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Is my listing broker entitled to a portion of my liquidated damages I received from a buyer?

Santa Barbara, CA |

Buyer #1 failed to perform and released a portion of his deposit as my liquidated damages. Now my broker wants to take 1/2 of my damages, even though we have escrow #2 that will close successfully in a few days in which he will get his commission. What's even more upsetting is I specifically ASKED my agent if they will take any commission from my damages before I signed the cancellation, and he said No because we will have escrow #2. Now they are going against their word and asking me for half of my damages even thought I am paying them commission when we close.

I want to add that the agent didn't do anything in this transaction, I negotiated BOTH sales on my own because my own agent was always too busy to show my house.

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Attorney answers 3


Normally a broker (listing or selling) is ONLY entitled to what is agreed under the written contract. Depending on what the dollar amount is, you may want to sue under Small Claims Court and take your documentation and timeline, logbook etc. into court to show the Judge. If the amount exceeds the Small Claims ceiling, you can sue for Breach of Contract, Breach of Fiduciary Duty, etc. Look on for either a Real Estate attorney or a Litigation Attorney in Santa Barbara. Good Luck on your case!



We do have a listing agreement but it's kind of vague whether he can get BOTH a portion of my liquidated damages through a defaulted buyer AND the usual commission through a successful closing by another buyer. I just think he's greedy in going after what is supposed to be my damages.


Take your contract to a good real estate/business attorney in your area for review.

The contract should have language concerning the above in it.



You need to take a look at the Listing Agreement between yourself and your broker. Many standard agreements do have provisions for brokers to collect some commissions when a buyer prevents the closing. But, you need to check the language of the Listing Agreement and see how that language apples to the facts of your case. If you want to send me listing agreement next week, I can take a look at it for you.

However, since your agent told you they would not take any part of the deposit as their commission prior to your signing the cancellation, they probably can't take any part of the deposit because you accepted whatever split of the deposit based on our agents representations. Your agent and broker have a fiduciary duty to you and your entitled to rely upon their representations to you and they have an obligation to put your interests above their own.

That listing agreement also will state the duties of the brokerage. Generally speaking, it is not your duty to negotiate your own transaction as that is why you hire an agent. You shouldn't even speak to the Buyers directly unless it is with your agent present.

If your not happy with the broker or agent, then check your listing agreement and see if they provided all of the services they promised for the commission they expect.

Kevin A. Spainhour, Esq. Spainhour Law Group

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