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By David deForrest,
General Manager
If you are a selling your home through ByOwner and a realtor approaches you with a customer, are you obligated to pay commission even though you make known your refusal to sign or verbally agree to any commission in the event it goes to contract?
This is an interesting and tricky question. You can be "dead right" and still be in plenty of trouble if you are careless on this.
A broker in Florida can enforce collection of a commission through the courts if he procures a buyer for your property. He/she does not need a written listing agreement to prevail in such a case. A judge might well, assuming the broker could demonstrate that you knew he/she was acting as a broker and permitted him/her to show your property and negotiate with a buyer for the purchase, rule that you had implicitly agreed to compensate him/her without a formal agreement. As to what compensation he/she could be awarded, the court would seek testimony on the prevailing rates in your area for brokerage and work from there.
I would guess that judges have grown tired of hearing how sellers knowingly permitted brokers to perform services for them even though they had "verbally" refused to grant them any compensation. Attorneys have an expression for cases that turn on two witnesses offering directly conflicting testimony as to who said what to whom. It involves the word "contest." Cases like that are often decided based on the actions of the parties and how a reasonable person would interpret them. It is usually presumed that folks don't perform work without anticipation of gain.
So your set of facts provided is a bit odd. You indicate that the seller "verbally" refused to agree to pay. Why then does the Seller permit the broker to involve him/herself at all? I think the Seller would be on stronger ground by having a written understanding with a broker prior to permitting him/her to show the property or to participate in negotiations. For example, you could both sign a simple letter or other document which would give the broker permission to show the property to a specific prospect on the basis that he/she would look to the buyer for any compensation. You would then be on pretty firm ground if you were challenged later on.
Of course, in the real world having the buyer pay a commission would boil down to the same thing as "you" paying the commission. That is, one must recognize that if a cost is to be added to the price of the purchase, a rational buyer would reduce his/her offer accordingly. On the other hand, assuming you "get your price" I suppose it makes no difference to you. But, knowing the human soul as I do, I suspect it would gall you nevertheless. If it did not you would have surely listed the property with a broker in the first place. It is a matter of established fact that properties listed with brokers sell at higher prices and quicker than those sold by owners. If this were not true, there would be no point in anyone paying for brokerage and brokers would vanish like the makers of buggy-whips did when the auto replaced the horse. Yet we remain and a reasonable assumption is that on the whole we provide value for the fees we receive or the public would not agree to bear them.
But, as I said, the Seller in your example, determined as he/she might be to refuse compensation to this "altruistic" broker would be best advised to have the broker confirm, in writing, his/her supposed willingness to renounce any compensation before you let him/her perform for you.
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