Is this typical of Houston Realtors

[dalparadise]

Never heard that law before. Care to explain why it is not a "legal contract"?

I certainly can't cite the law, but I do know that there is a law that states that only a licensed Realtor may draw up a TREC contract. As I understand it, even an attorney cannot use the TREC form or participate in commissions, as they are defined in that form. During my brief stint as a Realtor, I didn't even have my own access to the forms until my representation was conferred through my broker. It's to keep individuals like the builder from attempting to draw up legal documents without any supervision. In a Realtor's instance, TREC and his broker are the supervising authorities to ensure the contract is handled appropriately. A Realtor and his broker risk losing their license if it isn't.

Never heard that law before. Care to explain why it is not a "legal contract"?Here is the disclaimer on TREC's website:Note that it says the forms are available to ANY PERSON.However, since TREC does not give out legal advice, they advise getting help from a qualified person...big difference from what you claimed.

Okay -- it looks like things have changed a bit.Though, I'd still argue an "unenforceable" contract is a good as an illegal one. Right?

[RedScare]

I certainly can't cite the law, but I do know that there is a law that states that only a licensed Realtor may draw up a TREC contract. As I understand it, even an attorney cannot use the TREC form or participate in commissions, as they are defined in that form. During my brief stint as a Realtor, I didn't even have my own access to the forms until my representation was conferred through my broker. It's to keep individuals like the builder from attempting to draw up legal documents without any supervision.

In a Realtor's instance, TREC and his broker are the supervising authorities to ensure the contract is handled appropriately. A Realtor and his broker risk losing their license if it isn't.

I've used them for every property I have ever bought. Here they are, ready for download to any person that wishes to use them...

TREC Forms

Not to be blunt, but anyone can use those forms, including builders and FSBOs. That is what they are there for.

EDIT: An unenforceable contract is one that you cannot enforce in court. In other words, if the other side violates the contract, you cannot do anything about it. It is not illegal, as in criminal, merely unenforceable. However, the rest of the contract, other than the unenforceable part, is still valid.

Edited August 16, 2007 by RedScare

[dalparadise]

I've used them for every property I have ever bought. Here they are, ready for download to any person that wishes to use them...

TREC Forms

Not to be blunt, but anyone can use those forms, including builders and FSBOs. That is what they are there for.

I understand and accept that. The point about them being "unenforceable" if not executed by a trained person seems pertinent to this discussion, though, doesn't it?

[RedScare]

Absolutely. However, just because an untrained person fills out the form, does not in and of itself make it unenforceable. The forms are fairly self explanatory, IF you know some basic real estate terms, such as who is the grantor and who is the grantee, etc.

In this case, it sounds like the buyer's agent portion was left empty on purpose, not by accident. BUT, the bigger issue is that an executed contract cannot be changed by a 3rd party AFTER the fact, without each party agreeing to the changes. That is what makes it criminal.

[dalparadise]

Sheesh, we're replying to one another faster than we can read the replies. Sorry about that.

I will absolutely defer to the attorney on legal matters. I was merely trying to shed a little more light on the shady nature of this particular transaction. Bottom line -- if canadian had a good Realtor or lawyer in his court, he would have avoided all this.

[canadian]

By the way -- even though you may not have initialed the buyer's agent change on the contract, I am certain that you signed an intermediary designation form, or else the contract could not have closed. In that, you agreed to allow the broker to designate your agent.

All I initialled was a page 9 titled "Broker Information and Ratification of Fee", which sheet was essentially blank. The builder also initialled this sheet, and the title company sent us a copy of the executed contract by snail mail. I did not sign any intermediary designation form (if you discount unauthorized additions by the Realtor to page 9). Since I did not have broker represented in the contract, I'm not sure how we ended up with an agent.

[dalparadise]

All I initialled was a page 9 titled "Broker Information and Ratification of Fee", which sheet was essentially blank. The builder also initialled this sheet, and the title company sent us a copy of the executed contract by snail mail. I did not sign any intermediary designation form (if you discount unauthorized additions by the Realtor to page 9). Since I did not have broker represented in the contract, I'm not sure how we ended up with an agent.

Okay -- Redscare can correct me if I'm wrong on any of this -- until fairly recently in Texas, real estate agents in Texas represented only the seller, in terms of fiduciary responsibility. They were marketing managers for hire, essentially. Then, the concept of buyer's representation was introduced. This presented a small problem in that the way things work in real estate is that a broker may have hundreds of agents in several offices across the city and state working for him. Thus, two agents from completely different offices on opposite sides of town can be working a transaction for the same broker. That broker can't take on fiduciary responsibilities for both the seller and the buyer without a signed agreement from both parties that allows him to assign an intermediary -- which is always from his own office. The Broker can therefor collect both sides of the commission and distribute it to his salespeople as he sees fit.

Because this presents a potential conflict of interest, it is fairly closely regulated. That's why, I'm sure, if you look through your mountain of paperwork, there is some form where you signed off as willing to accept intermediary designation. The title company would not have disbursed both funds to the same brokerage without it.

That's the form that will probably help your sleaze skate on this.

[HoustonRealtor]

That's why, I'm sure, if you look through your mountain of paperwork, there is some form where you signed off as willing to accept intermediary designation. The title company would not have disbursed both funds to the same brokerage without it.

In a perfect world, perhaps. In reality, this may not be the case.

[canadian]

Just wanted to bring this issue up to date!

It turns out that the "buyer intermediary" did not have his realtor's license, and was not even in the employ of the real estate company when we closed on the house!

To dalparadise: Checked all our paperwork. Other than page 9 of the TREC form where the realtor had inserted the "buyer intermediary" and seller agent information, we have never signed off on having realtor representation.

I understand that the builder has filed suit with the realtor for various issues, including deceptive practices.

Thanks to everyone for their help.

[MiDTOWNeR]

Sounds like good ole "UL"

[canadian]

Sounds like good ole "UL"

I'm surprised so many people are aware of this, yet nothing has been done about it! They seem to have a virtual lock on a particular segment of the market and both builders and customers lose in this process. I say this because I've come to know that this is not an isolated incident and is pretty common with this company. I thought in a free market, the system pretty much regulated itself by weeding itself out of entities that makes it inefficient.

[HoustonRealtor]

I'm surprised so many people are aware of this, yet nothing has been done about it! They seem to have a virtual lock on a particular segment of the market and both builders and customers lose in this process. I say this because I've come to know that this is not an isolated incident and is pretty common with this company. I thought in a free market, the system pretty much regulated itself by weeding itself out of entities that makes it inefficient.

I think many builders just see the volume of listings held by the company and assume that listing with them is the best way to go. They also have a prominent office (showroom, really) location. The traffic is there and the homes, townhomes and condos sell. Builders want to sell homes and this company has a record of being able to do just that. I don't think that it's until later that some builders realize who/what they are really dealing with.

[Dream]

The information in this thread is priceless. I really appreciate everyone's comments, this is exactly the kind of information that can help someone from not making the same mistake in the future.

Dream