When Do Agents Need to Split a Commission?

Money & Ethics

When Do Agents Need to Split a Commission?

There's no statute of limitations on a broker's fee.

Q: A year ago, a Realtor friend told me about a house that had just come on the market (listed by another agent) that she thought I might be interested in buying. We toured the house together and gave the listing agent our names (and my friend's business card). But nothing came of it. My friend showed me that the house was way overpriced, and it was eventually taken off the market. Recently, the listing broker contacted me and told me the house's price had been reduced. I went to see it again, this time by myself. I submitted an offer, which was accepted.

My agent friend heard about this and now claims that she should be compensated for showing me the house first and for dissuading me from buying it at the higher price. I can see her point, but the listing broker is balking at sharing the sales commission. I'm caught in the middle. Who is right?

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Ethically, your friend is. If she had asked you a year ago to sign a form stating that she was showing you this particular house, it would have obligated the listing agent to split the sales commission with her when you eventually bought the house.

Even though your friend failed to do this, the listing agent should have contacted her, rather than you, when the house came back on the market. Likewise, you should have reminded the listing agent that you had first seen the house with your friend, and you should have named your friend as your agent in your contract offer.


Your local Board of Realtors can adjudicate this dispute, but I hope that you, the listing agent and your friend can all work it out amicably before settlement.

Have a money-and-ethics question you'd like answered in this column? Write to Editor in Chief Knight Kiplinger at ethics@kiplinger.com.