Payment of Commission with a 0% BRA

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From time to time, an agent with complete a Buyer Representation Agreement and charge “0 %” in the commission clause.

Does this mean that the agent doesn’t get paid if they do an MLS deal? Do they have to turn over whatever may be the co-operating Brokerage’s commission to the Buyer? Do they waive that commission and leave it on the table for the Seller?

Here’s what the Buyer Representation Agreement (BRA) says:

“If, during the currency of this Agreement, the Buyer enters into an agreement to purchase …, the Buyer agrees the Brokerage is entitled to:

  1. receive and
  2. retain

any commission offered by a listing brokerage or by the seller.”

                                                              (formatting and numbers amended)

If the deal is struck at “x” %, then that’s it, no matter what amount might later have been placed in a BRA.

The commission deal is negotiated, just before the APS.

This arrangement is specified in the CCR.

Receive means that the Buyer’s agent gets it, and retain means that they keep it.

Also, there’s no money flowing to the Buyer in any way, unless there is an amendment of some sort.

The specified rate is helpful for the holdover “top-up” obligation, otherwise, it doesn’t really matter.

If the Buyer were expecting some kind of rollback of funds, then this would have to be handled differently.

On occasion, an agent will offer something, if they obtain the listing. So, effectively, there are two deals in play. It’s important to read the document carefully and ensure that it says what is intended. This will avoid misunderstandings in the future.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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