It seems that template PSA agreements commonly used in MA have a clause that says "If either party defaults under this contract, such party shall be liable for the fee of the broker", while template Listing Contracts say that owner shall pay a cash fee "upon transfer of title to any purchaser" ...
My question/concern is that specific PSA clause "Clause" seems to provide no benefit to either the buyer or seller, only the broker. Why:
1) The terms for the Seller to pay the broker commission is in the listing agreement. If the Seller breaches a PSA without the Clause in question, depending on the specific interpretation of "transfer of title" (from listing agreement) and other fuzzy interpretations the Broker may or may not be legally due their commission from the Seller. However, adding this Clause to PSA makes it 100% clear that the Broker will by due the commission if the Seller breaches the PSA. Therefore this clause is not beneficial to the seller. Given that the template listing agreement also states that the broker "make reasonable efforts to obtain a buyer", if the buyer breaches the PSA (and the broker has "obtained" this buyer), I don't see how the broker could sue the Seller for the commission if the Buyer breaches (even if "title" is transfered by the PSA instead of the final deed.)
2) For the buyer, this clause binds him to pay the broker's commission if he breaches the PSA. Without the clause only the Seller could collect damages for their losses. Clearly this clause does not benefit the buyer.
3) Another factor for the seller is that agreeing (via the PSA Clause) that the broker is due the full commission from a breaching buyer, they may be reducing their chances to recover damages from the buyer due them. The clause specifies clear liquidation damages for the Broker, but the Seller is left only with a more fuzzy claim do damages if the buyer breaches.
4) If the Broker is allowed to take his liquidation damages from the PSA deposit (before the Seller get's any proceeds) when the buyer breaches, then this is cleary a dumb Clause for the Seller to agree too.
Whey would either a Buyer's or Seller's attorney agree to have this clause present in the PSA ?
Read Similar Questions
- MLS listing expires, then offer accepted from third party - required to pay commish to listing broker?
- Selling broker fabrication of a second offer
- Can my broker represent me instead of seller?
- Property removal from 40B LIP ?
- Can a Seller rescind a verbal acceptance-- statute of frauds in MA?
- offer to purchase additional terms with estate sale
- Real estate agency disclosure law
- MLS misrepresentation-Broker misrepresentation
- What is a Buyer's Real Estate Agent?
- Must broker or real estate agent convey all offers to seller?
Recent Posts about Massachusetts Laws
| Forum | Last post |
|---|---|
|
I have a lease until June 2012, but I am very unhappy with my living situation, I pay half of the rent. I am a....
I cannot answer this question based upon your statement. Who are they....
|
2/8/2012 11:00 by Alexm2012 |
|
Is it legal for Massachusetts employer to send a SALARIED employee home for the day, without pay, for a dress ....
Federal and Massachusetts courts have upheld employee dress codes as l....
|
2/8/2012 09:09 by Munsterwoman |
|
Hi, I'm the grandmother of 4 beautiful grandchildren. The oldest has hit a rough spot with defiance (puberty ....
I'm very sorry about your situation and the ordeal your family is goin....
|
2/7/2012 23:02 by gramy |
|
Hello. I'm in the middle of an appeal for SSDI and my attorney asked me to get a residual functional capacity....
First, I guess it's not a good sign that you do not trust your current....
|
2/7/2012 08:18 by Adam13 |
|
Hi everybody.
I am trying to make an offer on a house, which is an estate sale. As I understand, the execut....
|
2/6/2012 13:50 by ilya980 |
|
I've been helping a friend pay for a lawyer to go to probate court.
Her ex-Boyfriend, whom she is taking to c....
|
2/6/2012 12:21 by rbiddle |
|
If I witness a person getting beat up at a party and just run away without calling the cops or helping the guy....
I don't think so. In terms of civil liability (as opposed to cri....
|
2/3/2012 07:17 by Coller |
|
My father passed away in September. The probate is over and settled, no contests to the will. My mother is the....
Your dad died in September and the probate is already settled – ....
|
2/2/2012 18:50 by JGraul |
|
Hi. My cousin is charged with possession with intent to distribute drugs in a Massachusetts court. He is not a....
Unfortunately for your cousin, if an immigrant is convicted of certain....
|
2/2/2012 08:07 by Sister6 |
|
Just curious if you have any thoughts or have read any information regarding the success rate of divorce media....
Yes, I've also seen the 90% estimate on various websites, with some me....
|
1/24/2012 11:47 by RRM |
|
Several of my colleagues will dictate consultation notes in which they state they don't have the complete hist....
The question probably boils down to whether or not such practice is wi....
|
10/2/2011 18:37 by Anonymous |