Is Commission Payable for a Full Price Offer?
While it may sound strange, the Buyer’s Agent is entitled to the co-operating portion of the Commission based upon a full price Offer without conditions. The trigger for commission entitlement is the “Offer” not the “closing”. That is the case unless the standard form Listing Agreement were amended to provide for payment “upon successful completion.
Naturally, the Seller doesn’t have to sell. No one can force them to do that, but they do have to pay the commission.
Assuming, the Listing Agent refuses, or doesn’t have the money, the Co-operating Brokerage can take an “assignment” of the Listing, and then sue the Seller directly in contract. The money flows first to the Buyer’s rep’s costs, then Buyer’s rep for commission and then 50/50, (Buyer’s rep and Listing Agent). So, the Buyer’s rep has the muscle here.
That was the case until 1 January 2022. The wording of the standard form Listing was changed slightly. We will have to “wait and see”.
Brian Madigan LL.B., Broker