran my own open and had a contract that night.I sold it at a discount equal to the agents commission.

As I had a sole agency agreement the agent sued me for the commission.
I settled with him on 50%.

Agent 1 has done some work and your vendors are pretty keen to sell---with 3 agents.
I doubt they will let your contract go.
*You have a purchase contract*
If its signed by you and the vendor its a binding contract and doesnt matter what their fight about agents commissions leads to.
You have a deal provided you dont cool off.
Force the contract if you have to.


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## tech/a (9 October 2007)

What happened?


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## clowboy (9 October 2007)

Smurf,

I thought you where rather bearish on property?

If you don't mind me asking how come you are trying to buy and for what reason?  PPOR or IP?


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## Prospector (9 October 2007)

Hey smurf - post your question here:

http://www.somersoft.com/forums/index.php

Lots of RE's on this forum.


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## Smurf1976 (11 October 2007)

An update on the situation. Thanks to all for your replies.

The vendor finally signed a contract last night. I've signed it conditional on finance (approved today) and building inspection (next week). So it looks as though it's all sorted as far as the house is concerned.

The agents have come to some sort of agreement over commission, but not without me writing a 3 page letter stating very clearly that I expected a prompt and professional resolution to the matter. My interest there being that the vendor would not sign the contract until they were sure they wouldn't be paying two commissions.

I'm not sure of the exact deal between them, but both agents have told me they are getting something out of it. Agent 1 will record it as their sale and the contract was signed in their office.

As for my views on the property market, I'm reasonably bearish relative to other assets but investment isn't my reason for buying. It's for owner occupied not an investment property. I've got to live somewhere and, all things considered, this place is pretty close to perfect.


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## Stan 101 (11 October 2007)

great news, Smurf. All the best with the builing and pest and here's to a fast settlement..


cheers,


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## Julia (11 October 2007)

Good to hear of the satisfactory outcome, Smurf.

All the best for many happy years in your new home.


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## Happy (12 October 2007)

Great result so far.

If inspection OK, hope it is your best home ever


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## blablabla (12 October 2007)

Hi Smurf, glad you got it sorted out ok.

Had some interactions on the same subject recently with estate agents in Qld, so here is some info which may be useful to Queenslanders.

First point has already been made by others but is well worth repeating - 
don't believe a single thing an estate agent tells you unless you can verify it independently, even if you have known and respected the agent for years.

Assuming your story had happened in Qld:-
Whether Agent 1 is entitled to commission is determined by the wording of the
listing agreement the vendor signed with Agent 1. In Qld the form is called a PAMD form 22a "Appointment of Real Estate Agent". There are at least two different versions of this form, one produced by the Dept of Fair Trading and one produced by the REIQ (Real Estate Institute of Qld). The REIQ version requires the vendor to pay commission to an exclusive agent if the buyer was introduced to the property by anybody at all during the period of the sole agency, even if the buyer does not buy the property until after the sole agency has ended. So, if this version of the form was used then Agent 2 is actually the agent in the wrong if Agent 2 was aware of the previous dealings with Agent 1. Of course if Agent 2 didn't know about the previous dealings with Agent 1 then there might be some problems, but the vendor would have known and should have informed Agent 2 as soon as Agent 2 gave the vendor your offer.

The main difference between the REIQ and govt versions of the PAMD 22a relates to the point in time that commission becomes payable. In the govt version, the date when commission becomes payable is negotiable and is usually filled in as "at settlement". In the REIQ version the date when commission becomes payable is when the contract becomes unconditional.  Contracts that fall over after becoming unconditional but before settlement can be very expensive for vendors if they had accepted a lower-than-normal deposit. Beware. Also, don't assume that the REIQ acts in the best interests of anybody other than estate agents.


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## adobee (12 October 2007)

If laws in Tasmania are similar to NSW the case is as follows -

Agent 1 has an expired agency still valid unless terminated in writing
Agent 2 has an open agency also valid until terminated in writing

At this point in time you have not exchanged so there is no implication as yet for the owner as they havent signed a contract.

Agent 1 is entitled to the comission at this stage there agency is current and they introduced you to the property no question. (Agent 1 should have presented your details to the owners when they put in your offer,, ie registering you as there buyer. Agent to should have been more switched on and the vendor should have immediately told agent 2 you have seen the property with agent 1 and you are there buyer. Agent 2 could then have said to agent 1 hey we know your buyer we can get them over the line if you split the commission.

At this stage the vendor could be liable for two comissions however if you have signed the contract stating you were only introduced by agent 2 then they could hold you up for some of the liability (I have never seen this happen though).. If the vendor is responsible for two comissions its not your problem really.. aside from if you signed a statement as above...

What you need to do -

1.) If you have signed a contract get it back ASAP - it has not been exchanged so they have no right to keep it. I will only sign a contract with a condition that it is exchanged within 48 hours or the offer is off. You want to get this back as while they have it they can now execute the sale at any time (unless it has cooling off) most dont now days under a sect 64 certificate. Get the contract back, especially to check if you have signed to say not introduced by any other agent.

2.) Contact agent two (if this is your preffered agent) and have a confidential chat with them. Advise a) you understand the problem b)you want to buy the home c) you with draw your offer d) Have the the agent talk to the owner, withdraw the property from the market and send letters terminatiing all agency agreements. Wait about 30 days re-appoint the agent and then progress with the sale.

or 3) repeat step two but deal directly with owner no agents (owner details will be on front of the contract)

or 4) Advise the agents  - hey I dont care about the property that much either split your commission 50: 50 agree and proceed or I withdraw my offer all together and will look for something else. Then withdraw the offer then approach agent two for step 2).

But get the contract back asap first thing.

(You need to refer to council records to check property sized try rpdata.com etc google earth is not acceptable)

The first agent you deal with and are shown the property by is the agent you are introduced by.


Caveat Emptor - Buyer Beware

Its like shares do your own research dont believe anyone.


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## adobee (12 October 2007)

I got bored before I read the bottom posts... 

Good its all sorted..


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