Withhold agent's commission?? - Posted by Ron

Posted by Irwin on January 17, 1999 at 07:55:27:

You might not have a listing agreement with the Realtor, but the purchase agreement itself usually contains a separate agreement to pay the real estate commission. This may or may not satisfy the requirements of your state’s real estate board, but it still might create a legally binding agreement.

I think the simplest way to handle the problem is to call the Realtor and tell him you want the money that he owes you deducted from his commission. He might agree and there’s no problem. If he doesn’t agree, tell him that you will instruct the title company’s closing agent to pay only X dollars to him. You’re the title company’s customer, not the Realtor, and they should follow your instructions. (With or without an explanation of why.)I’m betting he’ll agree to make the call himself to avoid any embarassment. Also, it’s a painless way for him to satisfy the debt to you.

Withhold agent’s commission?? - Posted by Ron

Posted by Ron on January 16, 1999 at 19:07:56:

I am about to close on the sale of a property I rehabbed.

The listing (and selling) broker owes me money due to an unrelated RE transaction.

Can I instruct the title company to withhold it from his selling commission? We have no written listing agreement (which I’ve recently learned is illegal on the part of the broker), but I have paid him 7% on several previous sales. This will be the last property I’m selling through this broker and would like to force him to repay me without going to small claims court.

Any advice? (Other than not to lend to realtors – to late to prevent that dumb move.)



Re: Withhold agent’s commission?? - Posted by JPiper

Posted by JPiper on January 17, 1999 at 13:21:44:

Just so that you know, it?s not ?illegal? for the broker not to have a written listing agreement with you.

However, the broker must have a written agreement with someone. In this case, perhaps he has one with the buyer. If he does have a written agreement with the buyer, then chances are extremely high that your state would require the broker to disclose his agency status to you, both orally and in writing. This could have been done in the real estate contract perhaps?.you don?t say. However if the broker has no written agreement with you, and has not disclosed his agency status in writing, then the broker has a definite problem.

The broker could have a written agreement with the buyer. Sometimes these agreements state that the buyer will only owe a commission if the broker fails to collect it from the seller. Again, agency status should have been disclosed, and a written agreement for the fee should have been obtained?.certainly in my state and I suspect in yours as well.

I think Irwin makes a good suggestion below. Why not call the broker?? Work things out amicably. However if this does not appear possible, and in the absence of a written agreement for the commission and a written agency disclosure, I would not pay the commission. I would remind the broker of his debt, and remind him of his legal responsibilities regarding his license status.

Look at your contract again and make certain there is nothing in the contract regarding all this. By the way, do you have some type of written proof that the broker owes you money??


Re: Withhold agent’s commission?? - Posted by PBoone

Posted by PBoone on January 17, 1999 at 10:02:27:

No Listing agreement = No Commission. The broker probably could argue in small claims. OR You could discuss with the broker a payment compensation package of a lower percentage on the next few houses to make up the money owed. If he/she is selling houses for you it may be a relationship to keep in tact so long as it keeps healthy boundries.