Just when you think Sitzer-Burnett and Moehrl classs-action, listor-oriented, commission and compensation lawsuits finished the chapter, we learn of a buyer rep, class action suit brought forth in Federal Court in the Eastern District of Pennsylvania. This is the same logic as Sitzer, but applied to the buyer side.
Let me put this in perspective before diving into detail. Sitzer and Moehl where Listing agent suits that asserted the split of the fee charged by the listing agent served to deny the parties of a negotiated price and artificially inflated prices
In the Pennsylvania case, we will call Davis v Hanna, Scott Davis sues his buyer rep who he conspired with other National Association of Realtor members to inflate the commission that was a part of the price.
There is an important lesson here. Disclose fees (how much, from whom and to whom), seek a sign off that the client is aware of the fees, keep communications open and relationship health as a key component of the transaction; use satisfaction and value letters to close a relationship so you have something to show for the services you rendered.
By satisfaction and value letters I mean survey the customer. Was my service excellent; was the value of my services worth the price you paid; were disclosures of my fees and earnings fair. Every day, I strive to be the best! “Do you have any comments on my service”. It is acceptable to make self serving statements for the record (i.e. Yes, you put in a lot of hours, called on much of my experience but with you’re and my teamwork, we were able to close at a fair price.)
Be so very careful in today’s legal environment. The general public will be best served if we explain and show the value of the services we delivered. Document that fees were disclosed as soon as they are known, have the client sign off on fees, and document your clients level of satisfaction
On a separate subject, I always suggest, buy Errors and Commissions insurance. It may or may not be applicable but with the cost of legal representation it might well prove worthwhile.