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Friday, June 15, 2012

No one signed the contract, can I still earn a commission?

Last evening at our real estate continuing education course, Conflicts of Interest, we discuss the anxiety that  real estate agents face because an attorney is handed the keys to their commission and must act for them to earn a commission. 

The question then becomes is this a true fact in the first place. Meaning, can a broker earn a commission regardless of what happens when the file shifts to an attorney?

The answer is Yes, but the agent must have evidence that they procured a purchaser on the terms set forth by the seller. Also, this rule is only applicable if the listing agreement does not provide that commission is only due upon contract or closing. Yet, don't fret because most listing agreements utilized in NY permit a commission to be earned when an agent procures a purchaser on the seller's terms. 

As the Court of Appeals has stated:

“The duty of the broker consisted in bringing the minds of the vendor and vendee to an agreement. He could do no more. He had no power to execute a contract, to pay the money for the one side, to convey the land on the part of the other, or to compel performance of either of these duties.”