Buyer and Seller going to cut Real Estate Broker out of deal after property is under contract
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Buyer and Seller going to cut Real Estate Broker out of deal after property is under contract
I the Broker have, Buyers Agency Agreement signed by buyer, Exclusive Right to Sell Listing Agreement Signed by the seller. We are under contract signed by all parties. Inspection,appraisal done and closing date is set. Buyer is ready to go to underwriter then close in a few weeks. Buyer goes to seller and wants to buy direct from seller and take off the commission and buyer has ask me for a terminatin of contract to be drawn up so they both can sign it. What are my options? I want to get paid. I have gone by ever letter of the law, but what can protect my commission if they terminate?
Asked on June 1, 2009 under Real Estate Law, North Carolina
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 15 years ago | Contributor
The reason they want to draw up a termination of contract is that they have no legal grounds for not paying unless you agree to not be paid. Don't draw up or sign anything terminating representation--they need to pay you IF they go through with the transaction. (See below) Even if they unilaterally terminate, if the seller sells to buyer during the period covered by your agency agreement, they will owe you.
Of course, they could refuse to sell, take the house off the market, then put it back on and sell some months later, after your agency has expired. Technically, that'd be legally, though if you are aware of the sale and show that it was between two parties that you introduced and did the legwork for, there's a good chance you'd be able to show that the actual "contract" or agreement to sell occured during your representation and get paid anyway.
However, if it comes to that, you're going to likely have some legal fees, alot of headache, you are not guaranteed to win, and you have to monitor the house on an ongoing basis to see if it does sell between these two parties.
Perhaps you might offer a reduction in commission to sweeten the deal--explain that since you've done work, you need to be paid, but that you understand if the price needs to be a little lower to make the deal happen. If you can give up some commission but get the deal closed and get paid, well half a loaf is often better than none.
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