Comments on: Seinfeld Loses Broker Commission Case

By: sellsius°

sellsius° — Wed, 24 Jan 2007 15:33:42 +0000

Irene,
In NYC, buyers rarely sign an agreement with a broker when looking to purchase. On rentals, many a buyer have used brokers to find apartments which they say they dont want (or they use a decoy to be shown the apartment). Later they return to re-negotiate, cutting out the broker fee. This is a common tactic in rentals and the experienced firms will require a prospective renter to sign a contract and authorize a credit check. And still some renters will try to avoid paying the fee. Most people, however, are honest IMO.

By: Irene Astwood

Irene Astwood — Wed, 24 Jan 2007 14:57:12 +0000

I am a Realtor in California. I am so glad the end result that the hardworking agent get paid. This is telling the buyer consumer to honor the loyalty to his/her agent. There are so many cases that the poor agents show buyers houses and the buyers end up with the listing agents to close the transaction. Generally, the buyers refuse to sign the buyer representation contract. The unethical listing agent usually don’t ask the buyer whether he/she has an agent. Agents, we are all in the business together, be ethical and share the cake.

By: sellsius°

sellsius° — Fri, 19 Jan 2007 18:25:29 +0000

Here’s a clue. Supposedly the contract called for Seinfled to cut the Cohen check (for the co-broke 1/2 and Seller to cut the listing broker check for the other 1/2).
http://www.realestateheadlines.net/2007/01/jerry_seinfeld__1.html

By: sellsius°

sellsius° — Fri, 19 Jan 2007 18:17:50 +0000

Christine, yes the attorney usually will pay the brokers out of escrowed funds (2 checks) but may not have in this case because of issues over the entitlement. It is possible the seller’s attorney didn’t want to be drawn into the suit by writing the Cohen check and asking buyer to do it (as part of proceeds due seller)& buyer didn’t, instead giving it all to seller. I don’t know.

Sellers’ attorneys prefer to cut the full check to the listing broker & let them cut a co-broke check but this is rarely done. If there is a co-broke I name both brokers in the contract so that at closing I can write 2 checks. I also ask for 2 bills, one from each broker (this is also routine.

By: sellsius°

sellsius° — Fri, 19 Jan 2007 18:07:23 +0000

A seller can, and many times does, instruct the buyer to cut the checks for payments seller has to make, eg. mortgage pay-off, brokers, transfer taxes, with the balance paid to seller.

So it is possible Jerry was asked to cut the 2 brokers checks, one to Cohen and one to the listing broker and he just cut the listing broker check and included what would have gone to Cohen in the proceeds due the seller.

We’ll have to track down exactly who paid what to whom.

By: sellsius°

sellsius° — Fri, 19 Jan 2007 17:05:08 +0000

christine - you are correct! of course, the attorney would cut the checks from escrow. since seinfeld was the buyer, he owed no fee to the agent who helped him - unless they had a specific buyer brokerage agreement - which, apparently they did not [also, never seen a buyer pay a brokerage fee to an agent working “with” a buyer in new york - sub agency = client seller has an agreement with the exclusive listing agent, who is working “for” the seller in a fiduciary capacity, for x amount of commission and that exclusive agreement determines co-brokerage fees to be paid to sub agents. it’s very common in new york that buyer agents, who represent buyers in a fiduciary capacity [are there any?], receive -zero - from the seller. an agreement between the listing broker and selling broker would also determine compensation.

By: Christine

Christine — Fri, 19 Jan 2007 16:38:39 +0000

Actually - Jerry would not have cut the checks himself. Most likely the attorney cut the check from escrow. I have never taken a check from the buyer.

But - here is where I am stumped. The article did not say if the listing agent got paid - so if in fact she got paid - but not the selling agent - THEN the listing Broker should be in hot water!

By: sellsius°

sellsius° — Fri, 19 Jan 2007 15:23:06 +0000

True Noah. Cohen had a co-broke agreement with the listing broker. Cohen actually sued Seinfeld and the listing broker. The legal question was whether Cohen was entitled to the co-broke as being Seinfeld’s agent. As is typical in NYC closings, 2 checks are cut–one for the listing broker and one for the co-broker. I guess Jerry cut only the one check to the listing broker.

By: Noah

Noah — Fri, 19 Jan 2007 14:47:51 +0000

Agreed with Jonathan? Why should Seinfeld as the buyer PAY anything at closing to any broker? Use of a buyer broker is free to the buyer as the buyer gets paid from the split of the seller’s brokerage commission, as agreed in the exclusive listing contract and promoted in central brokerage listings systems.

In short, every buyer broker knows before hand what their cut will be if a deal is brought to the table.

This is very confusing to me.

By: Kristal Kraft

Kristal Kraft — Fri, 19 Jan 2007 09:01:47 +0000

I love when the courts set a precident in favor of the broker. So often they take the consumer’s side, who obviously went around the broker to buy the house. What’s the problem with waiting one whole day?