Of course, the broker must note in his records the price an owner is asking for property he wishes to sell. The broker's knowledge should tell him whether this price is fair and reasonable or not. Such knowl edge is acquired only by experience in making sales himself and by keeping careful notes of sales made by other people whenever this information is obtainable. The broker ought to know if sales of similar property in the same neighborhood have been made and the prices obtained at such sales. He should be able to form an opinion as to the present market value of the property, its value as indicated by the rents it produces and also the possibility of its increasing its value, due to changes in the neighborhood, sidewalks, sewers, water, gas, projected transit lines, increased rents, etc.
Many owners list their property with the broker with the idea of having him find them a purchaser. If a person seeking to buy property comes to the broker, the broker goes over his list with the prospec tive purchaser, makes a note of what probably will suit the person best and shows these properties to him and then tries to close him on one of them. Some times the broker has nothing in his books to suit the buyer. Then he looks around and tries to find some thing. He may try for months before he finds the property the buyer wants. Again, a salable piece of property may come to the attention of the broker and he will endeavor to find a buyer for it. Often he is successful and makes a good commission. Fre quently he does a great deal of work from which noth ing comes. While an important transaction brought about pays the broker well, the business is full of disappointments. Impressions may be made, trans actions almost consummated and then the whole thing may fall thru. The experienced broker has learned to take these disappointments as part of the business, and at once starts in again to work on some other prop osition.
A broker should find out that the one offering property is in reality the owner or his authorized rep resentative and also that the owner is able to sell. If he owns the property in a fiduciary capacity, he may not be able to sell it or he may have to obtain an order of the court in order to do so. Sometimes property is affected by restrictions that destroy its usefulness for certain purposes. If the broker knows about such things in advance he may avoid wasting time and energy working up a deal only to find that it cannot be carried out.
3. Employment of the broker.—It is a clearly es tablished principle of law that a broker must have been employed by the principal in order to be able to recover a commission for bringing about a trans action. This employment must be either expressed or implied. In order to found a legal claim for com mission on a sale, there must be not only a causal but also a contractual relation between the introduction of a purchaser and the ultimate transaction of sale. The usual thing is for the owner to come to the broker and place his property in the broker's hands for sale. At that time the broker should make sure
that the owner will pay him the usual commission if he procures a buyer. If the owner agrees to this, we have a definite and express employment. It would make it even a little better for the broker if the price and terms of sale of the property, together with an agreement to pay commission, were written out and signed by the owner. But the mere fact that the owner voluntarily lists the property with the broker, either by word of mouth or in writing, even tho payment of com mission is not mentioned, will be construed in most jurisdictions as an employment of the broker by the owner and will subject the owner to the payment of a commission if the broker sells the property for him.
4. Volunteers not paid.—If one approaches the owner inquiring the price of a piece of property, and the terms upon which the owner will sell, and after ward brings a customer to buy the property on the owner's terms, the owner has not become liable for a commission. The inquirer will be considered a mere volunteer and as such not entitled to compensation. Probably in most cases of this kind if the owner were asked in advance if lie would pay a commission if a sale were made he would have agreed to do so. Brok ers have frequently carried negotiations up to a suc cessful termination, only to wake up to the fact, after the deal was made, that the owner had never em ployed them. See 70 App. Div. 45 (N. Y.) ; 4 E. D. Smith 354 (N. Y.) .
5. Employment, implied or by ployment of the broker may be implied from past re lations of the parties or from special circumstances. If the broker has been accustomed to sell property for an owner and has received commissions for doing so, the owner could not refuse to pay him a commis sion for selling another parcel on the plea that he had not been employed. The past custom of the owner would justify the agent in expecting a commission for the service rendered unless the owner had deliberately said in advance that he would not pay one. Also, if an owner negotiated with one he knew to be a profes sional broker and whom he knew expected pay for his services lie could be held for a- commission if the sale were made. The employment of the broker would be implied. Any act of an owner recognizing a claim for commission, such as offering a less amount, raises the presumption of an implied agreement to pay. Employment may be by ratification but only where there is a plain intent to ratify. Thus, if one not pre viously employed brings the owner a purchaser, and the owner avails himself of the broker's services and continues negotiations thru him, the circumstances in dicating in some way that the broker expected to be paid for his services, an implied promise to pay the broker would be presumed. Questions of fact in these cases may be very difficult to determine. It has been well said, however, that an owner cannot be enticed into paying a commission against his will, so the intent to ratify must be very clearly shown.