Definition of "Introduced to the Property"

[shanh]

"Introduced to the Property" means that the person was made aware that the Property was available to purchase irrespective from whatever source and without limiting the foregoing a person shall be deemed to have been introduced to the Property by the Agent if the person became aware that the Property was available for purchase as a result of viewing, hearing or reading any advertisements of whatever nature or medium, any boards, placards or other literature referring to the availability of the Property that were connected to the Agent in any way.

Consider the following situation:

A Vendor engages agent A first. Client X sees for sale ad by agent A and expresses interest. Agent A escorted client X for inspection of vendor's property, but client X's verbal offer was rejected. The vendor then engages agent B, who managed to secure a written offer from the same client X, but the offer was rejected by the Vendor, and the agency agreement with B then expires. The Vendor then engages agent A again, and after two months, agent A manages to secure an offer from the same client X to which the Vendor agreed to. Exchange of contract occurred.

In this case, is it correct to say that Client X was "introduced to the property" by both agent A and agent B? Or does "introduced to the property" only apply to the initial moment when Client X first became aware that the Vendor's property was for sale?

Is Agent B still entitled to commission if he had an exclusive agreement with the Vendor, despite failing to secure the deal?

 

[Terry_w]

Agent A introduced the client.

Who gets the comm will depend on the wording of the agreement.

 

[Scott No Mates]

And quite possibily the time which has lapsed.

 

[buzzlightyear]

The answer is........A

I'll answer the way it works in Vic, and whilst I wouldn't expect it to be much different in NSW (assuming this is the case), it's worthwhile noting.

Even in the context of the same client (ie prospective purchaser), at the end of the exclusive authority period with one agent, the vendor who now enters into another exclusive authority period with another agent, supercedes the first authority and anyone who was introduced by the first agent. Therefore anyone introduced by one agent has no claims on any commission if the the vendor has at the end of their exclusive agreement, engaged another agent and entered into an agreement with them.

The same then applies in this case where the vendor has gone from Agent A to Agent B and then back to Agent A again. This also applies even if the timing of the authorities were back to back from each engagement from A to B to A again.

 

[thepeoplesagent]

Bloody hell, so many x’s a’s & b’s! I had to read it twice.

I will tell you a quick story which is similar to your a,b,x example.

I took on a listing from another agent. The previous agent introduced a buyer but the particular buyer was not in a position to buy.

When I listed it, the buyer approached me. Lucky for me he sold his home and was ready to buy. He made an offer --> offer accepted.

Previous agent made a claim to commission. They were unsuccessful. I got the full commission and was able to eat baguettes every morning for a month. However, the boss had to dish out $5,000 in court costs.

Truthfully, it’s a grey area. One in which is usually decided in court.

 

[Propertunity]

Any of these commission claims that go to court these days - the "introduced to the property" clause gets put aside and the determination is made on which agent was "the effective cause of sale".
http://www.reinsw.com.au/Effective-Cause-of-Sale-JLMar2011/default.aspx

 

[thepeoplesagent]

Any of these commission claims that go to court these days - the "introduced to the property" clause gets put aside and the determination is made on which agent was "the effective cause of sale".

This is what I was saying but you just explained it better.

 

[Ed Barton]

Bloody hell, so many x’s a’s & b’s! I had to read it twice.

I will tell you a quick story which is similar to your a,b,x example.

I took on a listing from another agent. The previous agent introduced a buyer but the particular buyer was not in a position to buy.

When I listed it, the buyer approached me. Lucky for me he sold his home and was ready to buy. He made an offer --> offer accepted.

Previous agent made a claim to commission. They were unsuccessful. I got the full commission and was able to eat baguettes every morning for a month. However, the boss had to dish out $5,000 in court costs.

Truthfully, it’s a grey area. One in which is usually decided in court.

You may consider these personal questions, so feel free to ignore...

What cut of the commission does the agent get? Are all/most on commission only?

How many properties would a 'regular' agent sell per month on average? How many for a very successful agent?

 

[DaveM]

I have read cases where agents have claimed that an internet listing is an introduction to the property and tried to claim commission on the sale when it is sold through another agent if they can show the buyer saw it online under the original agent.

Dont think they got anywhere though.

 

[wylie]

About six years ago we got caught up in a situation similar to this.

I went through a property with agent A. It was stupidly expensive and I did nothing more.

Close on one year later, I noticed it was again on the market with agent B for a realistic price. I went through and we signed a cash contract. A few days later agent A called me and told me I was her client and she was entitled to some commission.

It got worried that this would cost ME money, so I called agent B who assured me he had been contacted by agent A and was sharing the commission with her (unsure of the split). He informed me that this had been discussed between them prior to her calling me and I'm guessing she was just making sure everybody knew she was entitled.

I'm still insure whether it would have cost "us" any money or if the agents had to fight it out and there was a double commission to be paid whether the vendor would have had to pay it. Were we ever at risk of having to pay any commission (as the purchaser) or was this only ever a risk for the vendor?

It never came to that, as agent B handed over some commission to agent A, but I wonder what would have happened had it not been settled between them. And I'm guessing that would be different now under the "effective cause of sale" rules.

 

[Terry_w]

Watch out for special conditions.

In NSW when acting for the vendor I put a clause in the contract that the purchaser warrants that the agent named on the front page of the contract introduced them to the property. So far all purchasers have accepted this clause.

 

[Ed Barton]

I went through a property with agent A. It was stupidly expensive and I did nothing more.

Close on one year later, I noticed it was again on the market with agent B for a realistic price. I went through and we signed a cash contract. A few days later agent A called me and told me I was her client and she was entitled to some commission.

