I will be looking at a property to assess repairs and make an offer. The lady says she will probably elect to use her RE agent friend in the future to list the property. I would like to avoid any misunderstandings with a listing agreement. Does anyone have a form or other way that formally establishes a previous relationship with a homeowner and avoids a subsequent listing agreement?
I do NOT want to rely on the homeowner taking the initiative to inform the agent that I should not be subject to their listing agreement. I want something I can hold on to.
If you have a signed contract the home owner can not list it for sale! If you do not have a contract on the property the home owner can do as they please!
If this is a short sale the home owner may be requested by there lender to list the property for sale, in this case the home owner has to comply if they want the lenders cooperation in selling the property as a short sale!
Seller pay’s agency fee’s so it matters little to you as the buyer!
"If you have a signed contract the home owner can not list it for sale! (sure they can) If you do not have a contract on the property the home owner can do as they please!"
It’s not the owner I’m concerned with - she understands that one of the benefits of my offer is absence of a agent’s commission resulting in a higher net to her. It’s an agent who might want a retroactive commission for a sale from a buyer NOT discovered or associated with an agent as is potentially the case here. One way to alleviate this is for the homeowner to request Mary, Dick and Jane be listed as exclusions. Open listings are another option. However I seek something that does not rely completely on the homeowners initiative or understanding of the listing agreement.
“Seller pay’s agency fee’s so it matters little to you as the buyer!”
Oh please… we all know commissions are part of the transaction and who funds that transaction, semantics notwithstanding.
A buyer’s agent would be very apprehensive to show a their buyer a home that is not conventionally listed for sale. They will most likely show their buyer MLS listings. That’s one of the reasons finding your own buyer is important.
A buyer’s agent would be very apprehensive to show a their buyer a home that is not conventionally listed for sale. They will most likely show their buyer MLS listings. That’s one of the reasons finding your own buyer is important.
Why don’t you restate your question in a sentence?
In your second post, you make it sound like the property is not listed.
Is the property going to be listed or not? Is it already listed? In your first post it sounds like it is because you mention “her RE agent friend” and that you would like to “avoid any misunderstandings with a listing agreement”. There are no misunderstandings with listing agreements because they are in writing. If she signs an “exclusive right to sell” agreement it doesn’t matter who finds the buyer. The agent/s get a commission. 99% of listings are like this. You will have to wait until the listing agreement expires to buy the property if this is the case. Basically, the seller wants to get multiple offers and take the best one. She is not a “motivated” seller by my standards.
jfpen, the question pasted from the first post: Does anyone have a form or other way that formally establishes a previous relationship with a homeowner and avoids a subsequent listing agreement?
As I mentioned in my first (and second) post “The lady says she will probably elect to use her RE agent friend in the future to list the property.” So no the property isn’t listed, thus my desire to make an offer that nets her the most, i.e. sans a commission that, in this case, is unwarranted.
There are no misunderstandings with listing agreements because they are in writing.
Oh reeeally? I am aware of numerous times misunderstandings arose involving many different aspects of a RE transaction despite their being “in writing”. Disclosures, contingencies, performance requirements, deposits, listing agreements - all in writing, all commonly misunderstood by involved parties. I think you will find that misunderstanding often occurs primarily because the average person has a poor understanding and little experience with an RE transaction. When dealing with such a seller its helpful to anticipate and diffuse these in advance.
Look, if you are not aware of any measure I can take other than your advice to securing a written contract (see #2 below) then simply say that’s all you know of.
In the interest of sharing what I have learned from polling some experienced investors I know, these are three ways to avoid being subject to a listing agreement in this circumstance:
Have the seller request that you, the prospective buyer, be listed as an exclusion to the listing agreement. Caution them that the agent may try to impose an unreasonable time limit for the excluded buyer to perform which could result in them paying the commission should that time be inadequate. That little detail ripe for misunderstanding at the closing table.
Signing a contact to buy the property will not automatically absolve the seller of the agents subsequent listing agreement. If pressed the agent could potentially claim rights to a commission as a representative to the deal regardless of when it was initiated. See below and include it with any offers/contracts.
(this is the type of creative response I was looking for). Create a form letter in behalf of the seller that gives notice of the sellers negotiations with you, the presence of an offer, contract etc., include the stated wish that a resulting sale not be subject to any subsequent listing agreement for the next year , not to be superseded. Have the seller sign the letter when you make her an offer and/or sign the contract. Since I am aware of the agent, mail the letter to the listing broker prior to a listing agreement registered mail. Even this is not completely fool-proof, but will most likely do the job.
This (#3) I can hold in my hand and not have to rely on the (inexperienced) seller.
I see. Is it your strategy to get the agreement signed before she lists the property on the RETAIL market and then match the highest bid? That’s the only way she saves a commission. I’m trying to see the value here. Unless this property is a DEAL at RETAIL, you’d better hope there is something significantly wrong with the property that either prevents it from being financed or prevents the title from being transferred. Then you have to to have the solution! What are the numbers?