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Be A Pro On The Contract

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By ILYCE GLINK Tribune Media Services

The Tampa Tribune

Published: March 15, 2009

I'm a home seller, and the buyer of my condo has released a deposit because they have decided to back out of the deal.

My real estate agent has filed a Termination of Sales Contract Deposit Release and Directive with the broker that would give half the deposit to him and half to me. My lawyer says that I can negotiate an amount with the agent to reimburse him for his time, but I am not obligated to pay him a penny.

I am mad that my agent would fill out the form in this manner when it goes against what is honest and ethical. I would like to stop working with him and to keep all of the money.

Is this wrong of me?

I talked to a real estate attorney, who gave me a little background on real estate commission agreements.

Some agreements have the broker earning the commission once he or she has found a ready, willing and able buyer. If that buyer decides to walk from the deal, the commission agreement would effectively give the broker the commission earned. Some commission agreements may have other terms in them, including one that says the broker will be paid out of the closing proceeds (in other words, at the closing only). You must look at the agreement you signed to determine whether the broker is entitled to a payment.

If you review your agreement and find out that the broker isn't entitled to a payment, then the broker is out of luck. However, if the agreement gives the broker the right to the full commission, depending on the amount of the deposit, yours may be taking less than he is entitled to.

However, I agree that it's obnoxious for your broker to insist on getting half of the cash if you don't owe him a penny. He is taking advantage of your supposed ignorance as a seller. But you're informed, not ignorant.

Finally, in these cases, if you have a good working relationship with your real estate agent, and you determine he isn't entitled to any money under the commission agreement, you may decide that he deserves something for his time.

I assume that you will continue to try to sell the condo. If the agent is going to continue to represent the condo (it sounds like you've now had second thoughts about that) and isn't due any money under the terms of the contract, you would have to make sure he understands the terms under which you're willing to move forward.

Agents do a lot of work, particularly in this market, and I don't think it's wrong to give him something for his time - particularly if you're not going to use him again. While you may choose to use another agent to list the property, this agent could bring a future buyer to the door. So you don't want to burn a bridge if you can help it.

Those are the two sides of the coin. You should have a conversation with your agent to discuss his behavior and what your attorney said about not owing him a penny; but you had better know the terms of your commission agreement before talking to him. Then be quiet and listen to him explain why he presented it to you this way. What he says will be very telling about who he is as a person and what kind of relationship - if any - is possible in the future.

Most agents have never been through a downturn like the one we're in. Some still believe home prices should rise forever. The truth is, right now, a lot of real estate agents are working pretty darned hard and not earning a penny.

If you don't like how the agent responds to the conversation, your next move should be to call the managing broker of the firm. Set up an in-person meeting to discuss what you think is wrong. Then ask for your money, and make a decision about what you want to do going forward. If this is the best firm to represent your condo, you may want to ask the managing broker for another referral.

I'm planning on buying a home this summer. I bought a home in July 2006 and had to sell because of a job transfer in July 2008. I've been renting for the past year.

Would I be eligible for the $8,000 tax credit if I buy a house after July of this year? I thought I heard that to qualify, you had to be a first time home buyer.

Thanks for your time.

No, you would not be eligible. The tax credit is only for first-time home buyers or those who have not owned a property in three years. If you are married, you and your spouse both must not have owned a home during the three years preceding the purchase of the new home.

Write to Ilyce Glink at Real Estate Matters Syndicate, P.O. Box 366, Glencoe IL 60022; or e-mail thinkglink@aol.com.

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