should buyers pay for vendor's agent's commission when the sale didnt go through?

[Aston]

Several years ago I purchased a property through an Agent that I had serious issues with. When it came time to pay the deposit I refused to pay it into the vendor's solicitor's account. Instead I paid the deposit to my solicitor's trust account with instructions not to pay the Agent's fee. On settlement day the Agent's fee less $10,000 was released.

The Agency threatened legal action but the final outcome was that the R.E.Agency missed out on $10,000.

[Davo36]

Yeah I've had this happen to me. This was with Bayleys. I was nervous about paying the deposit. Michael Block the sales manager for the North Shore Bayleys office rang and forcefully tried to get me to pay the deposit, making all sorts of promises about not taking the commission if the sale didn't go through, but I didn't believe him and so didn't pay it - AND THEN a month later, on this site, someone reported that they had in fact done this very thing to them.

Cost me around $1500 all up.

[speights boy]

epoh
Did you pay the deposit to the agent or the vendor's solicitor ?

[epoh]

epoh
Did you pay the deposit to the agent or the vendor's solicitor ?

Paid it to the rea who then took the commission 10 working days after unconditional and thhe then transferred the remaining to the vendor solicitor trust account.

[speights boy]

Right.
I can totally understand why you see it as "took the commission"

However, legally....perhaps?
Won't the argument be, that there was a debt owed by the vendor to the agent.
It was in effect paid by the vendor, but the process was simplified by taking the money directly, instead of a double transaction to the vendor and then commission back to the agent.

Hence your legal action should actually be against the vendor.

[TheLibrary]

how is there commission when there was no sale

[speights boy]

^ Because the definition of a sale in a standard listing agreement is when the property is unconditional.

[motivated]

ammend the terms to read that agent paid upon settlement. You will then find if there is an issue with settlement the agent will be more than helpful !

[sidinz]

there was a debt owed by the vendor to the agent.
It was in effect paid by the vendor, but the process was simplified by taking the money directly, instead of a double transaction to the vendor and then commission back to the agent.

There is clearly a real issue with the common practice of paying the agent from the deposit, in anticipation of settlement. The vendor is in effect paying the agent from money that is not yet the vendor's.

If the sale goes through, no harm done. If the buyer defaults, no harm done. But when it's the vendor who defaults, the poor buyer is screwed and left having to sue the vendor.

But what I really can't stomach is the solicitor taking money that he knows is the buyer's.

I am shocked that this can be the case and taking this on board for future purchases and amending clauses to safeguard myself.

[speights boy]

ammend the terms to read that agent paid upon settlement. You will then find if there is an issue with settlement the agent will be more than helpful !

That is between the agent and the vendor via their listing agreement.

The purchaser can control how much, when, and to whom a deposit is paid.
Not the commission.

[Davo36]

The fact that this is happening semi regularly now is symptomatic of the current indebted environment - because it really only happens when a vendor signs an agreement at a price below the mortgage value!

[speights boy]

Exactly Davo.
Which brings us back to just make it conditional on vendor's bank OK.

I can't really see why that answer from the bank couldn't come through well before settlement date.

[Keys]

Deposit?

What does that mean?

[morrison74]

if someone offered on my home with only a 1000 deposit I would tel them to go west! There's no skin in the game and you could walk and create a trail of disaster with settlements. 10% or a large amount also commits the purchaser from walking away form the deal. Put in the deposit clause "10% of the purchase price payable upon this agreement becoming unconditional and settlement given and taken to "whomever" trust account"

[BigDreamer]

if someone offered on my home with only a 1000 deposit I would tel them to go west! There's no skin in the game and you could walk and create a trail of disaster with settlements. 10% or a large amount also commits the purchaser from walking away form the deal. Put in the deposit clause "10% of the purchase price payable upon this agreement becoming unconditional and settlement given and taken to "whomever" trust account"

I disagree! As a vendor they should not be bothered what the deposit is unless if the sale is a private sale. With my latest agreement (still unconditional) I have specified only $1000 deposit and the agent did not even question me.