Should A Realtor Collect Commission Immediately On A Land ...

Q: We had our home listed with an agent in Michigan. They were unable to find a buyer soon enough for us, so we agreed to enter into a Land Contract. It was to be a 2 year Land Contract with a balloon payment due after 2 years. The Listing Agent got their 6% right away??we never thought to question it. Now, 2 1/2 years later, it would appear the Buyer will have to default on the Land Contract and we will once again have to put it on the market. My question is, was it legal/ethical for them to take the 6% right away? After all they didn?t really sell the house for us since we are getting it back. Now we will have to list again and pay a 6% fee all over again. I realize it?s not the Realtor?s fault this guy is a loser, but it sure doesn?t seem fair to us that the Realtor got almost $6,000 and we didn?t really sell the house.
?SSB,

A: The way (and the timing) that your agent was paid was, or should have been, spelled out in your listing agreement. As long as payment was made as agreed, yes, it was legal/ethical for the Realtor to receive the commission up front, in my opinion. At the risk of sounding callous, the Realtor appears to have done their job, which was to bring you a ready, willing and able buyer. When you agreed to accept payments on a delayed basis (whether by a Land Contract, or by carrying back a note secured by the property, or some other mechanism), you took on the responsibility for collecting those payments. In situations like this, ?fair? is what the parties agree to in a contract.
Phil Lunnon is a Realtor? with Lunnon Realty in Lakewood, CO.

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