Real Estate Buyer’s Agreement – Who is Responsible?

In this interview, Brian Spitz and Kevin Price interview Daryl Bailey from Looper Reed & McGraw P.C. regarding a recent court case where a buyer signed an agreement with one agency, and eventually purchased a property through another one. When the original agency sued due to a breach of contract, the juried trial ruled in favor of the buyer, stating that the agency should have had better contact with the buyer.

Check out the full interview for the details of this interesting case! For more about Daryl Bailey, visit the firm’s website.

Full Transcript

Kevin:        Welcome back to the Price of Business. I’m your host, Kevin Price, talking about you and your business. Going to get to spend some time with my friend, Brian Spitz. And he is an extraordinary entrepreneur with a company called

Brian, let’s get started with you telling us a little bit about your great company. And then introduce your guest for us today.

brian-300x300Brian:         Sure. Good morning. I’m Brian Spitz with Big State Home Buyers and what we do is we are a seamless service company that buys properties from sellers. We buy the property, we close cash quickly. We solve title problems. We do everything that needs to be done. And then we work with investment clients to help build their investment portfolios, by matching them with properties that work for their investment strategy.

Kevin:        Awesome.

Brian:         So we do easy buying and we also do the selling.

Kevin:        Awesome. And your guest today?

Brian:         Today we have Daryl on the show, who is a real estate attorney. And we are going to, what I wanted to touch on today, Darryl and I talked a little bit, was about this court case that was just decided with buyer’s representation agreements. So I wanted to see if we could talk a little bit about that today.

(0:01:23.8) About Daryl Bailey

Kevin:        That’s great. Daryl, can we get your full name and your website real quick?

Daryl:         Daryl W. Bailey. My website is Looper, Reed and McGraw, or

Kevin: Real quick, tell us about your firm and then we’ll have Brian pose that first question for you. Go ahead and tell us real quick about your firm before Brian’s question.

Daryl:         Started in 1985. We are a Texas-based firm with offices in Dallas, Houston and Tyler. We have a little bit more than 120 lawyers. We provide full services in litigation, transactional work, estate planning, healthcare, bankruptcy, transactional work, international work and a number of other areas. Family law. A number of other areas.

Kevin:        Brian, your question?

Bailey_Daryl_432x262-300x181(0:02:22.4 – Court Case involving Buyer’s Representation Agreements)

Brian:         So being that your specialty is in real estate law, I just wanted to pick your brain a little bit about this court case that was just decided the other day. Tell us a little bit about that.

Daryl:         It was a case brought by a person who had signed what was called a Buyer’s Representation Agreement with a real estate firm, who was seeking property in a certain area of the city. There was time passed. Apparently the person that he had initially had his relationship with at the real estate firm left and his contention was that he then didn’t get anybody to contact him at all about him trying to find property in, I think in the Rice University area.

He met, coincidentally, some other person at, I think, a social gathering. I’m not sure about that fact. But in any event, another realtor he met subsequently, and that realtor assisted him and found a piece of property available that he eventually closed on.

The firm that he had had the six, I think it was a six-month Buyer’s Representation Agreement with then claimed that they were owed a commission on that transaction, on his purchase, because they were to be the exclusive and sole representative of him for purchasing a property.

The case went to trial. And the jury found that he was not liable for the commission being claimed by the real estate firm. And I believe the jury also found that the firm, the real estate firm had breached the contract prior to their claim about the property being sold.

Brian:         That’s a really interesting case there because those Buyer’s Representation Agreements, what those are is when a realtor is working with a client who’s looking to buy a house, it’s an agreement that binds the relationship for six month, where if that client buys a house, they’re to work with that realtor. So it’s real interesting that a court found in favor of the buyer and not the agency to protect the agreement.

Daryl:         Well, and I want to be clear here that this wasn’t a trial to the judge. So it was a verdict by a jury and, again, I have not obtained what the charge is, what the questions are that were presented to the jury. But I believe that part of the basis of the verdict was that they found that the real estate company had breached the contract and in those cases, if one party breaches the contract, then you don’t, you’re not able to recover for an alleged breach of the other contract, if the contract has previously been breached.

Now, again, I’m hesitant to say unequivocally that that’s what happened in the case. But that’s what I recall reading in the newspaper.

(0:06:01.4 – Possible Implications of Lawsuit Results)

Kevin:        Let me ask you. What do you consider the potential implications of this? How would it change the way real estate business is conducted?

Daryl:         Well, you know, again, we’ve had a verdict at a trial level, and as you guys know, there are oftentimes appeals of these cases, so I don’t think that you can say for sure that the jury verdict will necessarily hold up on appeal. But obviously, I think the message that is, at least was sent out of the facts considered by this jury is that you can’t, quote unquote tie up somebody and not service them.

And I think that’s, when his contact left the real estate firm, again, from the reading of the report from the Chronicle, it sounded as though that his contention was that so then, nobody paid any attention to me or helped me.

Brian:         Uh-hmm. Yeah. Right.

Daryl:         And so, I think what you can glean from that is just because somebody leaves, if you’ve got this Buyer’s Representation Agreement that’s with a particular firm, you better assign somebody to that person and be active in trying to assist them. Because if they find it otherwise, because the real estate firm was not active in really trying to help him because the person who he had the relationship with had left that firm, then it sounds like the jury says, well, then he went out, someone else discovered that he was looking for real estate. And so if you “did nothing” to …

Kevin:        Daryl, I have to kind of wrap it up. So I need you to wrap it up. Sorry. Go right ahead.

Daryl:         No, if you did nothing to assist in that transaction, then you’re not entitled to your commission.

Kevin:        Yeah. Sounds pretty potentially brutal. But again, you have to fully be settled. Those kinds of courts will run.

Brian Spitz. He’s with

Daryl W. Bailey. He can be reached over at

Gentlemen, thanks very much. Important conversation that people need to be aware of. Thanks to both of you.

Daryl:         Thank you for having me.

Brian:         You’re welcome.

Kevin:        You bet. When we come back, much more for you. I do want to remind you what you hear here shows up over there, at And this is the Price of Business.


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