News & Media
Home located in Inverness, Florida
Credit: City of Inverness

Q&A: Why Pay More Agent Commission if a Tenant Opts to Buy?

A property owner pays an agent to manage his property, and the contract says an additional commission must be paid if his tenant eventually buys the property. Why?

FORT LAUDERDALE, Fla. – Question: My tenant wants to purchase the home he recently rented with the help of my real estate agent. I checked the listing agreement I signed with the agent and noticed that it states that if I sell the property to the tenant, I need to pay the agent an additional sales commission. I already paid the agent for the rental, and I do not understand why I have to pay again. Is this correct? – Paul

Answer: When you signed your listing agreement with your real estate agent, you agreed to its terms, so you will need to pay this commission too. Many listing agreements also require the payment of a commission if your tenant renews the lease for another year. This is yet another reason to read and understand anything you are asked to sign before you sign it.

All contracts are negotiable, and you should make sure that you are comfortable with the terms of any agreement you enter into. If a specific condition is important to you and the person you are negotiating with does not want to give in, you may need to walk away and find someone else to work with.

Of course, if what you are asking for is unreasonable, you may not get anyone to help you, so remember that any successful relationship involves some give and take.

In your situation, you should remember that your agent found the person who is now looking to buy your home. I can assure you from many years of dealing with real estate agents that it is a tough industry, and the people in it work long and inconvenient hours to earn their living in a very competitive environment. It would be unfair to your agent to find you a buyer for your home and only collect the much smaller rental commission.

Before you try to sneak around the listing agreement to avoid paying the commission, be aware that most listing agreements require the loser to pay the winner’s legal fees if your agent has to enforce it in court.

About the writer: Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He practices real estate, business litigation and contract law from his office in Sunrise, Fla. He is the chairman of the Real Estate Section of the Broward County Bar Association and is a co-host of the weekly radio show Legal News and Review. He frequently consults on general real estate matters and trends in Florida with various companies across the nation.

© 2020 Sun Sentinel (Fort Lauderdale, Fla.), Gary M. Singer. Distributed by Tribune Content Agency, LLC.