Question:
What happens when a deal (buyer/seller) firm ups but in the end it didn’t close so you didn’t get paid your commission.
Answer:
Your entitlement to commission under the standard OREA forms is based on the APS not the closing.
Let’s assume that you are the Listing agent. Get the Brokerage to Invoice the Seller for the commission. At this point, they will then realize that they actually owe the commission.
Assuming that the Buyer is in default, then they can sue the Buyer for the deposit, and damages. The Seller’s damages will include your commission. So, things can add up quite quickly. If this doesn’t happen (ie. no Invoice) then, the Seller might not expect that they have to add your commission to their losses. They may simply settle the case for their own losses (which they know about) and leave you out of the picture. Then, it’s all settled and finished. That’s hardly the time for you to show up.
So, the Invoice goes out asap. That means you are part of the settlement discussions right from the beginning.
And, one further matter to note, the deposit can be paid anywhere that the Seller and Buyer agree. The Brokerage holding the deposit has “no say” because they are not a party to the contract. This means get involved right away.
Brian Madigan LL.B., Broker