Recovering a Real Estate Broker's Commission
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Who are Real Estate Brokers and How Do They Work?
Real estate brokers are agents who act as intermediaries or negotiators during the purchase and sale of a home. They are most often charged with bringing a ready, willing, and able buyer to the seller of a home. For their services, real estate brokers enter into different employment contracts with a seller.
Employment contracts for a real estate broker can be written, oral, expressed, or implied. The most common method of payment for a real estate broker is a commission. For example, if a real estate broker brings a ready, willing, and able buyer who purchases a home from a seller at $200,000, then the real estate broker gets a percentage of that purchase price as his or her commission. Commissions can range from 2 to 10 percent, but are generally around 5 or 6 percent. Therefore, a commission on a $200,000 home would generally be around $11,000.
What if a Real Estate Broker Can't Get Their Commission?
If the seller of the home refuses to pay an earned commission to a real estate agent, then the real estate agent can take the seller to court for what they are owed. To succeed in court, the real estate agent will have to prove:
- They possessed a proper real estate license,
- An employment contract between the real estate broker and seller existed,
- The terms of the employment contract were performed, and
- The seller is refusing to pay the agreed commission.
What Remedies can be Received?
If a real estate broker is successful in proving the above elements, a court can award him or her remedies, which can include:
Are There any Defenses?
If a seller is being sued for not paying a real estate broker their commission, there are generally two defenses:
- The real estate broker breached their fiduciary duty to the seller;
- The real estate broker did not have a proper real estate license at the time of the transaction; or
- The real estate broker breached the employment contract.
Do I Need an Attorney for my Recovery of a Real Estate Broker's Commission Issue?
If you think you have been denied your real estate broker's commission by a seller, or you are a seller who is being sued to recover a real estate broker's commission, it is strongly recommended that you contact a skilled real estate lawyer. An experienced attorney will be able to explain any potential claims or defenses available in your real estate commission action. In addition, an attorney can help collect evidence and advocate for you in court.
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Last Modified: 07-11-2017 02:59 PM PDT
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