Problem with realtor and land contract sale?

Question

The contract with my realtor expired, instead of extending the contract, I decided to try selling the home myself. A month later, I ran into a friend who I happened to know had looked at the house previously during an open house. He and his wife said they were still interested, and asked if I would consider a Land Contract.

After we came to an agreed upon selling price, I had another realtor draw up a land contract agreement for a $500 fee.

Now, the previous relator is suing me for her commision on the sale of the home because she initially showed the property to the party. The 60 day period as stated in my contract had not expired before I signed the Land Contract. Am I correct to assume that she should not receive a commision until closing since this is a land contract??? She wants the entire amount of the commission immediately.

I should mention that the new realtor did know about the previous one and how the couple first saw the property.

She also drew up a one day listing to do the land contract.

In the original contract with the old realtor it states that she is entitled to comission after expiration UNLESS seller enters into contract with another realtor.

Answer 1

This is precisely one of the reasons that I recommend that people hire an attorney who specializes in real estate law, not a REALTOR or real estate agent to represent their interests and write the language of your contracts.

The language that is giving the agent the apparent right to collect a commission a month later after the listing contract has expired is often called a "protection period"

A good attorney will limit the protection period to less than 10 days, not 30 or 60 days.

Unfortunately if that REALTOR wrote a 60 day protection period into her contract you may have to pay her a commission. although I think that a 60 day protection period is a ridiculously long period of time. Even 30 days is too long.

That real estate agent ought ot be ashamed of herself for writing in such a ridiculously long protection period.

I recommend that you hire a good attorney who specializes in real estate law and have him review your old listing contract and the new one.

You mention that the old listing contract has a provision that may waive the protection period if you list with a new real estate agent.

Ask the attorney to review both contracts and ask the attorney if the language in the contracts or some other matter may result in the waiver of your obligation to pay a commission.

Even though the first agent showed your property to the buyers some time ago, I would not permit language in a contract that permits an agent to come back one month later and claim a commission even if she did show them the property one month ago.

If she knew what she was doing why did she not persuade the buyers to make an offer?

It sounds like you were the one who persuaded the buyers to write the offer, not your real estate agent. Your real estate agent ought to be ashamed of herself.

In my opinion it is unconscionable for a real estate agent to be able to come back one month later after the listing has expired and claim a commission, although I realize they do that all the time.

ESSENTIALLY THE LISTING AGENT DID NOT PERFORM DURING THE TIME PERIOD OF THE LISTING. EVEN IF SHE SHOWED YOUR HOUSE TO THESE PEOPLE ONE MONTH AGO, SHE DID NOT GET YOUR HOUSE UNDER CONTRACT WITH THESE PEOPLE AT THAT TIME.

YOU WERE THE ONE WHO PERSUADED THE BUYERS TO TAKE A SECOND LOOK AT YOUR PROPERTY AND MAKE AN OFFER, NOT YOUR REAL ESTATE AGENT.

30 DAYS LATER IS TOO LATE FOR YOUR REAL ESTATE AGENT IN MY BOOK.

That is why an attorney that represents your interests, NOT a real estate agent or REALTOR, who is representing her interest against you (even though she claims to represent your interest) needs to write and review all of your contracts involving the purchase and sale of real estate.

Your former real estate agent does not deserve a penny. I recommend that you ask your attorney to be very aggressive with her and her broker.

Your former real estate agent and her broker did not do a good job. They do not deserve to be paid, even though they wrote a ridiculous listibng contract in their favor and against your interest that on the surface may appear to give them the right to be paid.

I expect that your attorney will think that they do not deserve to be paid and I suspect that there is a very good chance he may find a way that you do not owe them any money

Your attorney fees will probably be much less than the commission that they are claiming.
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I recommend that you talk to your attorney today.

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Answer 2

If that Realtor, showed the shouse initially to the client who is now purchasing. The Realtor under Real Estate Law is entitled to all of the Commission.
If you would have told the New Realtor about the previous one, and how the buyers saw the property while under contract with the old Realtor. He would have asked for a letter confirming a cancelled contract from the old Listing Office. My best advice. Sell to someone else or do a for sale by owner where no commission is paid and the Realtor cannot sue for a commision that does not exist.

Answer 3

A land contract is considered a sale, according to a sample State of Michigan sample listing agreement. If you are thinking that you should pay her 'in installments' as you are paid by the buyer of the land, that is not correct.

Whether the property was financed conventionally, or financed by you as a land contract is immaterial. The woman deserves her commission in full at the time of the land contract signing.

Answer 4

In addition to mortgage lender-specific home sales, buyers and sellers can also enter into other sale transactions, including land contracts. Also known as contracts for deed and installment sale contracts, land contracts are basically home seller-carried financing. For hopeful home buyers with little credit, land contracts are a way to own a home without qualifying for a mortgage loan. Land contracts also come with several tax consequences, generally favorable, for both home buyers and their sellers.

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Answer 5

Once you've exchanged contracts you're entitled to insist upon the redress stated within the contract. If you were given a deposit (i.e. if the land was mortgaged) you take that. If not you'll have to sue.