I used a real estate company only bc my friend wanted to help which is an agent. We signed contact in April and closing was in July. In that time we had money problems and decide to move back home which is 2 hrs away from the new house. We backed out a month before closing and the seller has already sold the home. Now my friends company wants their cut from me...which is 2% of home, which is like $4000. Just wondering what happens now. I am not paying that much money for a friend to show me a few house. The house didn't go to close and we lost our $500 deposit. My friend said if I don't call her manager and set up a payment plan that her company will turn it over to a lawyer. So not sure if they are serious or just trying to scare me. I offered to pay her $500 for her work but she wants me to pay more to her company. Just wondering what are my chances of getting sued if I just ignore it and move on with my life in my hometown? Should I contact her manager and offered the $500 to her?
2007-07-06 07:13:30 · 9 answers · asked by lynn 1 in Business & Finance ➔ Renting & Real Estate
It really comes down to what you signed. IF you signed anything.
You'll have to read the wording pertaining to Payment for Services or Payment of Commission. Each contract is different.
This is why it is good to have the agent explain the contract you're signing in detail before you sign or better yet, have a 3rd party review the contract.
2007-07-09 03:48:21 · answer #1 · answered by Robert Rees 2 · 0⤊ 0⤋
You are a little misinformed. It really depends on what you sign with your friend's company. I know that some agents working with clients have them sign a contract in which they get paid for the work they did, even if the purchase did not close. If you did not sign anything of that sort, dont worry about it you already lost your deposit for not following through with the purchase so you already legally paid for the consequenses of backing out of a purchase contract.
Now, if you did sign a contract where you would pay the broker for the time spend and work performed, I would suggest you talk to the broker and work out some deal. Negotiate but dont let them bully you and/or scare you.
If they keep threatening you, you can always report them to the Federal Trade Commission www.ftc.gov and the Department of Real Estate in your state.
Good luck
2007-07-06 09:13:39 · answer #2 · answered by YayArea 2 · 0⤊ 0⤋
I hope you had a mortgage approval contingency in the contract, which should be in any Realtor purchase contract! The only way out of this, would be by you notifying broker that your mortgage was not approved and denied! You should have your lender or mortgage broker help you out with the DENIAL LETTER you would need to provide to agent or broker office! Is very common in the present market for this to happen! Buyers are getting pre-approved, and then denied at the end before closing because of changes in the lending industry standards at the current moment!
Other than that, the job of an agent is to find you a home that fits your criteria. The agent did just that, so that's why they are trying to get commision! I assure you, that thios matter is out of your friends hand. Your contract is indeed with broker not agent! Hope it helps!
2007-07-06 07:38:41 · answer #3 · answered by Anonymous · 0⤊ 0⤋
If you had done this 5-6 times, then I would understand their frustration, but if this is the first time i think its crazy. I know the agent (who is your "friend") worked for nothing but this happens all the time in this business. I would suggest you call the broker and tell them to drop the act. If they rally need to come after you for 4k they have bigger problems. Let them know you will tell everybody by posting an ad in the local paper about how they operate. If you purchased another home through another agent, you would be responsible, and I would be encouraging them. Since you did not do this, and moved because of money problems they should understand. What kind of "friend" is this? I would lose them, and the agency all together.
RE Agent,
Remax
2007-07-06 10:19:37 · answer #4 · answered by frankie b 5 · 0⤊ 1⤋
Your best bet is to get your loan officer/ mortgage broker to give you a denial letter for your loan. This will get you out of the contract and would also release to you your deposit on the contract. Generally the seller of the home is the one that would pay the realtor commision though, so I'm not sure you are required to pay that anyways- depends on the wording of the contract.
2007-07-06 08:17:07 · answer #5 · answered by flamingojohn 4 · 0⤊ 0⤋
If you have signed an agency contract with this firm, they have done their job according to contract and should be paid. It's not the agency's fault that you changed your mind for whatever reason you did change your mind.
They aren't trying to scare you. They are serious about collecting the monies due to them for performance of their contract. Your friend is not in full control of this situation. The managing broker of the real estate agency is the person who wants the money.
2007-07-06 07:26:57 · answer #6 · answered by acermill 7 · 2⤊ 0⤋
Yes, they can do that. You didnt have a valid reason to back out of the contract, you simply "changed your mind" after the contract was signed.
It is considered bad business for Realtors to sue for commission, but every contract allows them to do so. They are more common with privately owned firms and Realtors working out of their homes for themselves.
The transaction didn't have to close for them to be due a commission, all you had to do was go under contract and be pre-approved for financing. It doesn't matter how much notice was given.
I would contact the Broker-in-Charge of the firm, not the Realtor you worked with, to see if you can reach a settlement. Your buyer-agency agreement is actually with the firm and not the individual Realtor.
If they take you to court, trust me, they will win.
2007-07-06 07:22:12 · answer #7 · answered by Expert8675309 7 · 1⤊ 0⤋
This is ridicules, I have a contract on my hand and people put 10 000.00 earnest money, they cancel the contract 5 days before the closing, they simply change there mind. I was upset and cost me money to prepare for this closing, so I try to hold some money to caver my expense, and my Realtor made me sine a release paper for there earnest money, and nobody ask for commission, I never herd anything like this. I think you should consult a realestate attorney, he will release you from this obligation.
Good Luck!
2007-07-06 07:47:24 · answer #8 · answered by reality 6 · 0⤊ 0⤋
Call your states local better business bureau. In MA that is against the law.
I think that you are being scammed.
2007-07-06 07:18:18 · answer #9 · answered by New England Babe 7 · 1⤊ 1⤋