Obligations to agent that showed me property?

Question

Hello Bp,

Looking for your opinion on whether I am obligated to go through an agent that showed me a property or if i can go directly to the listing agent.

I am a contractor that flips homes and real estate investing on the side. I have pretty good knowledge of my local market and when something comes up that I like, I generally seek out the listing agent and contact them directly for the sale, etc. A few weeks ago I went to look at a small multi-family property and in talking to the listing agent he convinced me to let him show me a property that needed work in a pretty "hot" area of town.

The property has been listed for about 120 days. Originally asking price was $599,000. They have dropped the asking price down to $499,000. Looking at comps and being conservative I think I could get around $590,000 when finished.

After the showing I did a estimate and the house needs close to $100,000 in work. I told the realtor I would be interested in looking at it again to do a more detailed estimate but I did not want to waste my time or the agents since my max price with that much work needed would have to be around $420,000 and was wondering if he thinks if the seller would go that low.

Since that email I got no response from the realtor (Its a little annoying at least respond saying its too low). I think my offer is reasonable given the amount of work needs to go into the property. Can I contact the listing agent directly with this offer or am I somehow obligated to go through the agent that showed me the property?

Thanks guys!

John Thedford · Answer

The agent that showed you the property COULD be entitled to a commission. However, if he simply fails to provide services now and fails to respond to emails you CAN fire him by sending an email stating that if he fails to give information, respond to your emails, etc. that you are severing your relationship. It isn't his job to determine if he likes an offer or not! Of course, I am generally speaking of our rules/regs here and you are in a different universe...ooops..i mean country:)

Russell Brazil · Answer

Call him. Also so you are aware if you go to the listing agent and get it under contract, the agent who showed you the property could file a commission grievance against the other agent with a procuring cause argument. This can become a huge headache for that listing agent and cost him half the commission he thinks he is double ending. So make sure he is well aware that someone else showed you the property.

Kenneth Reimer · Answer

@Dan Lee Hi Dan, if you don't have a representation agreement signed, I don't see why you would legally be obligated to go with the agent. However, the soft skills issue would be future business. In a competitive market, relationships with good brokers are worth their weight in gold, since they come across the best deals first. If you have a sour relationship with someone, or are known in the real estate community as being "the guy who screws brokers," chances are they won't work with you. My mom always told me, you don't bite the hand that feeds you. Obviously this is something you have to feel out since it is an ethical question, but I believe treating everyone well will always yield you better results.

I hope this helps!

Kenny Reimer

Conny W. · Answer

Dan,

I would send a text to agent's cell phone, asking him if he sent your (low) offer to the other (listing) agent. If he doesn't respond to text by end of business day, you should contact the agent listing that MFR... and send him your offer directly.

Dan Lee · Answer

Thanks for the responses. It has been a week since I sent the email. I did not sign a buyers agreement with the agent.

Michaela G. · Answer

emails get lost or end up in spam. I would at least call him to find out exactly where you stand, otherwise I'd consider it kind of unethical to move on after just one email.

Sarah Ziehr · Answer

How long has it been since you sent your last email? Have you tried calling?

There is something in agency relating to abandonment so if you have tried contacting this broker with no response, you can move on and go directly to the listing agent. If this broker that showed you the property doesn't follow up with you, no problem.

On the flip side, if you move on too quickly and then end up purchasing the property that first broker COULD sue you for procuring cause depending on the laws in your market.

Bottom line, is give this broker a reasonable amount of time to get back to you and if you feel they aren't looking after your interests then send them an email terminating the relationship.

Obligations to agent that showed me property?

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