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Protected Buyer List

Ask the Real Estate Lawyer: Real Estate Law Q&A

REM #LAW 688

By Ilyce R. Glink and Samuel J. Tamkin

Summary: Ilyce and Sam help a reader decipher the ins and outs of a "protected buyer" list. When a listing contract ends, the listing broker wants to make sure the seller does not contact any of the people the listing broker showed the property to and deprive him of a commission.

Q: If a seller terminates a listing contract with his Realtor and the Realtor gives the seller a list of "protected buyers," does this mean that anyone on the list cannot be on the title to the home without the paying the agent a commission?
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We are purchasing a property with another couple and want all of us on the title. However two of us are on this "protected buyer" list, and it seems to be holding up our purchase.

A: When a listing contract ends, the listing broker wants to make sure the seller does not contact any of the people the listing broker showed the property to and deprive him of a commission.

So, most listing agreement contain a clause that states that the listing broker will still be owed a commission if the owner sells the home to any person that saw the property during the time it was listed.

To protect the owner and, perhaps, the broker, the listing broker can deliver a list of all of the prospective buyers that came to the property while it was listed. If any of these people buy the home during the months following the termination of the listing, the broker can make a claim for a commission. The time period after the listing expires in which the broker is protected by this clause can be short or can be as long as one year.

Obviously, you saw the property while it was listed and if you buy the property, the seller would owe a commission to the former listing broker – if it is still within the protected time period.

If the property is now listed with a new real estate agent, the seller may not owe a commission to the first broker. In some parts of the country, the real estate brokerage community has come to an understanding that when a listing is lost by one company but gained by another company, the first company will not make a duplicate claim for a brokerage commission.

If the home has not been relisted, then the former broker will want to be paid and should be paid. If it had not been for the work and listing of the property by the former listing broker, you probably would never have come to know of the house.

Because of this fact, the former listing broker would be entitled to payment.

Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce R. Glink’s latest book is 50 Simple Steps You Can Take To Sell Your Home Faster and For More Money In Any Market. If you have questions for them, write: Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or contact them through Ilyce’s website www.thinkglink.com

 

 

 

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