Representation agreements, mortgage fraud

ask george & chuck

Representation agreements, mortgage fraud

 

Dear George: I am interested in a house and want to make an offer. However, the real estate agent asked me to sign a form that I was to exclusively use his services for 30 days. To me this means that if for some reason I don't purchase this specific home, I have to use his services for any other property during the 30 days. I don't want to sign this contract, but I want to make an offer. What should I do if he won't represent me without signing this?

Answer: The form that agent asked you to sign is the Residential Buyer/Tenant Representation Agreement. Before an agent has a substantive discussion with you regarding your real estate needs, that agent is required to provide you with a the Information About Brokerage Services form. That form explains that a Texas real estate licensee can either represent the seller, the buyer, or both, but special written requirements must be met.

If a real estate licensee does not represent you, he represents the seller, either as the listing agent or as a subagent of the listing firm. Either way, your relationship to that real estate licensee is as a customer, not as a client. The real estate licensee must treat you fairly, must not misrepresent or conceal any conditions about which the licensee knows, can assist you by filling out forms, and can provide lists of providers of ancillary services like as inspectors or lenders. But that is essentially all the licensee can do for you. You are much better off if the licensee has a legal, fiduciary obligation to represent your best interests in the real estate transaction.

You stated in your e-mail: "To me this means that if for some reason I don't purchase this specific home, I have to use his services for any other property during the 30 days." You're correct; you even have to work with that agent if you purchased a home directly from an owner. Your best options are to work as a customer with this or any other real estate licensee who is willing to work with you in that way; or enter into a Residential Buyer/Tenant Representation Agreement for the period of time the agent requests, but limit the definition of the market area in the agreement (Section 3C) to mean only that specific property by street address, the specific subdivision, or other limitation to which the agent will agree.

Dear George: We are signed a listing agreement to sell our house. We agreed on a price with a buyer, who is also a REALTOR®. The buyer, through the listing agent, made us sign two contracts: one on the price that we had agreed upon and one that was $20,000 higher. The buyer got the house appraised at the higher price. In addition, the listing agent listed the house $20,000 higher than we were asking. We kept asking our REALTOR® to lower the price, but she kept the house listed at that higher price. I think she did it so that no other offer would come and she could save the house for that buyer/REALTOR®. The buyer has been unable to get a loan, and we can't sell to someone else. And our listing agreement expires in a few days. Can we sue these REALTORS® for unethical practices and conspiracy against us?

Answer: It appears that the real estate licensees (your agent and the buyer) and the appraiser are trying to commit mortgage fraud. You may sue the REALTORS® and the appraiser; should you choose to do so, select an attorney successful in litigation against settlement-services providers. However, your primary concern here is selling your home. You are the owners of the house, and the real estate agent who represents your interests is required, by law, to obey your lawful instructions. Since your listing has now terminated, research REALTORS® and their firms on the Web sites of the Better Business Bureau and the Texas Real Estate Commission to determine whom you want to represent you next. Conduct interviews with at least three of them. You can also ask potential agents and their firms for references from their other sellers and call those sellers and ask them questions.

  E-mail your question to "Ask George & Chuck" or fax it to 281/596-7591. The answers to questions in this column do not contain legal advice. If you wish to obtain legal advice, you should consult your own attorney.  

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George Stephens, CRB, is the broker of ERA Stephens Properties. He is licensed as a mortgage broker in Texas and a real estate broker in Texas, Georgia, and Massachusetts.

Charles J. Jacobus, JD, is board certified by the Texas Board of Legal Specialization in Residential and Commercial Real Estate Law, and the author of Texas Real Estate Law and Texas Real Estate, both published by Thomson Publishing. He also teaches at Champions School of Real Estate and Houston Community College, and is an adjunct professor at the University of Houston Law Center.

George and Chuck are co-authors of Texas Real Estate Brokerage and Law of Agency published by Thomson Publishing.