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I represented the seller in a purchase and sale transaction. The other agent who represents the buyer is from my same brokerage. The buyer is an international buyer. He put up 2 separate deposits (15k total) and got approved from into the HOA. Come closing time, he wasn't able to come up with cash to close. Many excuses of a foreign wire that never came. My client the seller extended 25 extra days to close as a courtesy, buyer still didn't close. Her attorney made a claim for the deposit (15k) and instructed it to be split in two as per the listing agreement between the seller and i. Checks were eventually issued, one for seller, one for me. I didn't deposit the check right away, when my broker calls me and says if i had it, i said yes. The broker says there is a big mess on the file. The buyers agent is getting sued on another deal because he represented both buyer and seller, and buyer again , did not close, but only in that other case, there was no deposit. It was also said that the buyers agent put the money from his own funds and the buyer eventually paid him part of it.
So, the broker asked me to deposit the check, i did thinking he was looking out for me and wanted to get that disbursed to me right away. After i deposit the 7500 i called and said when i could expect disbursement, the broker said that he was disbursing to the buyer. I said, why? The buyer was in default and the check was already issued to me. The drove to the office and had a talk with the broker...told him i had spoken to an attorney, if i should have them get involved now or wait. Told him i was entitled to the money and showed him the last letter of formal demand that was issued before the money was release (showed my name and amount due to me). I told him to contact me before disbursing to anyone. He said he would have to look things over..but never assured me of getting the funds. I don't feel secure.
I feel that the broker is siding more with the buyers agent since he is in the same company and lost some of his own money putting the deposit out of foolishness.
My position is why should i loss the commission and pay for a buyer defaulting or the buyers agent putting up his own funds.
I spoke to two attorneys , both agree that i have entitlement and that the broker should not disburse to someone else. One offered to send a letter and phone call for 200 and said would guide me free if i needed to go to small claims court and suggested i contact FREC who the attorney says the buyers agent can lose his license and the broker can get in trouble.
Should i just wait and risk the broker giving funds to someone else? I was thinking of sending an email again restating out talk of how I'm entitle to the funds, how i feel he is siding with buyers agent, how i have my attorney on standby and will proceed, and perhaps mention FREC.
Should i wait or have the attorney send a letter?
Side note, i have the closing for the same property with new buyer on friday. Not sure if any of these things, email him , letter from attorney will effect my commissions. Also, i don't mind leaving firms, ive been there since january and the broker is not worth to loss 7500...very little support at the office.
Why would you, as an agent, be entitled to any part of the security deposit at all? I see it was part of the listing agreement, but I've never heard of that. Is it as payment of commission since you brought a willing and able buyer?
If the check was made out to you, why does the broker have to disperse it to you? Why didn't you just put it in your own account?
I don't see how whatever is happening to the buyer's agent in another transaction has anything to do with your transaction.
Isn't the broker your BIC too? You said you were in the same brokerage. Is it a different office? If so, have your BIC call that BIC.
Since you mentioned FREC, I'm guessing that you are in Florida. Our standard listing agreement (for those who don't know) allows for deposits to be split between the seller and the listing broker by any percentage, or the broker can elect to take nothing, in the case of a buyer default. In this case, it sounds like the listing agreement calls for a 50/50 split. It is important to note that the split goes to the broker, not the agent. The formal commission agreement between the broker and the broker's agent determines how much, if anything, goes to the agent. If there is no formal agreement, my understanding is that it is up to the broker's discretion and I imagine that there is no requirement for the broker to follow the normal commission split.
In my view, you should get your normal split of the 50% that goes to your broker. If your broker does anything else, I'd change brokers and I'd go to a broker who uses a written agreement.
Since you mentioned FREC, I'm guessing that you are in Florida. Our standard listing agreement (for those who don't know) allows for deposits to be split between the seller and the listing broker by any percentage, or the broker can elect to take nothing, in the case of a buyer default. In this case, it sounds like the listing agreement calls for a 50/50 split. It is important to note that the split goes to the broker, not the agent. The formal commission agreement between the broker and the broker's agent determines how much, if anything, goes to the agent. If there is no formal agreement, my understanding is that it is up to the broker's discretion and I imagine that there is no requirement for the broker to follow the normal commission split.
In my view, you should get your normal split of the 50% that goes to your broker. If your broker does anything else, I'd change brokers and I'd go to a broker who uses a written agreement.
