We had a buyer back out, and we get the earnest money but our broker says they gets half. Is that normal? I was looking through our contract and found nothing stating this. I’m not against it necessarily but I might pay the half and find a new realtor if this isn’t the norm.
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It seems like it should be in your listing agreement somewhere if they are saying it is a 50% split. Here in Oregon we have it clearly defined by percentages. My personally, I always give 100% of any forfeited earnest money back to the seller, because I don’t feel like it is mine.
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The problem is that many listing agents feel like they deserve everything because they work so hard posting some pics and holding an open house. They also want the buyers commission if possible.
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Ask to see where you signed an agreement that states that. If they provide one let them know while you signed it was not clearly communicated so while you’ll honor the agreement, you’ll be seeking other representation for the sale because you need to trust your agent and feel a bit taken advantage of. And with a really sad smile of course. It’s not like you want to dump them, but they’re making you. What’s half the earnest money 5k? Versus sale commission.
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Never heard of such a thing, they get paid at close only. What state are you in? If it’s not spelled out in the listing agreement or contract do not give them a penny and find a new agent.
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We are in Colorado for the record but did not see this check box, the only thing noted for earnest money in the listing contract is the minimum amount
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In the KC market, our listing agreements have a section detailing earnest deposits. The DEFAULT is that broker takes zero %. I have ALWAYS taken zero %. We were told the only time an agent should put anything besides zero in there is if it’s a known difficult situation (previous title issues, one off’s that could cause financing issues, etc) and the agent is putting a large amount of money upfront into marketing or staging. But it should also be reimbursed back to the seller once it eventually closes.
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Tell them if they keep 50% you are ending your agreement with them to represent you and list your house.
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Ask to see the clause of the contract that specifies this. If they can, then you have to pay them and move on (if you have a lengthy listing agreement you might say you will pay but they need to let you out of the agreement).
If they cannot, then I would a) fire them as the listing agent, b) report it to their broker and c) report it to the local board of realtors.
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Ask to see the clause of the contract that specifies this. If they can, then you have to pay them and move on (if you have a lengthy listing agreement you might say you will pay but they need to let you out of the agreement).
If they cannot, then I would a) fire them as the listing agent, b) report it to their broker and c) report it to the local board of realtors.
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Despite what so many people are saying, yes, this is common in a LOT of places. It is also in the standard forms of many associations. If a Realtor spends thousands (sometimes tens of thousands) to procure a buyer, then both the Realtor AND the seller have lost. In some cases, a new buyer comes later and the Realtor actually lost more than the seller since the Realtor keeps paying for marketing that may cost more than another mortgage payment or two. People who do not regularly work with these contracts will continue to not let facts get in the way of their opinions.
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If this is the case, it will be in the listing contract. There was a willing and able buyer that withdrew and there is a typically a clause in the contract that addresses EMD in these situations. The brokerage keeping half is common.
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Look through the agreement with the buyer’s agent and not the sales contract. Some of these buyer’s agents are being sneaky and sliding in there that you have to pay them even if the loan doesn’t close. I’ve seen one agreement where if the buyer pulled out for no reason then they agreed to pay the buyer’s agent 3% commission.
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Your broker trying to take half the earnest money isn’t normal. If it’s not in your contract, they’re out of line. That cash is meant for you, not to fatten their wallet.
Ask them to show you where in the contract it says they get half. If they can’t, stand your ground. It’s your money.
If they push this, it might be time to find a new realtor. Plenty of honest ones out there who won’t try to pull a fast one on you. Don’t let them bully you into giving up what’s rightfully yours.
Remember, you’re the client. They work for you, not the other way around. Trust your gut on this one
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My seller’s contract had the realtor keeping the earnest deposit if the sale fell through. I asked her to remove it. She did so, without complaint. She said she only had one other person ask her to remove it. She specializes in very high-end properties and is the top agent in the area. It’s ridiculous that people sign contracts without reading them.
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If contract doesn’t show Ernest money goes to realtor, submit a formal complaint to registrar of realtors. You could complain to realtor, the agent’s boss, first.
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