When the Broker You Sign with Sues You

WHEN THE BROKER YOU SIGN WITH SUES YOU When you’re looking to buy a home, do you sign an agreement with an agent before that agent has shown you any properties? Testifying in a trial going on now at the Harris County Civil Courthouse downtown, a former VP of sales for real estate firm Urban Living says it was the firm’s policy not to show customers any homes unless they’ve signed a buyer representation agreement first. And that’s what’s landed Christopher Drummond, buyer of the townhouse drawn above at 4245 Dickson St. in Magnolia Grove, in court: The parent company of Urban Living is suing Drummond for the commission it says the company should have earned in 2011 after Drummond found and purchased the home using a different broker. Drummond claims Urban Living didn’t explain what the agreement required of him when he signed it, and that the company hadn’t used its “best efforts” — as the document requires — to find him a home. Drummond heard about the Dickson townhouse, then under construction, from a Sudhoff Properties agent he met at a party. Nancy Sarnoff has been tweeting live from the trial, which is expected to continue into next week. [Houston Chronicle ($); more on Prime Property] Drawing: NuHabitat

18 Comment

  • I’ve always wondered how the “I didnt read it before I signed it” defense would work.

  • Good job, Urban Living. Way to make sure you never earn another real estate commission.

  • I recall reading “Looking Out for No. 1”, supposedly a self-help book, but actually is all about real estate and how not to wind up like Urban Living. Dreadful book; astonished it is still in print.

  • Wouldn’t it be easier for Urban Living to sell some more crackerboxes to new clients rather than spend time and money chasing this one guy that got away?

  • Career real estate agents are the slime of all “professionals”.

    I had a similar experience. My original agent said she would ‘drop’ the agreement if I was unhappy. I told her I was unhappy, then she decided she didn’t want to drop it. I ended up buying her off to avoid this. But here is the lesson: DO NOT SIGN AN EXCLUSIVE AGENT AGREEMENT, IN ANY FORM… and if you’re smart, you wont use any firm / person that requires one. HONEST ADVICE. Beware.

  • From twitter: Greenwell (defendant’s attorney) repeats what Ramani said in previous deposition: that he’d spend $1,000 to collect $1.


    This is fantastic publicity for Urban Living, right?

  • I know never to sign with Urban Living. Appreciate the heads up.

  • When I was home shopping a few years ago, I stopped by Urban Living since I didn’t have a realtor. They tried to force me to sign that document. I told them no. One of their managers got upset when I question the policy. They also tried to lock me in for the entire city limits of Houston, which are massive. Real estate is very localized and there’s no way that one realtor would be an expert in both the different city neighborhoods and burbs (e.g., Summerwood) that fall w/in the Houston’s jurisdiction.

    Also, Urban Living tends to represent overpriced, low quality developments.

  • no easier way to lose any respect i have for you then to expect me to sign exclusivity agreements like this. not that i’ve had to shop for homes in this nature, but i definitely never will after seeing this.

    it’s like when buying a car and they expect you to sign a non-arbitration agreement without being cursed out for denying me constiutional rights. these may all be good people, but they choose to do slimy work and become sleazeballs before they know it.

    agents and sales reps please take note as this is probably how most of the general public feels about you. just hazards of the job like anything else i guess.

  • And here I was thinking Sudolff was the only one screwing guys in Houston.

  • I’d *really* like to see how Urban Living plans to collect this commission from Mr. Drummond, even if the case is decided in their favor. Mr. Drummond already has a mortgage and presumably lines of credit and a car note (if not paid off), so I fail to see how a potential judgement like this would affect him greatly. Trying to get someone to pony up in a civil suit is also no easy task in Texas, even with the help of slimeball lawyers, who are most likely billing you obscene hours. At this point, Urban Living is really just shooting body parts off.

    If you’re a real estate agent who does your job well, your buyer will not “cheat” on you. Furthermore, I think it says a lot about a broker who requires a buyer representation agreement with ridiculous clauses.

    While I believe that people should be aware of what they’re signing before they sign it, many first time home buyers are overwhelmed and/or unfamiliar with the process and probably put too much trust in an agent who may not have their best interests in mind.

    Houston has enough real estate agents, so if your agent is lousy (and you haven’t signed a lousy agreement), dump him/her and get another. By now, isn’t everyone related to a real estate agent or has a friend who is one?

