QUESTION
Is it legal and if he sells it for $180,000, does he get to keep the difference of $20,000?
Asked on Feb 15th, 2016 on Estate Planning - Illinois
More details to this question:
I own a block of flats. I engaged three local real estate agents to market the property on the free market, with a signed letter to each, stipulating the sell was to be on an open listing basis limited for a period of 90 days. The letter stipulates "Should the agent find a purchaser willing able and prepared to pay at least $160000 or such other sum as may be accepted by the seller, will receive a commission of 7.5 percent"; Two agents listed the property at $160,000 whereas the third agent listed it at $180,000 without my consent.
3 ANSWERS
Commercial Attorney serving Chicago, IL
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Ashcraft & Ashcraft, Ltd.
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It appears that you agreed to pay a commission to the broker that secures a sale at or above $160,000. The broker commission will be greater with a higher purchase price but the broker only keeps the commission, not any part of the purchaser price.
Answered on Mar 23rd, 2016 at 9:26 PM
Estate Planning Attorney serving La Grange, IL
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Law Office of T. Phillip Boggess
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It is my understanding that you wanted to sell at at least $160,000, and you were paying a commission of 7.5%. So the agent would receive 7.5% of $160,000 ? or $1,000,000 depending on the sales price. So it is in everyone's best interest (except the buyer?s) for the price to be higher.
Answered on Mar 21st, 2016 at 10:48 AM
Your note does not appear to limit their ability to place a higher sales price on the property. Normally a listing agreement is signed with a specific listing price set forth. You appear to have not done that. If the building are similar, the simple fact is that the 3rd is going to be a hard sell if it is priced 20k higher. He only gets a commission on the higher sales price, not to keep anything over $160k.
Answered on Mar 21st, 2016 at 10:48 AM