I'll also say that the commission the Seller pays upon the sale should be reduced by the amount of the commission your brokerage received in the failed transaction. Personally, I think all of the deposit--or at least most--should have gone to the Seller. (If you want to split it, some could have gone back to the purchaser.)
Your story was a little difficult to follow so I'm going to try to recap.
International buyer contracted 2 properties, failed to close on either. On Prop 1 you were listing agent and the selling agent was also with your company. Property 2 the other agent was both listing and selling agent. After failing to close Prop 1 EM was split between seller and your company and you were paid a commission. Property 2 we don't know what happened to commission.
First of all, both are dual agency and would have to be disclosed to all parties. Correct? Assuming that's correct did you disclose dual agency and have all parties sign the disclosure? It's sounding like no, so you are as much at fault as everyone else. The buyer is now suing his buyer agent/your company for failing to disclose dual agency. Your company sounds like they are settling for half the EM and wants your $7500 for that. Is this correct?
Now, assuming that's all correct it's a hairy situation. You failed to disclose as much as much as anyone. The $7500 is the brokers money to distribute IMO but you may be entitled to your split. He's trying not to get sued. I'm not sure though and suggest you speak to an attorney and stop putting it out there on the internet.
No i don't represent both buyer and seller, only seller on one of the transactions. The other agent represents buyer in my transaction, and both buyer and seller in other transaction. He is getting sued.
The earnest money was retained by my clients attorney (seller) and split with me paid through my brokerage.
I have no interest if the buyers agent is getting sued in another transaction...because he never put escrow deposit. On the transaction he did with me, i pressed him and both deposits were put in. Its just that it was revealed that the realty put up his own money and then got paid part of it by buyer. The other agent is out the rest of the money. Problem is we have the same broker, so broker is siding with him telling me money goes back to buyer. Conflict of interest.
The attorney i spoke to today says that i should wait till i get paid on a closing i have on friday 15k and and 5k i submitted today so that doesn't get complicated and i can get paid and use that to sue if needed.
No i don't represent both buyer and seller, only seller on one of the transactions. The other agent represents buyer in my transaction, and both buyer and seller in other transaction. He is getting sued.
The earnest money was retained by my clients attorney (seller) and split with me paid through my brokerage.
I have no interest if the buyers agent is getting sued in another transaction...because he never put escrow deposit. On the transaction he did with me, i pressed him and both deposits were put in. Its just that it was revealed that the realty put up his own money and then got paid part of it by buyer. The other agent is out the rest of the money. Problem is we have the same broker, so broker is siding with him telling me money goes back to buyer. Conflict of interest.
The attorney i spoke to today says that i should wait till i get paid on a closing i have on friday 15k and and 5k i submitted today so that doesn't get complicated and i can get paid and use that to sue if needed.
No i don't represent both buyer and seller, only seller on one of the transactions. The other agent represents buyer in my transaction, and both buyer and seller in other transaction. He is getting sued.
The earnest money was retained by my clients attorney (seller) and split with me paid through my brokerage.
I have no interest if the buyers agent is getting sued in another transaction...because he never put escrow deposit. On the transaction he did with me, i pressed him and both deposits were put in. Its just that it was revealed that the realty put up his own money and then got paid part of it by buyer. The other agent is out the rest of the money. Problem is we have the same broker, so broker is siding with him telling me money goes back to buyer. Conflict of interest.
The attorney i spoke to today says that i should wait till i get paid on a closing i have on friday 15k and and 5k i submitted today so that doesn't get complicated and i can get paid and use that to sue if needed.
Contracts are with the Broker, so there may have been a Dual Agency situation even if you personally didn't represent both sides. An exception would be if some other agency arrangement had been stipulated, such as being listed as a Designated Agent. Was a particular type of agency even disclosed? (We have a required written disclosure form in Michigan.)
Whether or not it's even legal, co-mingling of personal funds (apparently done by the other agent) is never a good idea.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,957 posts, read 22,306,022 times
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In CA, it would be illegal for an agent to get paid directly. All funds would be paid to the broker who would then distribute them according to the independent contractor agreement.
Collect your next commission and immediately find another broker to work for.
In CA, it would be illegal for an agent to get paid directly. All funds would be paid to the broker who would then distribute them according to the independent contractor agreement.
Collect your next commission and immediately find another broker to work for.
Leave? Gee, I dunno.
This sounds like a really fun place to work.
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