How long to wait before buying privately

[windsorlancer]

O.k., so here is my situation. I am a young (28) investor looking to buy my first rental property. I have done my research and have found a property I liked, which was listed in the fall. I decided to play the waiting game for several months given our current economic situation and hoped that the (a) the price might be reduced and (b) the seller might become more motivated.

Well, I guessed right and after several months there was a significant price reduction. I put an offer in on this property for significantly less than asking. After some negotiations, the seller and I were not able to agree upon a price.

I noticed several weeks later that the property was no longer listed with the realtor and off of MLS. I made some inquiries and found out that the seller had removed the listing and the property had not been sold.

Since the seller`s name was on the listing I decided to google him and managed to get into contact with him via the internet. I am now trying to arrange a deal to buy this house privately with him.

My question(s) are: Am I legally able to do this? If not, is there a period of time I must wait before I can do this deal privately?

Thanks.

 

[wealthyboomer]

QUOTE (windsorlancer @ Jan 17 2009, 04:43 PM) O.k., so here is my situation. I am a young (28) investor looking to buy my first rental property. I have done my research and have found a property I liked, which was listed in the fall. I decided to play the wating for several months given our current economic situation and hoped that the (a) the price might be reduced and (b) the seller might become more motivated.

Well, I guessed right and after several months there was a significant price reduction. I put an offer in on this property for significantly less than asking. After some negotiations, the seller and I were not able to agree upon a price.

I noticed several weeks later that the property was no longer listed with the realtor and off of MLS. I made some inquiries and found out that the seller had removed the listing and the property had not been sold.

Since the seller`s name was on the listing I decided to google him and managed to get into contact with him via the internet. I am now trying to arrange a deal to buy this house privately with him.

My question(s) are: Am I legally able to do this? If not, is there a period of time I must wait before I can do this deal privately?

Thanks.

Yes, YOU are legally allowed to do this. The issue will be with the seller and what his contract was/is with the realtor. Since you already introduced to the property through a realtor and made an offer, there may be commissions payable by the seller.
Nothing for you to be worried about.
Good luck and keep us informed.

 

[Sarnia]

why woul the selling realtor be entitled to anything, the deal fell through, an offer was made - rejected by the seller - the listing taken off the market, there is no contract in place - i am just trying to understand why...can you explain further...if he waited 90 days vs 60 days does that make a difference?

curious

 

[DaveRhydderch]

QUOTE (Sarnia @ Jan 17 2009, 06:53 PM) why woul the selling realtor be entitled to anything, the deal fell through, an offer was made - rejected by the seller - the listing taken off the market, there is no contract in place - i am just trying to understand why...can you explain further...if he waited 90 days vs 60 days does that make a difference?

curious


When a seller signs a listing contract, there is a clause in there that states that if you sell to a buyer who has viewed the property while it is for sale with that realtor, you must pay the listing realtor the appropriate commission. I would hope the listing realtor made that known to the seller. This clause prevents us Realtors from getting cut out of deals in which we have fulfilled our obligations.

 

[Goodstuff]

If the seller`s contract with his real estate agent expired, and the house was not sold, then he has absolutely no obligation with the agent at that point. The contract has been fulfilled. He agreed to list it with the agent for the specified period of time. The time expired. Whether the house sold or not is irrelevant.

He can now list the house again with another agent, sell it himself, or just continue to live in it.

You are free to make an offer to him privately anytime now.



QUOTE (windsorlancer @ Jan 17 2009, 03:43 PM) O.k., so here is my situation. I am a young (28) investor looking to buy my first rental property. I have done my research and have found a property I liked, which was listed in the fall. I decided to play the wating for several months given our current economic situation and hoped that the (a) the price might be reduced and (b) the seller might become more motivated.

Well, I guessed right and after several months there was a significant price reduction. I put an offer in on this property for significantly less than asking. After some negotiations, the seller and I were not able to agree upon a price.

I noticed several weeks later that the property was no longer listed with the realtor and off of MLS. I made some inquiries and found out that the seller had removed the listing and the property had not been sold.

Since the seller`s name was on the listing I decided to google him and managed to get into contact with him via the internet. I am now trying to arrange a deal to buy this house privately with him.

My question(s) are: Am I legally able to do this? If not, is there a period of time I must wait before I can do this deal privately?

Thanks.

