Dear Editor,
I am a Realtor in Jamaica and recently found myself in a situation that I suspect is more common than many agents openly discuss.
I listed a property for a client and almost immediately received several offers. The seller then decided that the asking price should be increased, so the property was returned to the market at the higher figure.
The response was extraordinary.
The property generated substantial interest and more than ten offers, including offers well above the revised asking price. Some were cash offers. Several purchasers were clearly serious and ready to proceed.
Having reached the point where there was more than enough competition, I advised prospective purchasers that no further offers would be received and submitted the completed offers to my client, together with my professional observations, so that he could decide which purchaser he wished to proceed with.
Then, on the day the offers were presented, I was advised that another person known to the seller might wish to make an offer and needed time to “get themselves together”.
That immediately raises a difficult question for agents.
How long should an agent reasonably be expected to hold more than ten genuine purchasers in limbo while waiting for somebody who may or may not eventually submit an offer?
Buyers do not remain available indefinitely. They find other properties. They reconsider their finances. Mortgage approvals change. Cash purchasers move on. Offers expire. What appears to be an extraordinarily strong selling position today can disappear surprisingly quickly.
More importantly, what happens to the agent who has already done precisely what he or she was engaged to do?
Under the standard Jamaica Multiple Listing Agreement, the seller gives the Listing Broker the sole right and authority to act as the seller’s real-estate agency during the listing period. The agreement also requires the seller to direct enquiries concerning the property, from whatever source, to the Listing Broker. Failure to do so is expressly described as a substantial breach of the agreement.
The seller unquestionably retains the right to decide whether to accept an offer. The MLS agreement makes clear that acceptance is ultimately the seller’s decision and that the Listing Broker cannot accept an offer on the seller’s behalf.
However, that is not the end of the matter.
Clause 3 of the agreement contains wording that every Jamaican real-estate professional should understand.
It states that where, before expiry of the listing, the Listing Broker presents an offer at or above the listed price, with no conditions, and providing for completion within a reasonable period, the seller is required to pay the full commission whether or not that offer is accepted.
That provision could be extremely important in circumstances where an agent has produced a genuine cash purchaser above asking price.
Of course, the precise wording of each offer matters. A genuine cash offer is not necessarily the same thing as an unconditional offer. Most property transactions will still require matters such as satisfactory title, proper conveyancing and the seller being legally capable of transferring the property. Whether a particular qualification amounts to a “condition” within the meaning of the MLS commission clause may ultimately require legal interpretation.
But the broader point remains.
An agent should not automatically assume that because a seller chooses not to accept an excellent offer, the agent simply loses everything.
The agreement itself recognises circumstances in which commission can become payable despite the seller deciding not to proceed with the offer presented.
There is another protection that agents should understand.
The MLS agreement provides that where, within six months after expiration of the listing, the seller sells or agrees to sell to someone who previously made an oral or written offer, or somebody with whom the Listing Broker negotiated before expiry, commission may remain payable provided the notification requirements set out in the agreement are followed.
Documentation therefore matters enormously.
Agents should retain the offers, dates, names of purchasers, proof that offers were presented, communications with the seller, evidence of negotiations and any instructions concerning prospective purchasers introduced directly by the seller.
Agents should also pay particular attention to the ten-day notification requirement following expiration of the listing where clause 4 may apply.
There is also a practical issue that rarely gets discussed publicly.
In theory, an agent who encounters a commission dispute takes the matter to his or her broker.
In practice, experiences can vary considerably.
An agent may have spent weeks or months marketing a property, arranging viewings, handling enquiries, qualifying purchasers, negotiating offers and finally producing a ready, willing purchaser. Yet when a dispute emerges, the response from the brokerage may sometimes depend on how much money is involved, the appetite for litigation, the cost of legal representation or simply whether management wants the inconvenience.
That leaves some salespersons feeling that although the listing belongs to the brokerage, they are effectively left to fight for the commission themselves.
Agents therefore need to understand the agreements they are working under rather than assuming someone else will protect their interests.
If a substantial commission is genuinely at stake, an agent should document the matter, notify the broker formally and obtain independent legal advice where necessary. Where the facts support a contractual commission claim and informal attempts at resolution fail, enforcement may ultimately require mediation, arbitration or court proceedings.
The MLS agreement itself expressly recommends mediation or arbitration as alternatives to litigation and also deals with costs where litigation occurs.
There is nothing improper about enforcing a contractual right.
Real-estate agents are routinely expected to comply with contracts, professional standards, fiduciary obligations, disclosure requirements and MLS rules. Sellers and brokerages should equally expect the contractual provisions governing commission to have consequences.
In the situation described above, the sensible approach is not to immediately threaten anybody with litigation.
It is to establish a clear written record.
If a seller says another purchaser wishes to enter the process, that prospective purchaser should be referred through the Listing Broker and given a short, clearly defined period in which to submit a complete offer.
What should be avoided is an undefined delay stretching into weeks while multiple genuine purchasers are left waiting.
An agent who has produced numerous offers, including cash offers above the asking price, should not casually allow that position to unravel.
The seller has every right to choose the purchaser.
But the seller’s right to choose does not necessarily extinguish the contractual rights of the Listing Broker where the conditions for commission have already been satisfied.
That distinction is one every agent should understand before the dispute begins.
Name and parish withheld
Editor’s response:
The circumstances described highlight why agents should read the commission provisions in their listing agreements carefully rather than relying solely on customary practice.
The RAJ Multiple Listing Agreement expressly recognises situations in which commission may become payable even where an offer is not accepted, but the precise wording of the offer, the operative listed price, the nature of any conditions and the surrounding facts will be important.
Agents facing a potential commission dispute should preserve all relevant documentation, communicate with the seller and broker in writing and obtain advice from a Jamaican attorney-at-law where a significant contractual claim may arise.
Where appropriate, formal dispute-resolution procedures or court proceedings may ultimately be necessary to determine whether commission is payable.
Disclaimer: This column is intended for general information and discussion only. It does not constitute legal advice and should not be relied upon as a substitute for advice from a qualified Jamaican attorney-at-law. The legal position will depend on the precise wording of the applicable listing agreement, offer documents and the individual circumstances of each transaction.
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