Legal Question in Real Estate Law in California

My son listed his condo for sale with an agent in San Francisco and agreed to pay the agent 5% commission.

I told my son's agent that when the tenant of my rental property leaves at the end of this month, I will also sign a contract with him to sell my condo for 5% commission. However, I have not yet signed a contract with my son's agent.

A prospective buyer is now willing to directly buy my condo vs my son's condo for cash and wants me to give him 5% discount which I would otherwise give to the agent.

My son's agent is insisting that I should allow him to represent me as my agent for 2.5% commission (about $18,000), vs. 5% and do all the legal paper work. The prospective buyer says that he wants me to give him 5% discount off the agreed sale price vs. 2.5% discount off the sale price.

What percentage of commission is fair to pay to my son's agent to represent me?

Can I give the discount to the buyer as credit at the close of the escrow vs. taking it off the sale price?

Thank you for helping me out.


Asked on 5/15/16, 11:04 pm

1 Answer from Attorneys

Great questions. Not really legal questions though. What it really boils down to is how comfortable you feel doing all the seller's legal paperwork yourself. Unless you are pretty savvy, and knowledgeable in real estate transactions, I don't recommend it. On the other hand, there is NO reason that a real estate broker should get a full half share commission when they never had to list the property or do anything to sell it. A lawyer like me could do all the paperwork for you and advise you through the closing process at the same rate we bill big commercial real estate investors and still never come close to $18,000. I would have to spend a full week working all day only on your transaction and my bill would be less than that.

The one catch in all this is that it sounds like you are taking a prospective buyer from your son and his broker. Without more information on how that came about I can't tell you if you have a legal obligation/risk to the broker.

What I suggest you do is give my office a call. I would be happy to give you a few minutes free telephone consultation on this to get some more details from you that would allow me to make more informed recommendations as to your options.

Read more
Answered on 5/17/16, 8:53 am


Related Questions & Answers

More Real Estate and Real Property questions and answers in California