Association of Realtors Conflict of Interest With Deposit Money
Some Association of Realtors listing contracts allow the Broker to keep one half of the Seller's deposit money if the Buyer defaults.
This permission is snuck into some listing contracts and most Sellers do not know what they have committed to until it is too late.
"In the event a buyer defaults on the buyer's obligations under a purchase and sales agreement and forfeits deposit money to the SELLER(S) as liquidated damages, whether by agreement of the buyer or otherwise, the BROKER and SELLER(S) shall share equally in the liquidated damages for that transaction providing the BROKER'S share may not exceed what the commission obligation would have been had the transaction closed.
BROKER and SELLER(S) agree any such monies received are for liquidated damages and not commission.
" There are several enormous conflicts of interests with this type of treachery.
It is common for the Seller's attorney to add a clause into the purchase and sale agreement that the commission will only be paid to the Broker "if as and when the deed is recorded and all monies have been paid" to the Seller.
The Realtor's job is not considered complete until the Seller has actually been paid in full and the Seller no longer owns any interest in their former property.
The Realtor will not be paid until these events occur and the transaction has been entirely completed.
How does the Seller's Attorney include such a clause for the benefit and protection of the Seller if the Seller has signed this form at listing time, which is usually months before a Buyer has been found and the Seller has hired an attorney? Are Realtors avoiding the Seller's Attorneys by adopting this language very early on in their relationship with the Seller? The Realtor's Association is entirely deceitful in the wording of this clause.
Notice the Realtor has the Seller agree and sign that the Realtor's half of the deposit is not to be considered commission but rather as "liquidated damages.
" This is done to allow the Realtor to double dip.
The Realtor can now receive the commission as well as one half of the deposit money, if they are lucky enough to find a second buyer.
How does this Realtors Association justify their behavior in all of this? If the Realtor sells the property they might receive a 5% or 6% commission but if there is a problem with the transaction they all of a sudden become the Sellers partner and get one half of the Seller's deposit money.
This will be many thousand of dollars.
What liquidated damages has the Realtor suffered as compared to the Seller? Instead it could be argued that the Realtor has not performed their job at all and does not deserve a dime.
If the transaction has hit the point that that the Seller is entitled to keep the Buyer's deposit, whether in court or by right, it is obvious the realtor involved did not secure a ready, willing and able Buyer for the Seller and should not be paid until they have done so and the transaction is 100% complete.
This permission is snuck into some listing contracts and most Sellers do not know what they have committed to until it is too late.
"In the event a buyer defaults on the buyer's obligations under a purchase and sales agreement and forfeits deposit money to the SELLER(S) as liquidated damages, whether by agreement of the buyer or otherwise, the BROKER and SELLER(S) shall share equally in the liquidated damages for that transaction providing the BROKER'S share may not exceed what the commission obligation would have been had the transaction closed.
BROKER and SELLER(S) agree any such monies received are for liquidated damages and not commission.
" There are several enormous conflicts of interests with this type of treachery.
It is common for the Seller's attorney to add a clause into the purchase and sale agreement that the commission will only be paid to the Broker "if as and when the deed is recorded and all monies have been paid" to the Seller.
The Realtor's job is not considered complete until the Seller has actually been paid in full and the Seller no longer owns any interest in their former property.
The Realtor will not be paid until these events occur and the transaction has been entirely completed.
How does the Seller's Attorney include such a clause for the benefit and protection of the Seller if the Seller has signed this form at listing time, which is usually months before a Buyer has been found and the Seller has hired an attorney? Are Realtors avoiding the Seller's Attorneys by adopting this language very early on in their relationship with the Seller? The Realtor's Association is entirely deceitful in the wording of this clause.
Notice the Realtor has the Seller agree and sign that the Realtor's half of the deposit is not to be considered commission but rather as "liquidated damages.
" This is done to allow the Realtor to double dip.
The Realtor can now receive the commission as well as one half of the deposit money, if they are lucky enough to find a second buyer.
How does this Realtors Association justify their behavior in all of this? If the Realtor sells the property they might receive a 5% or 6% commission but if there is a problem with the transaction they all of a sudden become the Sellers partner and get one half of the Seller's deposit money.
This will be many thousand of dollars.
What liquidated damages has the Realtor suffered as compared to the Seller? Instead it could be argued that the Realtor has not performed their job at all and does not deserve a dime.
If the transaction has hit the point that that the Seller is entitled to keep the Buyer's deposit, whether in court or by right, it is obvious the realtor involved did not secure a ready, willing and able Buyer for the Seller and should not be paid until they have done so and the transaction is 100% complete.
