What If The Estate Agent Has Already Spent The Commission?

Posted on January 30, 2008 by | 0 Comments

Peter Mericka B.A., LL.Bby Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd


As any lawyer or conveyancer will confirm, a contract may have to be cancelled for a variety of reasons, even after it has become unconditional.  But what if the estate agent has already spent the commission?

Lawyers and conveyancers often have a battle on their hands if a purchaser client needs to cancel the contract, or a vendor client wants to let a purchaser walk away.  The estate agent, fearful of the loss of commission, becomes furious and demands to know why the lawyer or conveyancer has turned “deal wrecker”.

In so many cases the estate agent depend heavily on commission payments to solve cashflow problems.  Little wonder that so many estate agents do what they can to convince the parties not to cancel.  But what if the estate agent has already spent the commission?  What chance does a consumer have in such circumstances?

I raise this problem again because of the revelation that one of several commission factoring businesses, Express Commission Australia, has alone “recorded more than $30 Million in real estate commission advances”.

Just another reason why estate agents should NEVER have control of the contract!


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