Expert: Sue Bernstein - 6/8/2006

Question
Buyer's Agent Broke Agreement

I recently signed an agreement with a real estate broker to act as my buyer's agent to help me find and purchase a condo.  His original agreement was that once I purchased a condo, he would keep 1/3 of the buyer's agent commission and credit me 2/3 of the commission at closing.

He unilaterally tried to change the agreement to get an up-front retainer for his work.  I refused, and he told me he no longer wants to represent me.

Since I signed his agreement to represent me for 12 months, and he verbally broke the agreement, how do I protect myself if I use another buyer's agent and he comes back to me claiming payment based on the original contract?

Answer
Dear Steven,

In order for a contract to be binding there has to be agreement and an exchange of services.  In other words, if the agent does his due diligence and finds you a property you will pay him.  If he no longer wants to work with you he needs to give you a cancellation of the contract.  Everything must be in writing. If the agent is going to hold you to the contract but refuses to perform by finding properties for you I would imagine you could file a complaint against him.  You have to read the contract and see what it says exactly.  The agent cannot unilaterally change the terms and hold you to it.
I am not sure what state you are from but you need to find out if his giving you 2/3 of the commission is even legal.  
My question to you is why you feel the need to use a buyer's agent and not work with a more traditional agent who only gets paid when he has performed and escrow closes.  The commission is then paid by the seller and you have no liability.

I hope this has helped and good luck.

Sue Bernstein