This past May I wrote a contract on a New Home for a client that I have been working with for 5 years. Seemingly a nice respectable and well educated man that wanted to retire in NC. After clearing my Calendar to be at his beckoning call I found him exactly the home, the situation that he had requested. He was approved by lenders, and all the objectives were met.

After he returned home his Young Russian wife, of whom he failed to make me aware of til physical home search started pulled a fit of rage and he is backing out of the contract with this excuse. Well, maybe he just wasn't thinking clearly.!? What, you had 5 years to think and gave no indication of wavering thoughts while here in NC and also..were calling everyother day from California when you returned to push up the closing?

Being a experienced Agent..this is surely not the first client that has ever backed out of a contract and I have never ever..thought of charging anyone a commission for backing out. In this case however I am thinking of charging him the full amount of my Commission which would be around 6,000+. Why? This man is responsible for my clearing my calendar for 1.5week and it was during a holiday. He was the most gun-ho client I ever worked with. I ask him did he think the wife would mind if he purchased without her consent, and his reply was "I don't give a damn what she says, I am buying this home for my retirement with or without her." Well....I pretty much had my answer...right?

Wrong...today I got a note from him canceling the contract, apologizing and an offer to send me 500.00 for my time lost ...(if he get's his deposit back, which he probably will not".)

I know most of you are Vets in this biz and know how disappointing this is...but this time.. it made me really mad. Have I gone crazy or am I entitled to this emotion today?

If you have a written contract that under your state law entitles you to collect a commission, I would go for it. If you are not Broker of Record (Broker in Charge, perhaps, in your state) the broker may have to enforce the contract. The fact that he is trying to throw $500 to you as a sop indicates he knows he screwed up. Ask yourself this: If you hired an attorney to prepare documents for a new will, estate plan, etc and then said "Oops, I've changed my mind" do you think the attorney would still charge you for the work? We are professionals; it is time we acted like other professionals and billed for time whether they took our advice (or not) or changed their minds (or not).

Any time I have had this happen I have nicely and patiently explained to the buyer that cancelling a contract is not that simple and that it requires more than a note from him. He will probably (I say) be sued for specific performance by the seller, could be liable for both commissions and could expect a messy process. If your contract is contingency-free at this point you have a stronger case for this. If he has not gotten final financing approval he may have a loophole. However no lender will say he is not qualified for financing just because he changed his mind.

This usually quiets things down and gets the sale back on track. If not he needs a local attorney in your area and you need to talk to your broker. Ask for support with getting the commission since of course the contract is with your broker not specifically with you.

Ellen Pratt
Associate Broker
Charlottesville VA
www.charlottesvilleliving.com

Question number 1: Did you have a buyer agency agreement with him spelling out how much you were to be paid for being his agent?

I'm not an attorney but it seems to me there might also be some issues if his "Young Russian wife" won't join in the transaction.

When I buy investment property in Tennessee my wife does not participate in those transactions (hey, it's her choice and a long story) but lenders require her to waive any spousal rights she may have to the property as a condition of granting me a loan.

I'm very curious as to whether you actually had a valid, written buyer agency agreement with your client/buyer?

If you did not I would not make any plans for the commission on this fiasco.

In any event, best of luck getting paid.

I have had this happen to me.....first time...frustrated ... just aggravated with the buyer...pretty much told him to get lost...would you believe happened again (25 years as a realtor however)...this time...let the seller do the talking...nothing came from me....after a couple of days...every thing died down...buyer bought house...everyone still friendly....hard to keep quiet....but best to do nothing you might regret later...don't burn your bridges ...your buyer knows he is wrong....let him stew for awhile

This is one of the very reasons I like to do real estate consulting and get paid a portion of my fee upfront (or all of it). I agree with Melanie that it is time we started acting as professionals.

The only other industry that works on a contingency fee are attorneys who only take on lawsuits they know they will win, and they charge a hefty 33.3% for that in my area.

I also think that as his agent, he needs to be explained very calmly what his predicament well be should he back out (assuming all contingies are waived and you have a ratified deal). The seller can sue for specific performance, his credit will be hurt, and it will be a long and messy ordeal. He needs to know the ramifications of his decision. Then I say let him stew over that for a bit and see what happens.

otoh, since after 5 yrs of him saying he could buy the house with or without his wife's consent, I'm thinking there is more to this than he is telling you and he is now using her as an excuse.

Please let us know what happens with this, I can't imagine working with someone for FIVE years, lol! I have a listing now that I've just taken after working with the seller for 3 yrs and I thought that was bad, but I did it with consulting so I have been paid for my time.

should you want to investigate this further, go to the ACRE site (they are an approved RT affiliate) and read through the info. You can also sign up for a newsletter if you'd like to get more info should you wish to do so. As an approved vendor of RT, I think if you go to their link you get a discount for the class, I'm not sure, but in any case, I would check it out as in the future I see most real estate transactions being conducted in a more professional manner like this. The only State that has a problem that I know of with this is PA, where you have to be a broker to call yourself a consultant, and that isn't a bad idea anyway to get a Brokers license.

Go to the RT approved affiliate page and you'll find them there, or click on http://www.TheConsultingTimes.com.

Best wishes and let us know how it ends for you.

Screw the emotion. Money talks, BS walks [sometimes for even 5 years.]

Get what you are entitled to NOW -- or do you think he will come back again to mess with your head.

Hi and read your remarks,

Answers to questions: I am the bic. Remember I started working with the guy 5 years ago and things have changed. Also I do have An Exclusive Buyer Representative Agency Form with Him. I have documented emails, voice mails, etc. so I am well documented if I want to press him for the Commission. The Builder/Selling Agent isn't as upset as I am, he will definitely sell the house, since it was a REAL DEAL. I am the party that has been jilted, since I delivered my objective.

Seriously thinking of sending him a Breach of Contract form to sign to rescind the contract, then encourage him to expand in the notes why he made this decision, hence I will make a decision as to whether to pursue this futher. And no, I don't think I will be helping him in the future. I waited five years to get him to NC, now he thinks he will buy up in 5 years and buy from me. I don't want the pain in the ass, really.

If you've got the documentation go after the guy.

You owe it to yourself.

I HOPE that your Buyer Agency Agreement is not also 5 years old !!!