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Brent and Valerie Gilchrist thought they had the best of both worlds: A private sale going on their Barlow Cres. home through ComFree and an agent willing to put their home on the agents' listing service.
What they got was a successful private sale and a caveat placed against their home by an agent who wanted $5,000 for doing nothing.
What they learned is that you cannot sign a agent's multiple listing agreement and continue as a private sale. They also learned you cannot always trust an agent to provide honest advice, and that signing an agents' listing service agreement is to the agent's advantage and never yours.
"We'll never use an agent again for anything," Brent said, as he explained how things went badly wrong for them last summer.
Their $200,000 South St. Vital home went on the market with ComFree in early June. On June 24, the Gilchrists showed it to a Kenora doctor. He liked the home, but not the late 2003 possession date the Gilchrists wanted to allow their new home to be finished. He didn't make an offer and the Gilchrists thought he never would.
On July 4, an agent with Re/Max Portage Ave. franchise contacted them. She said she'd moved here from B.C. where agents were used to working with private homesellers. She offered to put them on the agents' listing service for 3% and work in parallel with their private sale. Brent said the agent explained that other agents wouldn't like this arrangement and she might get into trouble, but she would give it a try anyway.
"I proposed a flat fee of $5,000 if she brought the buyer. She accepted," Brent said. And on July 10, the agent's listing contract was signed.
"She understood I would continue to show and advertise the home privately. She knew that our understanding was that if I sold the home there would be no commission paid to her. In fact," Brent added, "I said at the end of our meeting 'may the best man win'."
"She knew the ComFree sign would remain because she asked if her Re/Max sign could be placed next to the ComFree lawn sign," Valerie added.
Over the next few weeks, whenever an agent was about to show the home, the agent would call the Gilchrists and ask that the ComFree sign be removed for the showing. "Our neighbours kept seeing that sign go up and down, up and down," Brent said.
So, the Gilchrists thought they still had a private sale, along with an agent listing.
But what the agent hadn't explained is that the agent's listing agreement makes that impossible. Buried in the fine print is the condition that if a home sells during the listing period, under any circumstances, no matter whether the agent was involved, the agreed-upon commission is still owed.
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"If the agent had explained that, we would never have signed," Brent said.
There is a provision in the contract to exclude someone in particular, but the Gilchrists didn't name the Kenora doctor because they didn't think he was still interested, and they assumed that since they still were still running a private sale he wouldn't fall under the agreement anyway.
Even when Brent called the agent to inform her he was lowering his price on the private sale, but wanted to maintain the asking price on the agents' listing service sale, she failed to disclose the truth.
After several weeks passed and no offers were forthcoming from agents, the couple called the Kenora doctor to tell him they were willing to be more flexible on the possession date. He eventually called back and arranged another viewing with the Gilchrists, where he made an offer. They accepted and the home was sold.
The doctor saw the home while it was still solely a ComFree private sale and at no time did he have any dealings with the listing agent, or any other agent, regarding the Barlow Cres. home.
Though the home was sold and Brent called the Re/Max agent to inform her, it continued to appear on the agents' listing service net site as unsold for weeks after. Then the agent stopped returning their calls.
On Sept. 5, the Gilchrists received a call from their lawyer to say that Re/Max had placed a caveat against the home for $5,000. This was their first inkling that the "dual listing" had been a myth all along. A myth the agent had done nothing to dispel.
Furious, the Gilchrists appealed to the franchise's broker about what they felt was grave misconduct. They laid out their case, but were told to "just pay the $5,000."
Now, they are preparing to appeal to the Manitoba Securities Commission, the licensing body for all agents.
ComFree has often warned about the dangers of using the real estate board's listing contract. It's impossible to sign it and remain a private sale.
But people have come to ComFree because they want to maintain control over their sale. For that reason, lawyers associated with ComFree have prepared a form, Agreement to Show Private Properties, which allows a homeowner to strike a side deal with an agent and still maintain a private sale. The board's agreement, which favours the agent, can be avoided. If the agent brings the buyer, he's paid the agreed commission. If the owner sells privately, there is no commission. The form is provided in the public interest.
"If we had used that form, we wouldn't be facing this issue today," Brent said.
ComFree is vitally interested in what happens to the Gilchrists and we promise to keep you updated. |
