Question:
If there is not enough commission to pay the Buyer’s Agent on closing, can the Buyer’s Agent sue the Buyer directly for full payment or the shortfall under the Buyer Representation Agreement?
Answer:
I think it might be somewhat difficult to go after your own Buyer based simply upon a commission deficiency.
In this case, the Buyer already paid all the money, and the problem was just that there was no money left for their own agent or a shortfall. The real problem in this situation was that the deal was structured improperly. And, whose fault was that? The Buyer’s agent didn’t get paid because the Buyer’s agent failed to protect themselves in the deal. Incorrect paperwork leads to no commission. That’s not the Buyer’s fault. Naturally, there are exceptions. But, most of the time in my experience the Buyer’s agent just failed to protect the commission payment.
Brian Madigan LL.B., Broker