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TJ, Esq.
TJ, Esq., Attorney
Category: Real Estate Law
Satisfied Customers: 11654
Experience:  JD, MBA
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I had a contract for sale of my home for a 6% commission 3%/3%

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I had a contract for sale of my home for a 6% commission 3%/3% to be split equioal between seller and buyer agents. My agent then went and listed the property on the MLS for a 2 1/2 % commission without informing me. I caught the discrepancy after the agent sent demands into the title company where he wanted payout of 3 1/2 % and indicated the 2 1/2 % that was placed on the MLS was in error.

I only recieved one offer on the property $60,000 less than my listing price and I am concerned that the improper listing of commission to buyers agents cost me exposure.

I was past the point of no return , two days prior to signing when this was discovered , agent claimed he deserved the extra commission base on all his hard work, home sold in a week !

He also held a open house prior to the property being on the MLS, apparently an in house showing ?

I signed with notice to the Title Company it was under protest, he got the 3.5 % commission as I would have been sued by the the buyer.

1.) What is this practice called in the RE world and what laws have been broken ?
2.) What recourse do I have with Breach of Contract
3. ) What recourse do I have for Fiduciary duty
Hello and thank you for allowing me the opportunity to assist you.

Q: 1.) What is this practice called in the RE world and what laws have been broken ?
A: The agent does have the right to set his own commission, but in this case you wrote that he agreed via contract to accept 3%. Accordingly, he is in breach of the contract. I will discuss that below.

Q: 2.) What recourse do I have with Breach of Contract
A: You could theoretically sue the agent for return of the 0.5% commission that he had no right to receive. Since you are (presumably) the party that paid the commission, that is owed to you. Second, you could sue for damages caused by the breach, such as lost profits from the sale of the property. This, however, will be much more difficult to win. First, you have the problem of proving what you would have sold the property for if the commission had been properly advertised. It's pure speculation. Second, the house was only for sale less than a week. So the agent would argue that you could have turned down the offer if you thought it was too low, and given it more time. He'll argue that the reason you may have gotten less than listed is because of your haste in selling. To clarify, I'm not saying that I agree with that assessment, but that will be his argument, and a judge may agree. I think that you'd be fighting an uphill battle if you were to sue for lost profit on the sale.

Q: 3. ) What recourse do I have for Fiduciary duty
A: See above. He clearly breached the duty by taking action without your consent. The lawsuit would mirror what I wrote above. You can only sue for damages sustained, and proving damages in this case will be difficult because of speculation and the speed at which the house was sold. You can, however, file a complaint with the real estate board: CLICK HERE. It's possible that he'll be disciplined.

Does that answer your question? Please let me know if you need clarification, as I am happy to continue helping you until you are satisfied. Also, your positive feedback is much appreciated. Thank you for using our service!

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Customer: replied 3 years ago.

My understanding is that breach of fiduciary duty the minimum peanalty is a forefit of the commission , all of it, not just the 1/2 point ?


Other facts , when this was brought to agents attention he offered me a split 1/4 point back that would have brought his commission to 3.25 % , these instructions went to escrow as he said his management approved that reduction ... OK you ask all is good ?


Sale was a part of a divorce, x to be was in all agreement with the sale price , so that would have been a huge mess for me to counter and I wanted out.



Here is the kicker my friend, we had a 4 way instruction to escrow stipulating the full 6% commission, both counsels signed it and both parties, it was silent on the commission split.


When I had the commission reduction agreed upon with agent my counsel prepared for opposing counsel an amended commission for 5.75 %total 3.25 seller agent / 2,5% buyer agent/,25 back to seller , opposing counsel refused to sign it indicating " I was out of line" taking money well deserved from agent and that my x did not want the money back.


He indicated the agent deserved the 3.5% commission.


Here is the kick in the butt , the agents x wife is married to opposing counsel, in fact they are baseball field buddies with the grand kids in common .


Now hows that for a conflict of interest, in fact the agent also made me an offer to write me a check after sale to settle up the difference , when I asked for the whole monty, including what would be x-wifes share he said that would be unehtical


I suspect that opposing counsel was offered the same deal for his client ( and in fact had not refused the monies) and that is why he would agree to not sign the amended commission which would have bennifited his client


Seems that opposing counsel overstepped his legal authority on this one ?


You see , I think I need overall " big picture" legal guidance on this matter, like spell it all out.... as I am sure the Judge would be interested in some of the " details "


I think the Brokerage has some explaining to do as well ?


Agree ?



Hi again.

Q: My understanding is that breach of fiduciary duty the minimum peanalty is a forefit of the commission , all of it, not just the 1/2 point ?
A: I have seen that where the breach involves dual representation or fraud. I have not seen any legal authority indicating that is an automatic result in every instance of breach of fiduciary duty. I believe you'd need to prove damages. But I'll put it this way: If you're going to sue, then you of course ask for return of all commission. You may not get it, but it certainly is worth the try.

I don't see the conflict of interest, however, in the fact that the agent's ex is married to counsel, or that they're friends. That would not likely be considered a conflict. If being friends constituted a conflict, then half of all transactions (legal or otherwise) would be suspect. And the fact that the spouse is the other's ex ... well, that's not an issue. They're an ex for a reason.

I will say that the deal sounds fishy. But I'd likely just accept the refund that was offered. Taking this to court will probably cost you more than the case is worth.

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