I just learned of a friend being screwed out of a very large commission by a lawyer and a sharp, rotten buyer who verbally agreed to his terms but failed to perform at closing and in fact crowed “Hey, I f**ked you – get over it”. This is a growing problem. In the good old days of 2007, sales were all done via the Greenwich Multiple Listing Service, where sellers signed listing agreements guaranteeing payment of a commission to procuring agents and everyone was fat and happy.
Today’s market involves a myriad of players – first mortgagees, seconds, home owners, friends with temporary cash, you name it – and one party’s signed agreement is not binding on the others so even when a deal is pieced together, all the verbal promises that served as the glue are worthless. I myself put together a very small deal, with a commission that was fully disclosed and agreed to upfront by the buyer yet, just as I was patting myself on the back for putting my full, complete effort into a tiny deal, my “client” came back wanting to renegotiate the commission. I abandoned the deal.
So screw it. My advice to my colleagues is to get everything signed for and agreed to up front, including a property lien from short sellers who won’t have the cash to pay you at closing. In bad times, good faith and words of honor are the first to go out the window.