Must I Still Pay My Real Estate Agent Full Commission After Paying for Home Repairs Demanded by Buyer?

It is legal—in fact, it’s the industry standard—for your agent’s commission to not change despite unforeseen costs.

By , Attorney

Let's imagine that you've just sold your house to one of several bidders; in fact, one who offered more than the asking price. However, in the course of negotiations leading up to the closing, the buyers seemed determined to get some of that money back. They hired an inspector who poked around and came up with a long list of repairs; everything from fixing a switch-plate to tearing out wood around the shower and toilet.

By the time you reach the closing, you're frustrated to discover that you've had to shell out thousands of dollars for these various repairs. Yet your agent's commission hasn't dropped by one penny. Is this legal? Or fair?

Agent's Commissions Don't Drop When Home Sellers Pay for Repairs

It is not only legal, but the industry standard for an agent's commission to remain unchanged despite unforeseen costs such as repairs.

For details and fine print, however, you'll need to look at the contract that you entered into with your agent at the outset of the selling process. When you agreed to work with your agent, you probably signed such an agreement (the name of which varies from state to state) specifying when and what amount your agent would be paid.

Most often, these agreements state that the listing agent will be paid a percentage of the sales price of the property at the closing. The terms of this agreement are set prior to the sale, with no concessions for surprises or extra costs incurred by the seller.

It is normal real estate industry practice for the commission to be based off of the final sales price, whether or not there are credits back to the buyer for repairs, unforeseen circumstances, or any other reason. The only time an agent's commission amount will change is if there is a change in the actual sales price.

Can You Negotiate at All Over the Agent's Commission?

The commission structure for hiring real estate agents has been a topic of debate for decades, yet has hardly changed at all. Some negotiation over the amount you'd pay might have been possible before you signed with your agent, but now it's a little late.

However, there are some you might consider and discuss with your agent now. Did your agent explain the effect of making these repairs versus offering the buyer a price reduction in lieu of repairs? If not, you might discuss your misunderstanding and ask whether your agent can be flexible with the commission to help undo some of the harm from the misunderstanding.

On the flip side, though, did your agent do a good job of marketing your property and act as your advocate throughout the negotiations? If so, the result might just be an unfortunate set of circumstances.

Either way, you should discuss your point of view with your agent. Most agents' business depends on referrals and word of mouth and, if your agent sees merit in what you're saying, he or she might want to arrive at some compromise to ensure that you walk away from the transaction as a fan of the agent, not a disgruntled client.

Talk to a Lawyer

Need a lawyer? Start here.

How it Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you
Get Professional Help

Talk to a Real Estate attorney.

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you