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.
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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.
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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:
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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.
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