Earned Commission: Buyer Agent Protection

There are indeed different commission arrangements for both the selling and buying sides. From a legal perspective, it is the Seller who pays both. From an economic perspective, the imposition of the commissions really befall the Buyer, in both instances, for it is the Buyer who has to come up with all the money to fund the transaction.

There are no real obligations on a full and complete service model. The commissions can be earned in their entirety simply by reason of an “introduction” alone.

The additional services might be outlined in the Listing Agreement or the BRA, but they are often just left out. So, that’s often not much help.

In structuring a transaction, it might be wise to determine who your client might be. If it’s the Buyer and the Buyer has control of ALL the money flowing into the deal, then, you should be paid no matter what.

So, if the Seller happens to be “under water”, then, that’s OK, just rearrange the deal to ensure that your client the Buyer pays you directly. Change the legal obligation! Protect yourself!

Brian Madigan LL.B., Broker


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