Legal Hotline: What do I do About an Unrepresented Buyer?

The Question: An unrepresented buyer attended my open house and scheduled a follow up showing with me. I answered all their questions about the property and now they want to submit an offer using a buyer’s agent. Can I tell the buyer they can’t use their own agent at this point?

The Answer: No.

A buyer may choose who they want to represent their interests in a real estate transaction, and a listing agent has no authority to deprive a buyer of that right. In situations such as this, however, there may be a question of procuring cause. While the listing agent may not be obligated to compensate that buyer broker, they are still obligated to cooperate, unless it is not in the best interests of the client (See Code of Ethics, Article 3).

REALTORS® must take care to not allow issues pertaining to compensation to interfere with their clients’ interests. While brokers may discuss and negotiate compensation at any time during the transaction, if at any point the situation becomes antagonistic, those discussions should be placed on hold until the transaction has closed.

Buyer brokers are encouraged to use Buyer Representation Agreements with every buyer client they are working with. Having such an agreement is particularly beneficial when a buyer broker is invited into a transaction where their ability to be compensated as the procuring cause may be in question. Having such an agreement in place does not eliminate the buyer broker’s ability to seek compensation from the listing broker, or otherwise through the transaction, but provides a layer of protection for that buyer broker’s interests in receiving compensation for their efforts in a transaction.