 

[JohnS]

QUOTE (Sarnia @ Jan 17 2009, 08:53 PM) why woul the selling realtor be entitled to anything, the deal fell through, an offer was made - rejected by the seller - the listing taken off the market, there is no contract in place - i am just trying to understand why...can you explain further...if he waited 90 days vs 60 days does that make a difference?

curious


I`m pretty sure Dave is right (especially as he said he was a realtor). As for why the realtor is entitled to anything....the wannabe buyer found out about the house and got interested in it due to the realtor`s work, so the realtor should be compensated for that. Otherwise, what would stop unscrupulous people from routinely making deals on the sly with sellers, along the lines of "Tell you what....Let`s let the deal expire, and then I`ll buy it from you. We`ll knock a few grand off the purchase price, but you`ll still get more money as you won`t have to pay the realtor any...."

Have a good one!

JohnS

 

[Mike Milovick]

QUOTE (Goodstuff @ Jan 18 2009, 01:12 AM) If the seller`s contract with his real estate agent expired, and the house was not sold, then he has absolutely no obligation with the agent at that point. The contract has been fulfilled. He agreed to list it with the agent for the specified period of time. The time expired. Whether the house sold or not is irrelevant.

Not necessarily regarding "no obligation."

Seller likely has a "holdover" period in his contract. Meaning seller is obligated to pay a commission if the property sold through his efforts/advertising. If you had a sale and purchase agreement in place, and the property eventually does sell, but later on, my gut is, depending on the paperwork signed, that the listing realtor is owed a commission on this one - by the seller.

Also note, that when you did an offer, you also probably signed a buyer agency agreement. Depending on the length of your agreement, you may owe your realtor a commission as well...

If you think about, if sellers could get out of paying commission by just post poning a sale, a lot of unscrupulous peopel would field offers during listing contract period and then contact buyers after listing had expired to avoid paying a commission.

Mike

 

[Lucas]

QUOTE (Goodstuff @ Jan 18 2009, 12:12 AM) If the seller`s contract with his real estate agent expired, and the house was not sold, then he has absolutely no obligation with the agent at that point. The contract has been fulfilled. He agreed to list it with the agent for the specified period of time. The time expired. Whether the house sold or not is irrelevant.

He can now list the house again with another agent, sell it himself, or just continue to live in it.

You are free to make an offer to him privately anytime now.


Be very careful as this advice could cost the seller (and you indirectly) the agreed commissions. In Alberta the "holdover period" is 90 days from listing expiry. The only way the seller will not have to pay commissions to the original Realtor/Brokerage is to sign another listing agreement with a different Realtor/Brokerage.

Besides, the Realtor in this case assisted in the deal...he/she deserves remuneration. I would suggest being upfront with the Realtor and the brokerage regarding this matter. The Realtor has probably already abandoned any notion of being paid from the deal and would likely negotiate their commissions. Also, if you and this Realtor are trying to establish a long working relationship it probably isn`t wise to cut them from the deal...not suggesting you are, just raising the point.

Good luck,

Lucas

 

[windsorlancer]

Just to add a little more insight into the situation. Personally, I`m not too fond of Realtors and choose not to work with them. Yes, I did find this house thorugh MLS, which I guess without the Sellers Realtor I might never had found it. However, other than opening the door for me to view this property, he did nothing else. I asked him to call me back with a few questions I had that he was not able to answer at the time of viewing and he didn`t do that. I also found him to be quite rude and obnoxious. I even wrote up the offer myself. However, he preferred to put it in his own format, even though the wording was almost identical.

 

[CalvinPeters]

Most Realtors are just plain...terrible. (I had to think about the word I put there for a minute) they think that they can tie you up with a listing contract, then do NOTHING and if there is any suggestion of some contractual reason why they can charge in and grab remuneration for their 10 minutes work they will and I think that any Realtor that is all contracts and no effort doesnt deserve the large commisions they take. Fortunatly, they usually fail after a short time and move back into salary positions.

Now, Having said that, there are a small (less than 5% by my personal experience) Group of Realtors (and likely that includes the ones that are posting on this thread, although I havent worked with any of them) that are the very definition of Professional. These are the guys that are go-getters and MAKE deals happen...dont just try and take orders. For the buyer they will roll up their sleeves and get their hands dirty...with the bonus that they will get paid by the seller to boot. These are the type you need on your team to assist you in long term wealth aquisition. They absolutly DESERVE any and all dollars they recieve in compensation. Maybe sometimes a little more! (think about that one for awhile!)

