Six Most Common Commission Dispute Misconceptions
Saturday, June 25, 2011 at 5:09PM 06.15.11
By: Stephen J. Nash
Nash Law Firm PLLC
nash@nash-law.com
In this article I am not going to go through each factor in detail (that is why you need to read the Procuring Cause Guidelines which does go into more detail), however, the following are some common misconceptions when dealing with commission disputes:
1. I asked the buyers if they were represented by an agent and they said no.
Wrong. The existence or lack of existence of a buyers’ contract does not determine procuring cause.
2. The agent didn't accompany the buyers on there first viewing of the property so the buyers' agent is not entitled to a commission.
Wrong. That is one factor that the panel will look at but it certainly is not conclusive that the buyers’ agent will lose.
3. The agent "stole" the client from me so he/she can't get the commission.
Wrong. If you do not have the buyer under contract (as a dual agent or as a buyers’ agent), the buyer has the absolute right to chose to have someone represent them and if that agent can meet the procuring cause test, they will receive the commission. Furthermore, panel members are expressly told not to take away an award solely because they do not like the agent/brokers way of doing business or even that unethical conduct may have occurred.
4. The agent for the buyer didn’t do his/her job very well so he/she can’t get the commission.
Wrong. Maybe he or she didn’t do a great job for the buyer but the issue is whether he/she meets the procuring cause standard and even though he/she did not do a good job, he/she still can meet that standard.
5. I have a signed Buyers Broker agreement therefore I will get the commission.
Wrong. The existence of a Buyers Broker Agreement does not mean that you meet the procuring cause test.
6. I am the Listing Agent I don’t have to prove anything, the burden is on the buyers’ agent to prove procuring cause.
Wrong. Each party has an equal burden of proof – what did you do in the transaction and what is the value for those actions.