Q: I made a bid on a house recently but the owner didn't accept it and took the house off the market. If the owner decides later to give the house to another real estate broker or sells it himself, would I be legally obligated to give a commission to the original realtor if I make another bid?
A: Unless you have entered into a specific contractual obligation with a real estate broker, you will not be obligated to pay any real estate broker if you buy the house.
There are situations where a buyer hires a real estate broker to be his or her agent and pays for servces. However, this is rather unique and, as a general rule, the real estate broker or agent works exclusively for the seller.
Thus, in your example, I can see no circumstances where you would be obligated to pay any real estate commission to the broker.
But if you buy the house, having seen it while it was listed with Broker A, can that broker legitimately demand a commission from the seller?
In most cases, Broker A would not be entitled to a commission. You have to look at the written listing agreement between the broker and the seller for a more definite answer.
Usually, the broker only obtains a commission if he or she finds a buyer who is ready, willing and able to purchase during the term of the listing agreement. But occasionally brokers are covered by protection clauses that automatically extend the listing for a reasonable period of time.
The courts have been rather unfriendly to these automatic extensions, and in most cases, the seller would not be obligated for a commission. However, in at least the following types of situations, the courts have determined that a broker is entitled to a commission from a seller even if he or she failed to find a purchaser within the period of the listing:
* When the expiration of the listing period was attributable to the bad faith of the seller. In one instance, when the owner deliberately postponed an agreement with the broker's buyer until after the termination of the listing, hoping to defeat the broker's claim for a commission, the courts nevertheless awarded the broker a commission.
* If serious negotiations begin within the time specified in the listing contract, continue without interruption, but are completed after the end of the listing period, the broker may be entitled to a commission, the courts taking the position that the seller has waived or implied that the time limit would be.
However, from the buyer's point of view, you can rest assured that you will owe no commission to any real estate broker. You may want to include a provision in your sales contract stating that "the seller represents and warrants that there is no real estate broker involved in this transaction."
Benny L. Kass is a Washington attorney. Write to him in care of the real estate section, The Washington Post, 1150 15th St. NW, Washington 20071. For a copy of the free booklet, "A Guide to Settlement on Your New Home," send a self-addressed, stamped envelope to Benny L. Kass, 1528 18th St. NW, Washington 20036.