Assigned Out Of a Commission
Here is the possible scenario:
- A real estate agent has a signed Exclusive Buyer Agency Agreement with a buyer.
- A property is found and placed under contract with this buyer using this agent.
- The listing agent for this property has indicated via the Multiple List Service that a commission is being offered to buyer's agents, but not to sub-agents.
The buyer assigns the contract of sale to another agent.
- The contract of sale that is typically used in Maryland does not allow for assignments.
- Since this particular buyer is a wholesaler, the agent, buyer, and the seller agree to remove this clause from the contract.
The new buyer, the assignee, does not have an Exclusive Buyer Agency Agreement with the real estate agent and hence, has no obligation to pay a commission.
- Arguably, there is not even a sub-agency relationship between the new buyer and the real estate agent.
- Since the new buyer, the assignee, does not have a buyer agency agreement with the agent of the assignor, the listing broker has no obligation to pay a commission to the assignor's agent, who is no longer a buyer's agent, and the assignee, who has no buyer agency agreement, has no obligation to pay a commission.
The solution to this possible concern:
In the Exclusive Buyer Agency Agreement, there should be a clause that states that the agent is due a commission if during the term of the agreement the buyer enters into a written agreement to purchase a property.
- In this case, the commission is payable to the agent's brokerage whether or not the sale takes place, not including contingencies that might prevent the sale from closing.
- It is unlikely that the wholesaler would sign the agreement if there was a possibility that a commission would be due.