Commission Ethics Question

[Jordan Blustin]

I’m interested to hear what people recommend in this situation.  Essentially what commissions are owed? 

A developer buys a piece of land and divides it into 7 lots. No realtors are involved yet. A neighbor wants to buy two of the lots to expand their property. The developer and buyer negotiate directly but don't reach an agreement. A few months later Realtor A is selected to list the lots for the Developer. In the next year, none of the lots sell. But the neighbor calls Realtor A a couple of times for updates. They never meet in person. The realtor never shows the property or signs anything—just a couple of phone calls. After a year, the Developer changes realtors and relists with Realtor B. Realtor B puts the property on the MLS but has not visited the property yet, doesn't have a key yet (he used photos the developer had). He hasn't put a sign on the property or done any advertising. Realtor B hasn't done a single showing or spent any money yet. The neighbor Re-approaches the developer directly (neither realtor knows about the negotiations until later), and they reach an agreement for two of the lots. I forgot to mention, there were no exclusions listed in the contract with either realtor. I'm not sure this is relevant, but Realtor B has done a lot of work with the developer over the years on other projects and they have other current listings together.

What would you expect to happen in this situation?  

[Chris Seveney]

@Jordan Blustin

Realtor A gets nothing as it’s probably like that in their contract. Assuming the buyer has no signed agreements - realtor A expired and typically language in contract that has like a 90 day window after agreement expires. Also language in there that if you have a new realtor that 90 days is not valid.

Follow your contracts is what I would say. If you have a signed agreement and ink was one hour old and still wet, that agent gets the commission.