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Did the buyer fib to the agent or fail to proceed in good faith once under contract?
What does the buyer's agency agreement have to say about the process, and when a payment is earned by the agent?
It is unlikely that a commission could be successfully claimed in most situations of failed loan application, but it is not difficult to imagine a situation where claiming a commission could be supported with a straight face.
It sounds like the Frenchman didn't lose his deposit, he bought the house and then just put it back on the market. The first agent gets her commission and the second agent will get her commission when the place sells again.
If the agent finds a buyer who is ready, willing, and able the agent gets paid. If the buyer is pre-qualified for the loan, then does not actually qualify at closing, the buyer is not "able" and the agent does not make the commission. Now, if the seller lists the house for $200k, and they agent finds someone who will pay 200k cash, but the seller decides they don't wish to sell after all, the agent still will make commission as the agent found someone who was ready willing and able. If the buyer makes an offer, and it is accepted, and changes his mind for a reason not listed in contingencies, the agent does not get the commission, but the agent and seller split the earnest money 50/50.
Finally, lets say the seller lists the home with ABC Realty, and they get an offer from Mr. Smith, but Mrs. Johnson makes a better offer and they go with Mrs. Johnson's offer. Mrs. Johnson backs out after an inspection shows a leaky roof that the sellers refuse to fix. The contract with ABC Realty expires, and the seller decides to hire XYZ Realty instead. Mr. Smith sees the house is back on the market and makes an offer to XYZ realty. Because ABC Realty originally procured the buyer and they had a clause in the listing agreement stating anyone they find who buys the house within 6 months of the contract expiring will earn them commission, the seller *may* end up paying commission to ABC AND XYZ Realty. It really just depends how the contract is written, so don't skim.
So, to make a long answer short.. any number of things could have happened to put the house back on the market, they may possibly owe the agent commission depending on the circumstances, and most importantly, it agrees on the terms of the listing agreement. An agent earns their commission when there is a signed offer from ready, willing, and able buyer and an agreeable seller. They just don't get the check until closing.
We have a house here in town that is really cool, but has been *pending inspection* at least 4 times over, then gets re-listed, so I imagine there is some really bad issue the inspections are uncovering.
*I am not a licensed realtor, this is not legal advice as I am not a lawyer, and my information pertains to Washington Real Estate textbooks as I understand it.
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