Avoid double commissions when selling your home

PUBLISHED 6 FEB 2019   

Double commission can cost home sellers a fortune - here’s how to avoid this expensive legal headache.

Many homeowners opt for shared mandates when they put their properties on the market, hoping that more agents on the job will mean a faster sale. Unfortunately, this strategy isn’t always effective - and it could end up being very costly.

If you’re considering an open or shared mandate, you’ll need to make sure you protect yourself against double commissions. Here’s what to do.

What is a double commission?

Every good mandate agreement will explicitly mention the amount of commission that your estate agent will receive after your property is sold - but what if there’s more than one agent?

Several recent court cases have seen numerous agents arguing that they are entitled to commission on the same sale. This usually happens when one agent introduces a buyer to the property, but they end up concluding the deal with another agent.

  • Legally speaking, the agent who initiates the transaction to take place is entitled to the commission - and the commission is always paid by the owner.
  • Unfortunately, if you pay that commission to one agent and the other agent takes the case to court and wins, you’ll end up being liable for the payment.

Can the court really ask you to pay for the same thing twice?

Unfair as it may seem, if the mandate agreement states that you (the owner) are liable to pay the commission, then you may be liable to pay double commission.

Should you find yourself in this type of situation, you’d have to hire a lawyer and probably pay the second agent before suing the first agent to return your commission.

Even if you won the case, the time and legal costs involved could be substantial, and you’re bound to end up paying more than you would on a single commission.  

Make sure your mandate agreement is watertight - or opt for a sole mandate

Selling your residential property should be a breeze - not the beginning of a legal battle.

  • If you opt for a shared mandate, make sure there’s a clause in the agreement that forces the agents involved to share the commission.
  • Better yet, giving a sole mandate to a reputable and motivated agent is the best way to avoid the situation altogether.
At Cape Realty, we strive to deliver service that is so good, you’ll never need another agent. If you’re interested in selling your Cape Town home, contact us today.  

Image Credit:
https://pixabay.com/en/open-house-sign-for-sale-2328984/