  • I am a Realtor. I do not usually require a rep agreement. And for this, I have been burned a couple of times. Buyers finding private sales, hearing from a friend about a house before it hits the market….and, three times in 8 years, buyers have dropped me because of me being out of town on a weekend when they saw a house come up, multiple offers we have lost, and a deal that fell through because of no fault of mine. Good agents….who are not slime, understand that these things happen. It’s a risk we take. But, I feel that if I do well: do a thorough job advising my buyers regarding return on investment, condition of the house (sometimes, you just have to walk away), keeping you protected, etc., I will still make a decent living, and match people to the right house, at the right price, in the right area. Thank you, good night.

  • Being in sales is a risk – either you present the product the consumer wants or you don’t and lose the sale. In general, I think it’s unethical to ask the consumer to commit financially to the agent/broker being the only source of the house or whatever it is. I understand the agent/broker wants to eliminate risk – wants to protect themselves against needless effort that doesn’t pay off sometimes because the buyer didn’t bite on anything they had, but that is the nature of sales. Just because it’s a big ticket item like a home doesn’t change things to me. Cars cost a lot of money too, and nobody I bought a new car from made me sign something that said “you can only shop for a car with me and if you find something on Craigs List you owe me my commission”. That’s just crazy.

  • I was also sued by Urban Living under the same circumstances – their agent quit and no one ever informed me. I found a house on my own and they came after me for commission. Urban Living systematically searches for their clients in HCAD and sues them for breach of contract when THEY are the ones who breached it first. I ended up paying as I could not afford to go to trial, so I hope this guy wins – Urban Living, and owner Vinod Ramani don’t deserve ANYONE’s business.

  • I have a real estate company on the side from my M-F energy job. I don’t use these agreements and don’t think they need to exist. If you gain someones trust by treating them the right way, they will not screw you. Fortunately I have never had to deal with Urban Living directly in a transaction, but have heard nothing but bad press about them. Again like so many have stated above, UL is probably securing a good chance of never making another commission again.

  • Here’s a bit of a contrarian view to some of the other postings here. Full disclosure: I have no relationship to Urban Living other than that I was a client – I bought one house with them and used them to lease out another. While, as with any other long relationship, things weren’t always perfect, I found Vinod, Lester (when he was with them) the agents and staff to be customer service focused and interested in my satisfaction. I was particularly picky on my purchase and spent over a year waiting for that “perfect” house to come along. I never felt pressured by anyone at Urban Living to do a deal on a home I ultimately wouldn’t have been happy with. They were always patient with me and all worked out in the end; I got that perfect home and they got a healthy commission on a purchase price that significantly exceeded my original budget. While one might question the prudence of pursuing Mr. Drummond in court, bottom line is that the client signed a legally binding contract. I signed the same contract, and while it wasn’t a complicated document, the agent provided full disclosure in advance (there was nothing underhanded), and I had no qualms signing. Urban Living has expertise on the Washington Avenue “corridor” and I had no intention to utilize other realtors during the 6-month period. Mr. Drummond was lucky, in my opinion, to prevail in this case given his stated ignorance relative to what he was signing. I wouldn’t recommend feigning ignorance on future signed contracts he claims not to understand — I’m guessing he would be laughed out of the court room more often than not. My advice to potential Urban Living clients, don’t be swayed by a small sample of negative comments here — do your own due diligence and pick the realtor that best fits your situation. If the Washington Avenue corridor is where you want to be, few if any realtors are better positioned to get you into the house you want to be in! And one final thought… For all the annonomous crap that is written about Vinod, I would think he has been as instrumental as anyone in taking the urban blight that was the Washington Avenue corridor and helping to resurrect it into one of the most desirable “Inside the Loop” locations.

  • Drummond should have read the contract. We all know that he knew exactly what he agreed to with Urban Living and instead of admitting it, he now wants to claim that he didn’t understand it. Urban Living offered to work with Drummond on that basis and Drummond wasn’t forced to sign the contract. If he or any of the other complainers on this comments page don’t like the exclusive nature of the arrangement, they shouldn’t sign in the first place. We’re informed adults and should be accountable for our actions.

    Bravo to Urban Living for standing by their principles, even if they did lose the case and spend lots of money on it.

    And, no, I have no affiliation with Urban Living or the real estate industry.