What constitutes a REA property introduction ?

Hi All,

What do you believe constitutes an introduction to a property ?

Often a property may be listed with multiple agents, if you are discussing property with a REA and your already aware of a specific property by seeing it advertised, doing your own research & maybe a drive by.....

If you call and agent to ask them about the property, is that an introduction ?

If you call to speak with them and multiple REAs mention a specific property, is that an introduction ?

And then you have the practical of them trying to claim commission, i.e it may not be worthwhile anyway.

I would think that an inspection may be the trigger.


What happens if you look at a place with an agent, then the agreement runs out, vendor signs another REA and you decide to buy when second REA has the property, I can see the contract may come into play, but as a buyer your not privvy to this.

 

A viewing with an agent, seeing the signboard or advert may all trigger an introduction. If you then approach the owner directly there may be cause for concern but it's not your problem as buyer, just declare it on the contract.

If you buy through another agent, declare it. Timeframe will also be important eg inspection 6 months ago and you'd moved on then it's relisted or negotiations fell through at some stage.

 

The advert or a agent mentioning on phone would be a stretch from them, as they would have no idea when the others had spoken to me, in this case I have had 3 agents mention a specific property address when I just called them about something else.

Prior to that I had seen 3 ads with the property, but I did not contact any of them or even know whose ad was first seen as they were in the same search.

But that had me thinking, as I have been asked prior to declare to vendors solicitor that I had not been introduced by another agent, trying to put onus onto me.

 

@dabbler unsurprisingly, there is a body of case law about this. My mate was being shafted by a law firm so I researched the case law for him and wrote up a submission. I think I posted some details on here. I will try to search when I get a chance.

Short answer: it's complex and a bit subjective.

 

@dabbler here are some cases that set out some general principles:

In LJ Hooker v Adams, the High Court found that an agent will be entitled to commission where the agent introduces a person to the vendor or property who ultimately becomes the purchaser of that property. However, the agent must show that the introduction was the effective cause of the sale.

Effective cause means more than merely being a cause of the sale. The question is whether the actions of the agent really brought about the relation of buyer and seller: Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) NSW ConvR 55-978.

Where the agent has shown a prospective buyer the property or even procured an offer to the vendor which is unsatisfactory to the vendor, the agent's performance may not be the effective cause of the sale. Disputes as to whether the effective cause test is satisfied can arise in various circumstances.​

When Is A Real Estate Agent Really Entitled To Commission? - McCabes Lawyers

The meaning of the phrase “effectively introduce” is fairly well settled according to the authorities. It is immediately to be contrasted with cases that involve mere fact of introduction. The following propositions are to be found in the authorities:

a)The agent must establish the necessary causal relationship between its actions and a particular sale, in this case that the sale effected on 22 June 2014 was brought about through its agency.

b)‘Effective cause’ means more than simply ‘cause’. The inquiry is whether the actions of the agent really brought about the relation of buyer and seller and it is seldom conclusive that there were other events which could each be described as a cause of the ensuing sale.​

What do you do if your former agent claims for commission after your property is sold by another agent? | CS Lawyers

Vidaic v Nexus Estate Agents (Commercial) (2007) NSW CTTT 100
The mere inspection of the premises initially conducted by the vendor did not constitute an effective introduction.

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Agent slotted on $73K commission, not "effective cause" of sale to his buyers

 

Yeah, I think that my thinking of, that the commission would have to be high enough to warrant action, if the commission is 2-5k only an idiot would start an action, even 50k would be risky to litigate.

I think I get the gist of the law/rulings, and not much chance of many of them causing the sale, most of them are to lazy to get out of own way

 

Haha. Too true! I once had a real estate agent refuse to present an offer. I contacted the seller directly, set up a meet and negotiated a sale price within 15 mins. He fired the agent and told him he could sue him for the commission. Agent didn't pursue it.

That would have been a hilarious case. In court, so... did you cause the sale?
Agent: of course I did!
Me: actually, he actively blocked the sale.
Err... no commission!