I had a crazy situation yesterday! It is a long long story. Basically my closing fell apart at the table. I was the listing agent for this property. I also showed it to the buyer. I explained to her 100% that I was working as the sellers agent and she clearly understood. This was a cash deal so the buyer put down 5K. The closing was scheduled for 2pm yesterday. The buyer called me on the way there and told me she changed her mind! She came to the closing and told her attorney that she wanted out. Her attorney explained that she would lose her 5K plus open herself up to being sued if the seller received less for the property. She said "Fine" The seller told her that he would not sue her and signed something saying so. The attorneys were paid and the seller is now anxious to get that 5K. When I got back to my office my broker wanted to know where my commission was... I explained everything and he told me that I did my job, I had a solid contract and I am still due a commission. I told him I was under the impression that if the deal did not close then I was out of luck. He says "that is not so".. He said typically (but there is nothing typical about this) that the seller is still liable to pay my commission and that he would be able to get it from that buyer if he didn't waive his right to sue... Now, the seller is a friend of mine and my broker told me he would not pursue it if I didn't want him to... but he is hesitant to hand over that %K. At this point I am willing to take this as al lesson learned but I really want to know legally at what point is a realtor due a commission? Am I legally entitled? I only became an agent this past Spring and I just don't know the answer though this questions..

Thanks

Oops.. I am in NY and I meant that my broker is hesitant to give up the 5K...

Normally the realtor earns the commission at closing. However you should carefully read your contract. Most likely it says that if there is a default then the realtor is still entitled to the commission.

I'm in VA and as you describe it I believe the seller owes you a commission. You did your part and the deal didn't fall apart because of your actions.

With it being friends I can understand your reluctance, but I think they are being pretty crummy friends not to compensate you for the work you have done.

Hello R:

The answer will be found in your listing agreement...

But, if I was the seller, and you brought a flake to the closing, I don't want to pay you a commission. If you SOLD my house, I'd be happy to pay - but you didn't.

excon

As I read it she was the seller's agent not the buyer's agent.

Hello Em:

They're ALL sellers agents as she explained. As the seller's agent, the seller agrees to pay a commission if the seller's agent finds a buyer - and the buyer CLOSES.

Or, at least that's what the OP hopes her listing agreement says.

excon

Thanks for the feedback...

Well, it looks like the listing agreement says that commission is payable when a "transfer, sale of exchange of the property is made, effected or agreed upon with anyone the owner agrees to pay the broker a commission of__%. Further down it says that this commission will be due and payable ifa purchase for the property is procured by a licensed agent or any participant in the MLS at a sales price and terms acceptable to the owner"...

So, it looks like "legally: my firm is entitled to a commission. My broker spoke to an attorney and the attorney validated that.

Now, my broker intends to keep the 5K...

I completely understand not paying the realtor until it closes. I was under the impression that was the case. I, by no means want to pursue it especially because of my friendship... but I have to admit that I am hurt that he did not take my time into consideration. He should not have been so quick to sign that release... but I definitely learned a huge lesson and he did too...

I have to put it into the hands of my broker and be prepared for this friendship to end:-(

That is why it is just not good practice to do business with friends :-(

I think your broker has a duty to return the full amount back.
The buyer since they refused to buy could be liable to pay the commission if they refused the deal after being in default.

The seller in fact has to remain harmless in the deal and recoup their actial losses.

The agreement terms is all you have, so unless it is specific you have no case.

If it says the seller is liable for a bad deal then they are, but you have to go back to the contract