You should have told agent A that you have no contractual relationship with her. If she has a beef she can take it up with her former client.

You are not her client, the vendor is/was.

It got worried that this would cost ME money, so I called agent B who assured me he had been contacted by agent A and was sharing the commission with her (unsure of the split). He informed me that this had been discussed between them prior to her calling me and I'm guessing she was just making sure everybody knew she was entitled.

How an agent splits their commission is none of your business and you should have told them so.

I'm still insure whether it would have cost "us" any money or if the agents had to fight it out and there was a double commission to be paid whether the vendor would have had to pay it. Were we ever at risk of having to pay any commission (as the purchaser) or was this only ever a risk for the vendor?

It MAY have cost the vendor money, but is not your concern.

 

[thepeoplesagent]

What cut of the commission does the agent get? Are all/most on commission only?

Every agency varies. Personally, I have a target. I need to earn $28,000 in net commission per quarter. Everything over $28,000 I get between 30%-40% depending how much I bring in. I also get a base wage which is not much.
Not many agents are on commission only. You also must be a licensed agent to be on this structure.

How many properties would a 'regular' agent sell per month on average? How many for a very successful agent?

I don’t know the average. Especially since each area varies in turnover. But if an agent is making a sale a week they’re not doing too badly.
Top performing agents generate around 400k in sale commission per year. Some much higher.

adding ten characters!

 

[wylie]

You should have told agent A that you have no contractual relationship with her. If she has a beef she can take it up with her former client.

You are not her client, the vendor is/was.

How an agent splits their commission is none of your business and you should have told them so.

It MAY have cost the vendor money, but is not your concern.

I agree with all you said. I actually just listened to what she said and started to panic inside my head. Agent A most certainly made out that it could cost US money, but she may have just been trying to ensure I got involved and hassle Agent B .

I really do not know whether we (as purchasers) had any risk in the scenario I outlined, but she certainly made it seem so. Perhaps she was just wanting to shake things up.

After her very quick call, I got off the phone quick smart and called the agent we bought through. He told me it was all good and he had already confirmed he would be splitting with her. I don't even understand why she bothered to call me. So I panicked only for ten minutes in total .

I still would love to know if any purchase could be hit up for any costs in this situation (maybe not now... but back then)?

I do know that my parents were involved in a situation about 28 years ago where the vendor of a house they "swapped" was chased up by some sort of debt collector chasing up the commission. My parents did nothing wrong, but the vendor was being chased by a man in a suit. (We had since purchased the house from my parents and were living there. These people were pretty dodgy I think because we had a couple of "men in suits" wanting to know where they were.)

 

[Propertunity]

Watch out for special conditions.

In NSW when acting for the vendor I put a clause in the contract that the purchaser warrants that the agent named on the front page of the contract introduced them to the property. So far all purchasers have accepted this clause.

....which makes it really interesting for a purchaser using a Buyers Agent - where the purchaser has not been introduced to the property by any agent listed on the front page of the contract (sometimes we get a key from the listing agent) and where the BA has been introduced to the property from both the current and the previous listing agent.....

 

[shanh]

Watch out for special conditions.

In NSW when acting for the vendor I put a clause in the contract that the purchaser warrants that the agent named on the front page of the contract introduced them to the property. So far all purchasers have accepted this clause.

so that means the purchasers have no options if they get caught in the commission war between agents and the vendor! Unless whoever they bought from is the same entity that introduced them to the property to begin with?

How would you have advised a client who intends to purchase a property with this sort of clause in place??

 

[shanh]

Even in the context of the same client (ie prospective purchaser), at the end of the exclusive authority period with one agent, the vendor who now enters into another exclusive authority period with another agent, supercedes the first authority and anyone who was introduced by the first agent. Therefore anyone introduced by one agent has no claims on any commission if the the vendor has at the end of their exclusive agreement, engaged another agent and entered into an agreement with them.

That makes sense, that really should be how exclusive authority should work!

Any of these commission claims that go to court these days - the "introduced to the property" clause gets put aside and the determination is made on which agent was "the effective cause of sale".
http://www.reinsw.com.au/Effective-Cause-of-Sale-JLMar2011/default.aspx

But how "the effective cause of sale" is to be determined, that's up to the court to decide based on presented evidences I'd assume?

Previous agent made a claim to commission. They were unsuccessful. I got the full commission and was able to eat baguettes every morning for a month. However, the boss had to dish out $5,000 in court costs.

Truthfully, it’s a grey area. One in which is usually decided in court.

Good thing it worked out well for you guys! But did they sue you directly for commission? I would've thought that they have to sue the vendor if they want any money back

 

[Terry_w]

so that means the purchasers have no options if they get caught in the commission war between agents and the vendor! Unless whoever they bought from is the same entity that introduced them to the property to begin with?

How would you have advised a client who intends to purchase a property with this sort of clause in place??

I would ask for the removal of that clause. Or, usually, quiz the purchasers to make sure it was actually that agent that introduced them and tell them if it wasn't then they may be liable to pay.

 

[Terry_w]

....which makes it really interesting for a purchaser using a Buyers Agent - where the purchaser has not been introduced to the property by any agent listed on the front page of the contract (sometimes we get a key from the listing agent) and where the BA has been introduced to the property from both the current and the previous listing agent.....

Never had one like this so far. Would just make sure there is acknowledgement of the buyers agent in correspondence or in the contract itself.

 

[travelbug]

When I bought through a Buyers Agent I signed a paper to sday I wasn't introduced to the property by another agent.

I guess that covers the BA also from anyone saying they saw the property before the BA intoduced them to it.