That rant over, I will address your question from my perspective. I think that the commision should be payable only if it was your intention to go behind the Realtors back to save the commision money. If you truly tried to put a deal together and the Realtor was so incompetent that it didnt happen...I dont feel that he deserves a commision...after all, he got in both the buyers AND sellers way of putting together a deal. IF you went behind his back to save money, then it is probably in your best interest to try and offer him SOMETHING if for no other reason that it`s the right thing to do. If as you say he couldnt answer your questions and was just simply rude and obnoxious...realize that a rude and obnoxious Realtor will try and cage a commision even after the fact if they think they can.

It may have been a better idea at the time you were working on the deal to approach the Broker and discuss the Realtors behaviour...perhaps they could have assisted you and got the deal done...in spite of the Realtor. Brokers want deals to go through their office. This is simply a business.

2 last points...

1. Realtors arent the problem, LOUSY Realtors are.

2. There are somewhere between 1 and a bajillion other deals waiting out there for you to bid on...these are fantastic times to be putting in offers. If this one gets too complicated, place a few other lowball offers while you are mulling things over. You might be surprised what happens!

Good Luck out there!

 

[DaveRhydderch]

QUOTE (windsorlancer @ Jan 18 2009, 10:01 AM) Just to add a little more insight into the situation. Personally, I`m not too fond of Realtors and choose not to work with them. Yes, I did find this house thorugh MLS, which I guess without the Sellers Realtor I might never had found it. However, other than opening the door for me to view this property, he did nothing else. I asked him to call me back with a few questions I had that he was not able to answer at the time of viewing and he didn`t do that. I also found him to be quite rude and obnoxious. I even wrote up the offer myself. However, he preferred to put it in his own format, even though the wording was almost identical.


I don`t doubt this for a moment. And Nukav rant`s is perfect so I won`t repeat my view on Realtors like this (which incidentally is one of the reasons I got into this business).

However, the simple fact is that the Realtor did introduce you to the property. Assuming he kept a copy of the contract offer, he has written proof of it. If he see`s the property sold, if he see`s it was someone who he introduced to the property that bought it, he will sue the sellers for his commission. I don`t know much about this process as a Realtor (fortunately), but all we do is lodge a complaint and the rest is taken care of (i.e. we don`t hire our own lawyer).



I am not advising you on what to do, just stating the facts. I think if a client is ready to "screw" a Realtor out of his commission, that Realtor didn`t do his job well enough.



Good luck.

 

[Dan_Eisenhauer]

Lucas explained it well. There is a holdover clause in every listing agreement, regardless how much work the Realtor did for you, the buyer. The Listing Agreement is with the listing company, not the Realtor.

I have not yet listed a ppty in AB, so do not know what the standard holdover clause is. It could run anywhere from 60 to 120 days. In NS it is by mutual agreement, so can vary from agreement to agreement.

There is one escape from the holdover clause. If the seller relists, even for 24 hours, with another agency, the original holdover clause is negated.

Now, most listing compnaies do not have the time or energy to check to see if each and every listing sold to someone shown the property during the listing period. Even if they do find that you bought the property, they are likely not going to pursue the issue. BUT, if they do, they go after the seller, not the buyer.

If you want to offer on this property and want to avoid worrying, insert a clause in your agreement that says the seller will hold you harmless if the Agency seeks its due commission.

 

[Mike Milovick]

QUOTE (Dan_Eisenhauer @ Jan 18 2009, 10:59 PM) Lucas explained it well. There is a holdover clause in every listing agreement, regardless how much work the Realtor did for you, the buyer. The Listing Agreement is with the listing company, not the Realtor.

I have not yet listed a ppty in AB, so do not know what the standard holdover clause is. It could run anywhere from 60 to 120 days. In NS it is by mutual agreement, so can vary from agreement to agreement.

There is one escape from the holdover clause. If the seller relists, even for 24 hours, with another agency, the original holdover clause is negated.

Now, most listing compnaies do not have the time or energy to check to see if each and every listing sold to someone shown the property during the listing period. Even if they do find that you bought the property, they are likely not going to pursue the issue. BUT, if they do, they go after the seller, not the buyer.

If you want to offer on this property and want to avoid worrying, insert a clause in your agreement that says the seller will hold you harmless if the Agency seeks its due commission.

Hi Dan;

Excellent comments re: re-list.

In our area, Kitchener-Waterloo, if seller re-lists, even for 24 hours, while in the "hold over" period, AND the commission is at a lower level than the previous contract, the previous listing agent is entitled to the difference. This clause is in to prevent realtors from chasing down expired listings and offering a discounted commission from the previous realtor to secure the listing...

Mike