Real Estate News & Commentary

A Disgruntled Developer Tries to Get Back Commissions Already Paid to Agents

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A Miami-Dade County, Florida developer, Related Group, has filed multiple lawsuits in the past month against real estate brokerages seeking the return of commissions on deals that fell through. The amount in controversy, which exceeds $460,000.00, is tied to commissions advanced by Related Group to the named-defendant brokerages on at least 19 sales contracts in [...] View the full article: A Disgruntled Developer Tries to Get Back Commissions Already Paid to Agents on The BiggerPockets Blog. This content is Copyright © 2017 BiggerPockets, Inc. All Rights Reserved.

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    Michael Creel
    Replied about 12 years ago
    Can’t imagine why anyone would pay a commission out prior to closing. Also, those deposits should have been kept in an escrow account, unless of course it was stated that the deposits were non-refundable.
    Mattresses
    Replied about 12 years ago
    this behavior is downright unethical. Reply Report comment
    Mattresses
    Replied about 12 years ago
    this behavior is downright unethical.
    Bad Credit Loan
    Replied about 12 years ago
    I wonder if this legal action going to do anything. In my personal opinion it will not since the charges are too low, comparing to company’s profits.
    Lake Michigan Beach Builders
    Replied about 12 years ago
    Just when you think you have seen it all… Who pays the realtors before the deal closes? I will be double checking my listing agreements from now on to be sure!
    Steven Boorstein
    Replied about 12 years ago
    Very interesting. Lots of problems arising from this down real estate cycle, huh? It appears you have a builder that was trying to provide an incentive to agents by offering “early” commissions. Not a bad thing, but very risky. Then you have agents who accept this, but arent’t willing to pay it back when their buyer doesn’t close. Why? Because they’re hurting, too. But it would seem to me that the agent is then unethical, no? I know of other industries where the salesman is fronted the monies, but is then debited the commission if the deal doesn’t go to completion. Why would this be any different? Not that I am on the side of the builder, but you would think that these agents are the unethical ones here. Steven Boorstein
    Steven Boorstein
    Replied about 12 years ago
    Very interesting. Lots of problems arising from this down real estate cycle, huh? It appears you have a builder that was trying to provide an incentive to agents by offering “early” commissions. Not a bad thing, but very risky. Then you have agents who accept this, but arent’t willing to pay it back when their buyer doesn’t close. Why? Because they’re hurting, too. But it would seem to me that the agent is then unethical, no? I know of other industries where the salesman is fronted the monies, but is then debited the commission if the deal doesn’t go to completion. Why would this be any different? Not that I am on the side of the builder, but you would think that these agents are the unethical ones here. Steven Boorstein Reply Report comment
    Nadine
    Replied about 12 years ago
    Very nice reading and it works me well. Thanks for it. Reply Report comment
    Nadine
    Replied about 12 years ago
    Very nice reading and it works me well. Thanks for it.
    Paul Bazzo
    Replied about 12 years ago
    A clarification about commissions to those who think it’s ridiculous that anything was advanced: Realtors were pitched these pre-construction projects back in 2003-2004-2005 and asked to bring prospective buyers. Buyers had to put 20% down and wait for three years for the project to be completed. At the time, Related paid the realtors a fraction of the commission (usually 25% with the first 10% deposit at signing, another 25% with the 2nd 10% deposit about three months later, and would disburse the remaining 50% at closing, which they have not paid). The brokers being sued by Related right now dedicated a considerable amount of time and effort into getting these buyers, who at the time (three years back) were interested in buying. Related didn’t advance commissions without getting something substantial in return (20% deposit). Moreover, they are keeping the deposits of those who right now are unable or unwilling to close, which makes up several times for the commissions disbursed. The lawsuit is ridiculous and will backfire. Brokers did their part of the job and got Related millions of dollars which allowed it to undertake the projects. They already paid taxed on the money and spent it. They also were not paid 100% of the agreed commission, but typically only about half. Related should be content with not having to disburse the remaining half. But boy are they greedy…
    Joe
    Replied almost 6 years ago
    It told us the double check is very important for us
    Kenneth H. Brown
    Replied over 3 years ago
    That is a good tip especially to those new to the blogosphere. Simple but very precise information… Thanks for sharing this one. A must read the article!