What are your thoughts on this: I recently had to turn down some great clients because they were under a Buyer’s Rep, but there’s more…
A couple of months ago, I listed a house for a friend of a friend. This was a great investment home in Austin, a small 2 bed, 2 bath on a huge corner lot. Although the place was clean (ish), and vacant, it needed a lot of work. But it had good bones The roof, AC, and Foundation were all good. But the place had been used as a rental for a number of years, and there was a lot of deferred maintenance. Plus it needed updating.
But it was right around $100K, which was a fair price for the house, even in the condition it was in.
However, There were a lot of possibilities for the place. With a little TLC it would be super cute. And since it was in a good neighborhood that wasn’t really ‘discovered’ yet the place was bound to increase in value over the long term. Also, as I mentioned it was on a huge corner lot, so you could add on, or even, with careful planning put up a second house on the quarter acre parcel.
But I digress, this story isn’t about that house, but instead about a client that called me after driving by that place. A lady, let’s call her Meg, drove by the house, saw the sign, and called the number (called me) to get more information. We hit it off, and I found out that she and her partner had moved here from another town in Texas, were currently living in an apartment nearby, and were looking for a house to buy to make into their home.
So I dd what I do with all new clients like this. I put her in touch with my lender who got her pre-approved, and began to send her properties that were in her price range, Every week or so, I sent her a more personal note or a text or call, checking in, to see if there were any properties that she wanted to go see. For the first few months she put me off, saying that she didn’t have time, or couldn’t coordinate her schedule with her partner, to go a-looking. That’s cool. I’m not pushy, but want to be available if a great place comes up.
Over these two months, she began to contact me more and more, and finally last Friday, we set up a time to go see a great little 3-bedroom place that was the ideal first home for them.
That’s when things got strange.
Shortly after we made the arrangement to go see the first place together, I get a call from an agent, a Realtor, in another city in Texas. The same city from where Meg and her partner are from. This agent was saying that she was the sister of the partner, and had an exclusive agreement with the Meg and her partner. She was asking for a large referral fee. She had never sent me any information about these clients, but suddenly contacted me regarding ‘her clients’.
An agreement like this is called a Buyer’s Rep, and prohibits one agent from ‘stealing’ another agent’s clients. Technically I am not allowed to even talk about real estate with people when I have knowledge that the clients are under a Representation agreement.
But something was fishy about this.
First of all, the other agent was over 200 miles away. They weren’t a member of ABoR (the Austin Board of Realtors), She was also a new agent, and she had no way of accessing any properties in Austin (she didn’t have a SupraKey for this area). According to Article 11 of the Realtor’s code of ethics:
REALTORS® are knowledgeable and
competent in the fields of practice in which
they engage or they get assistance from a
knowledgeable professional, or disclose any
lack of expertise to their client.
The agent, while qualified to sell in the state of Texas didn’t have knowledge of the area that her sister (whom I’d never spoken with) and her partner were interested in – Austin. So technically she could sell real estate in Austin, she didn’t have access to comps, or homes, or connections for off-market deals, and pocket listings. It would be like me trying to sell houses in El Paso. While I could legally do it, I don’t know the town at all, and wouldn’t be able to get the best deal for my clients.
Plus, the Agent was a family member. Something seemed fishy to me. It seemed like the agent was trying to get a quick commision off me.
So I asked to see a copy of the buyer’s rep, and told them that if the date signed was before today, I’d absolutely honor it, and pay a referral fee.
Guess what. It wasn’t. Big surprise!
The sister of the agent had indeed signed the agreement several weeks ago (but not before first contact with Meg), and Meg had just signed the document a few hours ago! It was fishy!
I learned a long time ago that it doesn’t pay to get involved in these kinds of deals. Too much drama. Buying a house doesn’t need to be a complicated, drama filled experience. I like to make it as smooth and easy as possible, for all parties involved. Not just my clients, but the other side of the transaction, and of course all real estate professionals involved.
So I politely informed Meg that I couldn’t work with her, and wished her the best of luck. I told her that I would be happy to help her if she was free of that Buyer’s Rep, and then removed her from receiving any more information from me. I took her off my Matrix system, and quickly moved on.
Some would say that a little commission is better than no commission, but for me it is all about working smarter, nor harder. I’d rather be free of all the drama, and have a quick and smooth deal, than one complicated by issues such as this.
What do you think? Would you take a client like this? Have you ever worked with someone who had a family member as a Realtor? Tell me about it in the comments below.