Commission Dispute

Question: I submitted an offer on a short sale which took 2 months for approval and were schedule to close, however, a day before closing the listing agent decides to lower my commission because according to her our office does not pay what she pays, she did not tell me this when the offer was made or accepted and the commission is advertised with the higher commission split, the agent's broker and her have said that they will cancel/postpone the closing and will only close it if I take less of a commission. The buyer, seller and seller's lender are ready to close. I will not take less because I find it unethical and I believe they have no right to cancel a closing. What are your thoughts?

Thank you

Tags: Commission, dispute

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Replies to This Discussion

Permalink Reply by Smitty on February 3, 2012 at 1:39pm

I'm not sure I understand why your commission was lowered, but does your buyer want to close tomorrow? If so you have a duty to put your buyer's needs above your own. Many times short sale commission is lowered by the lender. Did you look a the HUD1? What is the selling agent getting? If she is making about 50% and you're making 50% of the total commission, it's likely the LENDER capped it.

Permalink Reply by Tavo on February 3, 2012 at 1:59pm

Thank you Smitty for your reply, but No the commission was not lowered by the seller's lender is all the agent and listing broker that decided to lower try and lower it, it was to be split 50/50 but they want to lower it becuase according to them we don't pay 50/50 and that is the only reason. They advertised in the MLS as 50/50 split. Yes my client do come fist and the closing will happen. There has to be something I can do to hold them to what they adviertise.

Permalink Reply by Bryant Tutas on February 3, 2012 at 2:03pm

Tavo. The commission should be paid out according to what was offered in the MLS. This can be disputed at your local board. What you can't do is hold the closing up over a commission dispute. You need to get your broker involved asap.

The listing broker and the agent have ZERO authority to cancel the closing. The closing is between the seller and the buyer.

Permalink Reply by Bryant Tutas on February 3, 2012 at 2:07pm

I want to add that how your office chooses to split commissions has no baring on anything. If what you have stated is true then this listing broker and agent are probably in violation of anti trust laws on top of breaking MLS rules and regs and violating the Realtor code of ethics.

Permalink Reply by Tavo on February 3, 2012 at 2:12pm

Thank you Bryant for you reply!

Permalink Reply by Smitty on February 3, 2012 at 2:57pm

Bryant is the voice of reason here. He is right on. I think once you threaten that you are going to your local board, you'll see your commission payout reflected the correct way.

Permalink Reply by Tavo on February 3, 2012 at 6:01pm

Just wanted to let you guys know, after your reply an email was sent and looks like we will be getting the right split :-). Thank you!

Permalink Reply by Tara Semtner on February 5, 2012 at 9:29am

Great! Once you close I would report the agent and broker to your local board for this.

Permalink Reply by Christopher Pendleton on February 5, 2012 at 10:54am

Nice.

Permalink Reply by Sylvia Montoya Knight on February 6, 2012 at 9:05am

Awesome.

Permalink Reply by Stella Lane on February 6, 2012 at 12:39am

At few years ago, we had company A who always paid company B less than what they paid all other companies for commission split. It went to court and it was approved as it was company A "against" company B so there was no collusion as no other companies were involved. It was allowed as the company A notified in writing to the company B that the commission was reduced for that company B. The MLS still stated the amount paid to all other real estate companies and company B who had been notified knew that the commission was less than that stated. In reading the original post, it appears that the seller's company did not pay the same commission to the listing company which was the point of contention. Nothing is stated about whether or not this happened in Tavo's case but it is a possibility.

Permalink Reply by Natalie Arndt on February 3, 2012 at 8:14pm

If they have advertised your commission in the MLS they have legally agreed to abide by that. Call the attorney for you association and double check it. I do not know what kind of regulations you have with your local MLS.

They are breaching the contract at this point.

Do not give up your commission but get the facts from your attorney.

Natalie Arndt BS, MA, CDPE, CDRS