My cousin just bought a place in Michigan and the agent he was using promised him 50% of his commission for using him. My cousin bought a place for $260k and his agent got a commission of $7,800. After the close the agent refused to pay him and said that he got a great deal on the house and he shouldn't have to pay anything. Now he has agreed to pay $400 when he owes $3,900.
Any experience on how to handle this situation?
Was this referral arrangement (or kickback) in writing and agreed upon by both parties' brokers? If not, he really doesn't have any recourse.
A commission on a transaction can only be paid to a broker. This includes any referral compensation. Unless your cousin is an agent working for another broker, the commission would never be paid directly to him and would have to be paid to his broker, which in turn would be re-disbursed back to your cousin, the agent.
Thanks for your reply. In IL, there are a lot of agents who openly advertise that they will give part of their commission to the buyer, but of course each state is different.
It's not so much about the money, but this agent made a promise. Can my cousin complain to the agents managing broker not to get the money but to just let the managing broker know how this agent is dealing with clients?
Sounds like a small claims case.
Yes, advise the broker, it may not be the first time. It won't be enforceable if not in writing. It generally has to show up as a credit on the HUD, for the buyer.
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