# Paying commission to an agent if you find your own house



## frdm45 (Aug 20, 2010)

I've started looking for a house to purchase in another province. This will be my principal residence. I haven't signed up with an agent yet. I feel that buying directly gives me a bit more bargaining power as there's no purchasing agent involved asking for his/her share of the commission. I've purchased many houses before and I'm quite familiar with the process.

After the negotiating process fell through on the last offer, the selling agent was trying to convince me to use her as my agent. I haven't signed up with her so far but she was very good at highlighting the advantages of using a representative.

My question is: if I were to sign up with a purchasing agent and I ended up buying a house through an "agent-less" system (DuProprio in this instance), could the agent make a legal case that I still owe her commission even though she wasn't involved in the transaction?

For anyone not familiar with DuProprio, it's a real estate advertising system in Quebec that allows you to sell your property without using an agent. You also have the option of listing your property on MLS for an additional fee. It's a great deal from a seller's perspective as they don't have to pay the 4-6% commission. The disadvantage is that agents on the purchasing side tend to stay away from these properties for sale because they're "not part of their system"

Hence my question....if the seller doesn't pay a seller's commission to an agent and I purchase a residence without getting my agent involved, can my agent claim that she's legally entitled to be compensated because I signed a representative agreement?


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## Spudd (Oct 11, 2011)

You don't need to sign anything to have an agent working for you as a buyer. The only time you should sign something is when you're actually making an offer. Otherwise, indeed, what you are afraid of may come to pass. And when you sign the representation agreement as part of making the offer, you can add words to it that say "only valid for offer on X address for X period of time". The agent will want their commission and will not refuse you to make this change.

http://www.greaterfool.ca/2014/06/08/bra-talk/


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## Mukhang pera (Feb 26, 2016)

I do not wish to sound uncharitable, but if you have purchased many houses, as you say, you should already know the answer to your question. 

While I recognize there are some variants, the usual rule is that any commission is paid by the vendor, but it will be shared if an agent other than the listing agent introduces the purchaser.

You speak of signing up with a purchasing agent. I have never "signed up" with any agent when I have been the purchaser. I have allowed a few agents to show me some listings and, on one occasion, I bought a house to which that agent introduced me, even though another agent had the listing. I did not pay a commission.

Anyway, the real answer to your question lies not in what I or anyone else on this forum might think. It will depend upon what is agreed between you and your "purchasing agent". If in fact you do "sign up" with such agent, presumably whatever document you sign will set out the respective obligations of you and the agent. So, if you "purchase a residence without getting [your] agent involved" if your contract says that you must pay the agent something, then the agent can make a case for being "legally entitled to be compensated". I'll leave aside for present discussion purposes any notion that, even if your contract calls for you to pay in such case, that provision just might not be enforceable for want of consideration.

So, to reiterate, clarify with your agent your mutual expectations. It will be of little utility that, should you fail in that regard, and your agent demands payment, you come back with the response that someone of CMF advised that you would not be on the hook. And that will apply _a fortiori_ if you say the advice came from me. Just ask our esteemed member Carverman, who will tell you I am a pretend lawyer who has nothing useful to contribute here and who only serves to deceive newbies with ill-considered advice and misinformation. You've been warned!


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## Mortgage u/w (Feb 6, 2014)

As the others said, you do not 'sign up' with an agent when purchasing so the agent is not entitled to anything. Unless you have them draft the purchase offer for you, then they will definitely have you sign a exclusive brokerage contract so they get their cut from you. I strongly discourage you from doing this because if the sale falls through, that agreement is a separate document and can keep you on the hook with that agent for your next purchase. 

Keep it simple. Either you get an agent to do all the research and negotiating for you OR, you do it all on your own. Under any circumstance, DO NOT sign any exclusive contracts with any agent.


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## twa2w (Mar 5, 2016)

Actually it is becoming common to have a ' purchasing' agent.
Under the old system an agent would help you look for a house but legally, because they were paid by the vendor and had no contract with you, they acted in the best interest of the seller.
Now some agents who represent the buyer will have a contract with the buyer to act in their best interest. They have a contractual obligation to act in your best interest and to try to obtain the best price for you and assist you with obtaining paperwork and documents.

The OP should read any contract carefully. He can of course include a clause that the agent will not be paid on any house the buyer finds on his own.


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## TomB19 (Sep 24, 2015)

Every buyer's contract I've seen stipulates the buyer will pay commission to the agent on any house purchased during the life of the contract.

I've never signed a buyer's contract. No need.

If I talk to a selling realtor regarding double agency, I feel no loyalty to that agent. If a realtor shows me a home and they do their job properly, I feel that realtor deserves my business. Don't ask a realtor to show you a bunch of houses and then steer your commission elsewhere. It happens all the time but it's not right.


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## OhGreatGuru (May 24, 2009)

Whether or not it's legal, I think it would be unethical. If the agent knew you were going to do this, why would they waste any time trying to find you a place? If you find a place yourself, the proper thing to do would be to inform the agent and ask them to check it out and handle the deal for you.


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## frdm45 (Aug 20, 2010)

OhGreatGuru said:


> Whether or not it's legal, I think it would be unethical. If the agent knew you were going to do this, why would they waste any time trying to find you a place? If you find a place yourself, the proper thing to do would be to inform the agent and ask them to check it out and handle the deal for you.


This brings me back to my original question....will I be held responsible to pay my agent's commission if I purchase a house from a seller who's selling privately?

Unless I'm mistaken, the seller pays the commission. The selling agent splits the commission with the buyer's agent. The buyer doesn't pay any commission.

I agree with you that if the agent spends time helping me looking for a property, they should definitely be compensated for their time and effort. But what if I personally find a house where the seller doesn't sell through an agency because they want to save the 4-6% real estate fee?

I'll talk to the agent and get this cleared up. More to follow....


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## Spudd (Oct 11, 2011)

frdm45 said:


> This brings me back to my original question....will I be held responsible to pay my agent's commission if I purchase a house from a seller who's selling privately?
> 
> Unless I'm mistaken, the seller pays the commission. The selling agent splits the commission with the buyer's agent. The buyer doesn't pay any commission.
> 
> ...


If you signed an agreement with the agent, then indeed, you may need to pay them a commission (or, more accurately, negotiate the sellers of the house you want to buy to pay the agent's commission). If you didn't sign anything, and they took you to see houses, but on your own you found this privately listed one (without their help) then you are under no obligation to pay them commission as long as they don't get involved in the sale.


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## kcowan (Jul 1, 2010)

The usual practice is that the seller pays the agents. That means that half of it goes to the buyers rep. If there is no buyers rep, the listing agent claims both sides. A buyers agent must negotiate a share of commission from the sellers agent.


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## carverman (Nov 8, 2010)

Mukhang pera said:


> And that will apply _a fortiori_ if you say the advice came from me. Just ask our esteemed member Carverman, who will tell you I am a pretend lawyer who has *nothing useful to contribute here and who only serves to deceive newbies with ill-considered advice and misinformation.* You've been warned!


Lets not go there again please. If it is merely your opinion here just like the rest of us "oldtimers", AND just an opinion (or speaking from
personal experience) and NOT misleading or misconstrued, and it doesn't constitute "legal" advice, it is perfectly alright with me.:wink-new:


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