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socallegalwork, Lawyer
Category: Real Estate Law
Satisfied Customers: 144
Experience:  Attorney and licensed real estate broker (and Certified Distressed Property Expert), specializing in real estate matters.
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OH** I've been working with a real estate agent who has

Customer Question

OH** I've been working with a real estate agent who has been finding me great deals on fix/flip properties. In the process of selling one of my houses as a FSBO, another agent approached me and asked if I'd be interested in buying another house very close to the one I'm selling. I don't have an exclusive buyer's agency agreement with my current agent. Just wondering if it's okay to work with this second agent. Or, is there some sort of co-broke arrangement? I don't want to ruin the relationship I have with my previous agent, but the second one brought me the deal. How should I behave?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  socallegalwork replied 1 year ago.

Hello I believe I can assist you.

There are two considerations. The first is contractual. You indicate that you do NOT have an exclusive agency agreement with the first (previous) broker.

The second is whether the first broker can nevertheless state a claim to all or some portion of the commission on this deal despite the lack of an agreement. Often a broker asserts this claim alleging that he/she was the "procuring cause" of the deal. I will spare you the numerous definitions that have been offered for "procuring cause." Suffice it to say- certain factors can be important such as: Did the first broker ever list the subject property on any email or paper he sent over to you? Did he ever verbally tell you about the property? Basically, can this deal be rooted in any action taken by the first broker? From what you have stated, this does not appear to be a problem.

Finally, I would disclose to the second broker your previous arrangement with the first broker. If the first broker later makes a claim it will be for the commission your second broker will be receiving.

Good luck to you.

Customer: replied 1 year ago.
how about proposing to the first agent the following: we will make the offer through him, but if we get the offer accepted then he must agree to send along a 'finder's fee' to the second agent?
Expert:  socallegalwork replied 1 year ago.

You will have to discuss those kinds of options with the second broker. I think the bot***** *****ne is the first broker probably does not have any claim for a commission, So you may have a difficult time explaining to the second broker why they should voluntarily give up a large portion of their potential earnings on a deal where the second broker was the procuring cause (found the property and brought it to you).

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