Firing Realtor While Under Contract

[BMUJS]

What about this:


The execution of a purchase agreement by both parties is evidence that a commission has been earned by a broker that is the “procuring cause” of such agreement. ... Although there is a distinction between when earned and when paid, once a commission is earned it does not become unearned if the deal falls through

[llworking]

What about this:


The execution of a purchase agreement by both parties is evidence that a commission has been earned by a broker that is the “procuring cause” of such agreement. ... Although there is a distinction between when earned and when paid, once a commission is earned it does not become unearned if the deal falls through

I do not know where you came up with that, since you didn't cite anything, however you clearly have never worked on commission.

[BMUJS]

https://www.danielsoconnellpc.com/wr...e-right-write/

Or this:

However, the law recognizes that, unless the agreement specifies otherwise, the commission is earned at the time the buyer enters into the purchase and sale agreement (or in some cases sooner when a willing and able buyer is presented) and thus, must be paid regardless of whether escrow closes.

https://www.google.com/amp/s/www.svl...not-close.html

Or this:

Under traditional property law a real estate broker earns her commission when she is the procuring cause of an offer to purchase from a ready, willing, and able purchaser that matches the seller’s listing price (or is otherwise acceptable to him). Dozens of cases so hold. See, e.g., Steve Schmidt & Co. v. Berry, 228 Cal. Rptr. 689 (Ct. App. 1986); Liggett Realtors, Inc. v. Gresham, 831 N.Y.S.2d 59 (N.Y. App. Div. 2007). This reflects the common law, and similar language is usually found in printed form listing agreements.
But this rule has implications that can be quite undesirable for sellers. If a commission is earned by the mere fact of procuring the right kind of offer, then it does not matter whether a deal a broker puts together ever actually is consummated. The commission earned does not thereby become unearned if the deal falls through, perhaps because of the buyer’s breach of contract. But an ordinary seller is naturally uncomfortable with the idea of owing a commission when no sales proceeds exist to supply the payment.

https://pdfs.semanticscholar.org/89e...47713add89.pdf

[adjusterjack]

Adjusterjack, what is the difference between the point in time of earning the commission and the point in time you get paid?

In my mind, if I perform a job (buyer enters into contract) and earn the pay, then I am owed that money. How is that different here (realtor doesn’t get paid unless home sells)

I already explained it to you and so have others. You just don't want to accept it. Or maybe you are just a troll, bringing up the same objection over and over again just to keep responders involved in the argument. Sigh. Well, I'll try it one more time.

Yes, you are correct that when you perform a job you earn the pay. What you are missing is that EVERY job has contingencies. Contingencies are conditions that must be met for the job to be completed and paid for. When you perform work for wages or salary you get paid (by law) whether you do the job properly or not. The consequence of not doing the job properly is that you get fired but you still get paid.

When you perform work for a fee (as an independent contractor) and you do not comply with the conditions of the contract you either don't get paid at all or you get paid considerably less than the contract price. That's called an executory contract.

A real estate purchase contract is an executory contract. You sign a contract to purchase the property subject to the conditions stated in the contract. The contract is not executed (done deal) until all those conditions are met and the purchase price is exchanged for the deed. If the conditions aren't met, the contract is not executed (the sale is not closed) and nobody gets paid.

What about this:
The execution of a purchase agreement by both parties is evidence that a commission has been earned by a broker that is the “procuring cause” of such agreement. ... Although there is a distinction between when earned and when paid, once a commission is earned it does not become unearned if the deal falls through

One more time. When the parties sign the contract is not the execution of the contract. The execution of the contract doesn't occur until close of escrow when the purchase price is exchanged for the deed. If the deal falls through, nobody gets paid.

However, the law recognizes that, unless the agreement specifies otherwise, the commission is earned at the time the buyer enters into the purchase and sale agreement (or in some cases sooner when a willing and able buyer is presented) and thus, must be paid regardless of whether escrow closes.

That's amusing. Your citation doesn't support you position, it rebuts it. Note the emphasized part.

Do you get it now?

[BMUJS]

So my questions pivoted a few posts back to whether a commission was still owed even if the home fails to sell.
I am not trolling, I am trying to figure out if I could be on the hook to pay a commission to my buyers agent if our contingent contract falls through.

In my buyers rep contract, it says the commission is earned when I ENTER into a contract, which I have.

It says the commission is payable upon the closing and funding of the sale.

[adjusterjack]

So my questions pivoted a few posts back to whether a commission was still owed even if the home fails to sell.
I am not trolling, I am trying to figure out if I could be on the hook to pay a commission to my buyers agent if our contingent contract falls through.

Yeah, we did manage to sail away from that question, didn't we, though I think it has already been answered.

No, you are not on the hook to pay the commission to your buyer agent if the contingent contract falls through because the contingencies were not met through no fault of your own:

Contingency - sell your home. It doesn't sell though you have made reasonable efforts to sell it. No problem. No commission payable.
Financing - you could not qualify for a mortgage though you made reasonable efforts to obtain financing. No problem. No commission payable.
Inspection - you found things that needed repair. The seller refused. The contract allowed you to back out. No problem. No commission payable.
Appraisal - the house appraised at less than the purchase price and the seller refused to adjust the price. The contract allowed you to back out. No problem. No commission payable.

However, and I think I have already made this clear, you would be on the hook for the buyer agent commission if you made a deal with the seller to cancel the contract and then wrote a new one without your buyer agent.

And to be clear, hoping to put an end to this thread, anything sneaky that you do to try to eliminate your buyer agent from the commission is fraud and breach of contract and you'll get yourself sued and it will cost you a lot more than just the commission.

[BMUJS]

Last question:

If my contingent contract falls through because we couldn’t sell our current house
AND
The sellers rep agreement with the current realtor expires (protection period is nullified if I enter into a new agreement with a different broker)
AND
The buyers rep agreement with the current realtor expires (also, protection period is nullified if I enter into a new agreement with a different broker)
AND
The home we originally wanted to buy is still for sale
THEN
Can I try to sell my home and by the SAME home with a new broker without being worried about a valid claim against me?

[adjusterjack]

Last question:

If my contingent contract falls through because we couldn’t sell our current house
AND
The sellers rep agreement with the current realtor expires (protection period is nullified if I enter into a new agreement with a different broker)
AND
The buyers rep agreement with the current realtor expires (also, protection period is nullified if I enter into a new agreement with a different broker)
AND
The home we originally wanted to buy is still for sale
THEN
Can I try to sell my home and by the SAME home with a new broker without being worried about a valid claim against me?

I downloaded both contracts to make sure of the exact wording of the Protection Period. Based on what I read, I would have to answer yes to that question.

http://billevans.com/pdf/web11.pdf

http://content.har.com/FormManager/pdf/9.pdf

[BMUJS]

What about the first broker saying they were the procuring cause and are entitled to the commission?

https://www.abor.com/wp-content/uplo...l05ARPrint.pdf

[adjusterjack]

I'm not going to comment on some pundit's internet article.

If you want to stiff your broker out of his commission, go for it, and see how it goes.

This thread has graduated to the kicking a dead horse level.