When Money Is the Issue

Sep 10, 2019

Q. I had a buyer client who did not feel comfortable signing a buyer broker agreement with me but wanted me to represent him, so I agreed. I showed him and his fiancé a number of properties and finally the perfect house for them came on the market. The listing agent had taken an office exclusive and my buyers found the house on Zillow. When I called the listing agent to show, she said there was no compensation being offered another broker and that I would have to get paid by my buyer. My buyer refused to pay me and said I should get the commission from the listing agent. I called the listing agent to set an appointment but she again told me she was not paying another broker. I told her my buyers would put my compensation in the offer. The agent said the seller was paying a very reduced commission, which is why it was an office exclusive, not an MLS listing. In the meantime, the buyer went directly to the listing agent and made a deal. How do I collect my commission?

A. What commission? No one offer to pay you a commission and it would appear the buyers felt no obligation to buy through you. The lesson here is to never work for someone who does not appreciate the value of your services and has not offered to pay you!

Q. I have a listing and a buyer came to me to see the house. Now she wants to buy it. She is an attorney and is telling me that makes her a broker and she is entitled to half of the commission. Is this true?

A. Although attorneys have a license that allows them to collect a commission for being involved in a real estate transaction, the lawyer is not a licensed broker unless she paid the DOS to obtain a broker's license. Even if she had done that, however, she would have to have become a REALTOR® and have joined our MLS for the offer of compensation to apply to her. In addition, she would have had to disclose to you that she was a buyer agent representing herself in the transaction when she first began dealing with you in a substantive way. This attorney is just looking for a bargain price for the house and wants to take the earnings out of your pocket to get the bargain! 

Q. My former broker refuses to pay me the commissions I earned on two houses I sold that were listed by our office. Although they were in contract when I left the office, they only just closed. When I asked him when I would be paid, he said he did not owe me any money since the MLS offered no compensation to seller's agents and that, when I sold them, I was a seller's agent since I worked for the listing office. This does not seem right. Can he do that?

A. It is not right and the broker needs to take some refresher courses in how the real estate industry works. The offer of compensation found in the MLS is for cooperating agents, not agents who work for the listing broker! The listing broker pays his own agents according to the Independent Contractor's Agreement the parties signed when the agent joined the office and has nothing to do with offers on the MLS. If your broker refuses to pay you, your recourse is to sue him for your commission.

Q. I had a listing that another company sold. We are getting ready to close and the seller is refusing to pay my commission but is going to give a check for the selling broker's commission directly to the selling broker. What can I do?

A. You are contractually bound to arbitrate the commission claim at NAM (National Arbitration and Mediation) unless your seller refused to agree to the arbitration at the time you took the listing and removed or caused you to remove it from the agreement, in which case you must sue the seller in court. The selling broker has an agreement with you, not the seller and should not be getting payment directly from your client, but rather, should be getting compensated by you. An attorney may make a credible argument that the selling agent is interfering in your agency relationship with the seller and you might be able to sue the selling broker in tort for such interference!

Q. If a landlord and tenant agree to renew a lease, is the listing and/or renting broker entitled to another commission?

A. It depends on your agreement with the parties.

Q. A buyer client just bought a house directly from a seller. Does he owe me a commission when we had an agreement that gave my office an exclusive right to represent him in any purchase he made in Nassau County in a six-month period? The house is in Nassau and there are two months to go on the buyer broker agreement.

A. It seems to me you have a commission claim and a cause of action for breach of contract against the buyer.

Q. I tool a listing from a seller in July 2018. The listing does not expire until January 2019. The seller just sold to someone he said he found himself. Now he refuses to pay our office the commission. What can we do?

A. See the answer to the question above! Just as a buyer is contractually bound to a buyer's broker, a seller is contractually bound to the listing broker. 

Q. I am dealing with a seller who is a horror! She is making my life miserable! What can I do?

A. Stop dealing with her. No one has the right to make you sell her house, so tell her you won't. Release her for your own sanity!