Dear George: My wife and I called an agent off a 'For Sale' sign. She said she was the listing agent. She ended up showing us the home. We made an offer on it. The seller rejected our offer.

We liked the agent we met. We told her we thought we'd like to work with her on finding another home when we returned. About two weeks later she contacted us. She stated the owners had lowered the price on that home. We were very interested in submitting another offer.

However, we had just signed a representation agreement with a buyer's representative with another firm to handle our home search. The listing agent is checking with her broker. The buyer's agent is checking with her broker. We want to submit another offer on the home. But, we also want to do the ethical thing. Do you have any suggestions? -- Trying To Be Fair

Dear Trying: The listing agent may have originally introduced you to the property but that introduction resulted in a rejected offer. You did not decide to make a new offer until notified by the listing agent that the owners' had reduced the asking price. In the meantime you had entered into a buyer representation agreement with the other firm.

An unbroken chain of events leading to a consummation of the transaction did not exist. The listing agent is guided by her firm's listing agreement with the owners. Your agent is guided by her firm's buyer representation agreement with you. Under the circumstances you describe, I think you are being not only fair but also correct in your handling of this matter.

Dear George: What is the meaning of "procuring cause?" Several agents in our firm have experienced the same problem lately. Some buyers tell you, when asked, that they are not working with another real estate agent. You show properties to them. You later discover the buyer was in fact working with another agent. The other agent then writes up the offer. -- Help

Dear Help: John W. Reilly's book, "The Language of Real Estate," defines procuring cause as "that effort which brings about the desired result." However, Reilly continues for more than a page (in small print) further defining the term. In each case you likely need to consider the "facts and circumstances" arising from individual claims.

Question for Help: Why are you showing properties without a written buyer brokerage agreement, one which would offer significant protection in the event of conflicting commission claims?

Dear George: "I am a retired attorney. I am in my late 50s. I enjoy good health. I am also contemplating a second career in real estate sales. I understand the requirements for licensing through the state real estate commission. How should I select a sponsoring broker? I am willing to make a full-time commitment from day one. I am also highly motivated to succeed. Given the above, what earnings range should I expect to achieve after two years in the business? -- Motivated

Dear Motivated: You should expect to work a minimum of 50 hours per week as an independent contractor during the first two years. The majority of consumers are "free" to view properties after normal business hours or on weekends. Look for a brokerage firm that has been in business for at least five years, preferably more. Follow that firm's "success plan" to the letter.

Deliver what the consumer wants or needs. Deliver it at a price the consumer is willing and able to pay. If you apply all of the above, you can expect to make more than $150,000 annually. However, the "average" real estate agent makes closer to $20,000 annually.

Dear George: My wife and I bought our first home in July, 1997. The lender was a well-known, major mortgage firm. The loan officer assured us we would get a 7 percent loan. It ended up being an 8 percent loan. It was offered on a "take it or leave it" basis.

Then we got our property tax bill. The lender told us we had to cough up another $3,500 because our escrow account was short. It turns out that we bought "unimproved land." With the improvements (our home) the escrow amount increased to nearly $400.

The final insult occurred when we tried to get our PMI dropped. Our loan to value ratio showed we now had 26 percent equity in our home. We were told by the loan servicing company that their "investor" requires a higher equity in the home. We have never been late on a payment. Is there anything you can tell me regarding the legalities of PMI? When can we demand the PMI payment be dropped? -- Victimized

Dear Victimized: If your statements are accurate, I see what appear (to me) to be violations of federal lending laws, state licensing laws and the Real Estate Settlement Procedures Act ("RESPA"). You should consult an attorney. What you've described appears to be "predatory lending practices" at their worst.

Dear George: I disagree with your regarding mold and insurance coverage. If the mold results from a covered water loss, the resulting mold-related damages may be covered under the policy. Not all mold losses are excluded in the policy. Mold that results from a non-covered loss is definitely not covered. I worked for an entity handling consumer complaints including mold claims. -- FYI

Dear FYI: Thanks for pointing that out to our readers.

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George Stephens welcomes your questions by e-mail. Because of the volume of mail received, questions cannot be answered individually. Mr. Stephens is not a lawyer and this column does not contain legal advice. If you wish to obtain legal advice, please consult with an attorney or legal clinic.

Published: June 22, 2001

Use of this article without permission is a violation of federal copyright laws.

George C. Stephens, CRB is the Broker of deRaat Stephens, Inc. dba ERA Stephens Properties and the Director of Compliance for eRealty, Inc. Stephens served as 1998 Chairman of the 13,000+ member Houston Association of REALTORS® and is the Vice Chairman of HAR’s wholly owned subsidiary, e-Har, Inc. He is the 2001 Secretary/Treasurer of the 50,000+ member Texas Association of REALTORS® and TAR’s 2002 Chairman-Elect. Stephens holds a Texas Real Estate Broker license as well as a Texas Mortgage Broker License.