I’m relocating to another area in Texas and submitted an offer on July 17, requesting repairs for obvious foundation settling. The offer included an addendum where the seller’s agent agreed to pay a 2.5% commission to the buyer’s agent. On July 19, the sellers countered by proposing a cap on foundation repair costs. I requested quotes to verify the costs before agreeing to the counter offer. After an extended period of no response from the seller’s agent, we validated the costs and accepted the counter offer on August 1, which still included the 2.5% commission addendum. However, the seller’s agent submitted the contract to title without the addendum, setting the buyer’s agent commission to $0 without acknowledgment. Both the buyer and seller had agreed to the original addendum. The seller’s agent is now refusing to pay the buyer’s agent. Is this considered fraud, and is there any legal recourse available?
Unfortunately there is nothing really that can be done that you haven’t done. The buyers if they lost something can file a report, but then they will also be coming after you and your firm. I’m a broker in charge and have had to deal with this before anyone was aware of it happening. In our firm’s case it never got close to closing, but there was money lost through non-refundable deposits. There are some ways to protect yourself, but some of these scams, but in most cases it’s just to show that you have done your due diligence in vetting the seller. A big Red flag is that they can’t meet with you. Usually saying that they are out of state. I have my agents pull deeds and get picture ID for every listing. They must have also at least met through a zoom call and verify information about the property with the person claiming to be the seller. Like asking about something that is or isn’t on the property.
Legally, sellers are not obligated to pay the buyer’s agent commission unless it’s explicitly outlined in a purchase agreement. However, if you agreed to pay the buyer’s agent commission in your contract and then renege, it could disrupt the transaction and potentially lead to legal complications.
The seller’s agent’s removal of the buyer’s agent commission from the contract without acknowledgment constitutes a clear breach of the agreed terms.
Potential Legal Recourse:
- Communicate Directly with the Seller: Although this may not resolve the issue immediately, it’s important to establish a clear record of the agreed commission.
- Involve Your Real Estate Agent: Your agent should represent your interests and work with the seller’s agent to correct the issue.
- Consult with a Real Estate Attorney: If negotiations don’t resolve the issue, an attorney can evaluate your legal options and potential actions.
- File a Complaint with the Real Estate Commission: If the seller’s agent is licensed, you can file a complaint with the relevant real estate commission.
Potential Legal Claims:
- Breach of Contract: The seller’s agent has violated the terms of the agreed-upon addendum.
- Fraud: If the seller’s agent deliberately misled you, it may be considered fraud.
Important Considerations:
- Documentation: Collect all relevant documents, including the original offer, counteroffer, and any communications related to the commission.
- Timelines: Be aware of any deadlines for filing claims or disputes.
- Financial Implications: Evaluate the potential costs of legal action compared to the amount of the commission at stake.
It sounds like the seller’s agent might be acting in bad faith by not honoring the agreed-upon commission addendum. This could be considered a breach of contract, not necessarily fraud. Legal recourse might involve contacting a real estate attorney to review the contract and explore options for enforcing the original agreement or seeking compensation.