I helped two clients and at the time, good friends, search for a house for a little more than a year. I thought La Costa Oaks would be the perfect place for them to bring up their family. I signed them up in the sales office and was assured by the realtors in the sales office that all I needed to do was to give her my clients names and my card. In October I was advised by my clients that I had been written out of the deal by both the builder’s agent and my clients. I sent the email below to the builder’s agent and Escrow was canceled.
The next day, the entire listing disapeared from MLS.
Today, I just did a title search on the property and come to find out my clients own it. To make things worse, I recieved a Thank You card a mont ago from La Costa Oaks for bringing clients into their community and informing me that the commission is now 4% on their new homes. Please read the emails below and let me know what you think I should do.
This is the letter I wrote 10/10/06 to La Costa Oaks:
Dear Lorene and Nicole,
I am writing this letter to you to document the 3% commission that I am owed for bringing my clients into your community a year ago to look at houses. Before I brought them in, I was asked by you/Lorene to give you my card as well as the first and last names of my clients. You then informed me that was all you needed in order for me to collect my 3% commission if they were to ever buy from Starboard. I then came into your office four more times with out them, to see what homes were available. The three additional times, Aaron and Christie were with me. Their final visit with me was on August 20th at 10 am. Making the total times I visited your office nine times. On August 2oth, Christie made an offer to purchase 7695Circulo Sequoia. The offer was countered, at which time Christie and Aaron decided to leave to make an offer on another house (Lorene followed Christie and Aaron to this property trying to persuade them to buy 7695 Circulo Sequoia and later called me on my cell phone three times that day to try to work with me on figuring out a plan that would allow Aaron and Christie to be able to purchase Circulo Sequoia), which was later accepted. However, that Escrow was canceled a week later in the first week of September.
On September 28, Christie emailed me bringing to my attention that she was interested in your builder buy back program and that you/Starboard, are still offering 3% to me. For further questions regarding this statement, please see the attached email. Yesterday, October 9th, Aaron informed me that I am no longer receiving a commission. I have come into your office over the course of a year. Trying to get Aaron and Christie to purchase one of your homes, as IO thought they would really find your community a great fit for their family.
I am requesting my owed 3% at the close of Escrow of 7695 Circulo Sequoia. I have spoken with a real estate attorney by the name of Jim Nelson of Parker and Nelson and have been advised to write this letter before taking further action. Aaron and Christie have been close family friends for a long time. I can’t believe that I am having to do this in order to collect on the commission that is owed to me. I would hope that this can be settled without taking further action.
Sincerely,
Kristen Enyedi-Lewis
Here is the email that my client wrote me:
On September 28, 2006
Hi Kristen,
Hope you Alia and Ed are all doing well. My house is still on the market with C21 out there. The front yard has new sod and all new landscaping. We have had two showings this week (one yesterday and one today.) I am not sure yet about the one today but the people who came yesterday are coming back with the rest of the family on Saturday.
CONFIDENTIAL
Here are some options we are considering:
Option 1:
I am not advising my C21 selling agents of this but the Davidson Homes “Starboard” in La Costa Oaks have recently announced a builder buy back program. If you buy one of their new homes they will buy your house, allegedly for fair market value, assuming they view it, appraise it and agree that it is something they should buy. I have applied to see what they would give me for my house with this program and have been researching it. They viewed it today. The lady who viewed it for them may or may not want to buy a house that far out.
The house we were negotiating on with you there in Davidson on my birthday still has not sold. (It remains priced at $998K) This would be the house we would want to buy from Davidson (if we do go with this program or if it does not sell to someone else before they qualify my house for this program.) I really don’t like any of the other houses they have left. (I don’t like the interior courtyard thing too much and Aaron does not like to feel like there are houses above him…..)As I recall, you had already offered them to take 1.5% commission instead of 3%. That was very nice of you. They still do the agent commission in the buy back program.
For future reference, I will always want to negotiate the house price down as low as I can get it without that aspect being brought up. Then I would like to negotiate moving that 1.5% reduction from your commission off of the sales price as the very last thing we do in a negotiation. So, at the point at which we negotiate or you offer that aspect I want to be involved and agree that they have already come down on all other pricing and incentives as much as they possibly will before doing the commission draw. If we do qualify for this program I would like to also ask them to give us 10K in closing costs which they may not do in the buyout program because they state that they do not give other incentives if they are buying your house. Assuming they take the 14K off of the commission and subtract it from that house price without any other incentives, that would make the house 984K, which we can barely afford. So, the way I am looking at this i t it is meant to happen, it will, if not it won’t.
Option 1a
The other possibility is that if we sell my house we could try again at this house as there would be more incentives. But it is really about 100K more than we would be happy spending, even if we take your 1.5%
Option 2:
Wait until my house sells and buy one of the existing resale in La Costa Oaks, where prices are falling somewhat….Last week I drove around on Sunday and saw a few that I thought might work.
Can you please send us the MLS for 7471 Circulo Sequoia? I think the MLS number is 061042081.
I visited this house on Open House last Sunday. It is listed at 949 K and currently owned empty by a relocation company. It is nice and big and ready to move into, but does have big power lines in the easement across the back. I don’t know yet how Aaron will feel about that….. We would have to also add a few doors to make a 5th bedroom downstairs.
There is also a house listed up there in Warmington with the same floor plan as the one we fell out of Escrow on that was terra cotta color. This one is a cream color and I think it is listed for $949K right now. It is on the streets in the area directly below the model with a bit of a bank slope on the back yard. If you can find the MLS for that house that would be nice.
See our discussion, and my post near the bottom of the page here. I’m not a realtor, but I think you have a good case. Check out the checklist I gave at that link, and see how good your case is. Keep us posted.
Down and out, I feel bad for you as a fellow realtor. On boards such as these you will not get any sympathy for getting scorched except from your brethren.
I would proceed as follows:
1 – Go immediately to my broker and tell him/her what is going on. I would imagine that your brokerage has a legal staff because they also lost potential income with the commission ommission. I would think that there are legal resources you can draw on to help you out. It seems like perhaps you have already done this.
2 – Did you have a buyers representation agreement in place with your clients? At the very least an agency disclosure signed by them?
Have you had any contact with these good friends at all lately? It is unfortunate that they went through the purchase knowing that you were getting shafted. What was most likely unknown to them, and most everyone who buys from a builder directly, is that having a savy realtor with you usually results in a much better deal then when you are on your own.
Yes, stupidity was everywhere. I am afraid I didn’t have my “good friends” sign a buyers agreement. Lorene at La Costa Oaks told me that my contract with them expired and my broker didn’t really offer a lot of help in the matter. Stupidity was on my part for not creating more of a paper trail and trusting Lorene and the other realtor. Lack of ethics were involved too on behalf of LCO and my “good friends”. To top things off, one of my clients is an attorney and demanded that my broker sign a form stating that I released all rights on colloecting a commission. Needless to say, I am at another office. I am just having a hard tome letting this go because it just feels so wrong and illegal.
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