Here is a situation MAR legal counsel recently weighed in on: An unrepresented buyer attended my open house and scheduled a follow up showing with me. I answered all their questions about the property and now they want to submit an offer using a buyer’s agent. Can I tell the buyer they can’t use their own agent at this point?
A. No. A buyer may choose who they want to represent their interests in a real estate transaction, and a listing agent has no authority to deprive a buyer of that right. In situations such as this, however, there may be a question of procuring cause. While the listing agent may not be obligated to compensate that buyer broker, they are still obligated to cooperate, unless it is not in the best interests of the client (See Code of Ethics, Article 3).
REALTORS® must take care to not allow issues pertaining to compensation to interfere with their clients’ interests. While brokers may discuss and negotiate compensation at any time during the transaction, if at any point the situation becomes antagonistic, those discussions should be placed on hold until the transaction has closed.
Buyer brokers are encouraged to use Buyer Representation Agreements with every buyer client they are working with. Having such an agreement is particularly beneficial when a buyer broker is invited into a transaction where their ability to be compensated as the procuring cause may be in question. Having such an agreement in place does not eliminate the buyer broker’s ability to seek compensation from the listing broker, or otherwise through the transaction, but provides a layer of protection for that buyer broker’s interests in receiving compensation for their efforts in a transaction.
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Written by: Justin Davidson, General Counsel; Catherine Taylor, Associate Counsel; Jonathan Schreiber, Legislative & Regulatory Counsel; and Kate Berard, Associate Counsel.
Services provided through the Massachusetts Association of REALTORS® is intended for informational purposes and does not constitute legal advice, nor does it establish an attorney-client relationship. The Massachusetts Association of REALTORS®, by providing this service, assumes no actual or implied responsibility for any improper use of responses to questions through this service. The Massachusetts Association of REALTORS® will not be legally responsible for any potential misrepresentations or errors made by providing this service. For more information regarding these topics authorized callers should contact the MAR legal hotline at 800-370-5342 or e-mail at legalhotline@marealtor.com.