General Question of a situation I heard of in Cleveland, OH

[Jacquelyn Ceasor]

Hi All,

I have a question to ask in general. It's more for the Real Estate agents than the investors but if you may be able to shed light let me know.

Caveat: This scenario MAY be in a vacuum without seeing an actual contract so I understand in advance if a hardline answer can't be given.

Scenario: A homeowner lists their home for 17900. An agent makes an offer for 16000 and so owner signs the contract with the agent. After owner thought about it...owner now realizes that the deal might not be as good as originally thought. Owner decides they don't want to sell anymore and the agent is demanding that owner owes $3,999 since they want to back out.

Question: If the 3,999 is the amount for marketing fees that would make sense right? Agents aren't paid commission on a no sale right?

Thanks in advance and again I apologize, I know the question is sort of in a vacuum without an contract.

Jacquelyn Ceasor

[Matt Motil]

If the seller wants to pull it from the market because they feel the price is too low, they can tell the agent to increase the listing price. Easy peasey. Sounds like there is more going on here. Doesn't sound like this is an actual listing agreement, rather an agent went to a listing appointment and offered to buy the property directly from the owner rather than list it for them. 

If this is the case, then there really isn't a listing, and there is no marketing because the agent wanted to buy the place. The seller has decided to not sell at the price on the contract and now wants out of the deal because they don't think they are getting top dollar for the property. 

Am I getting this right? or way off? 

If I'm right, then the agent needs to be incredibly careful in how they proceed. They aren't due a commission because they haven't done anything that would have garnered said commission. If they want to sue for performance, they could possibly do that, but they are also teetering on the fence of equity stripping if they made a lowball offer to a seller who now wants out of the deal. Licensed agents, and even more so for REALTORs, have a duty to their clients. Hopefully said agent got the seller to sign some kind of disclosure so their license doesn't end up in hot water.