Question About Sales Commission

[cdmtdm]

i have just signed all the contracts for my house sale pending deposit to be paid , what is normal practice for the sales commission? is it paid to the farang sales person out of the deposit or on final payment( settlement)? and what documentation should i ask for as a receipt for this payment ?, they keep referring to normal practice or the industry standard as far as i was aware the " industry" is unregulated ... of course i prefer to pay on settlement when the sale is complete ..

any ideas ?

[chokrai]

I dont think you should give the whole commision from the down payment but part of it is usual I think.

[ballbreaker]

I was a buyer and seller did not pay agents commission until we transferred title of property at land office.

As buyer I made sure details for all payments were spelled out in the contract I signed and you as seller should have done same.

[PattayaPhom]

Owners have a tendancy to renage so many agents would desire the commission paid from the deposit.

[sotsira]

It's a sale commission, therefore it's paid once the sale is completed,

only a fool would pay it out of the deposit, as that is not what a deposit is meant for.

[cdmtdm]

ok the agents for some reason requested that the commission not be part of the contract , so that the buyer was not aware of the figure ..why i am not sure ..perhaps they are doubling dipping ... either way we have a verbal agreement on the percent to be paid and as mentioned only a fool would pay out on the deposit stage.. so i offered to give them a percentage in line with the deposit amount , that was rejected ...the latest is a threat to take legal action against the lawyer if its not paid out in full ...suggestions ? the lawyer is holding the deposit by the way ... my concern is they get paid and if something happens between now and settlement they wont want to know .... greed !

[JohnC]

What legal action? Sale is not complete until exchange of contract and at that point your lawyer pays all the disbursements including agents fees. They are just bluffing and trying to bully you, what happens if the sale falls through at the last minute? Will they refund the deposit? I don't think so somehow, I am surprised however that your lawyer is not dealing with this as they should understand normal practice.

[cdmtdm]

John C , i agree with your comments and the threat of legal action is a joke , the action will take months if not years to reach court and the fees for commission are due to be paid on he 6th of Nov which is settlement day ...thats a no brainer , the lawyer acts for myself and has also represented one of the agents in the past , i sense some sort of conflict of interest here ...my written instructions to the lawyer, for the funds to be sent to my account in full, was met with a refusal to do so due to a legal threat to sue him and me ... i advised him i will take full responsibilty for that but the funds are still being held , thats the bit i dont get , i am paying the legal fees he is working for me .....

[cdmtdm]

Greed is at play here by the agents , which also amazes me , they work under the radar in an occupation reserved for thai nationals ...why not wait and take the fee no questions asked ,

[silsburyhill]

Greed is at play here by the agents , which also amazes me , they work under the radar in an occupation reserved for thai nationals ...why not wait and take the fee no questions asked ,

'Greed'. Look up the meaning of karma, ctmtdm.

[givenall]

Owners have a tendancy to renage so many agents would desire the commission paid from the deposit.

Do not pay the agent till everything is completed, regardless what the agnet demands. If you pay the agent they will not work as hard or at all to make sure trhe deal is closed

[davejones]

What's the name of the agent?

[sotsira]

This thread is a good example of why it's better to buy and sell property in Thailand without the use of

agents and lawyers, the process is very easy and straightforward and can be dealt with the buyer and seller

by a couple of hour visit to the land office.

To the OP, it seems you've got two issues going here,

the lawyer not giving you the deposit, should raise a red flag,

and the agent wanting payment without closing the deal, and not wanting to show the payment

to the buyer.

Both parties seem to be acting unprofessional and untrustworthy.

[cdmtdm]

prefer to keep that to myself until its settled DJ ... why do u ask ? givenall i agree !!

[xylophone]

Now here is another take on the situation.....................it is quite normal for the agent to want their commission paid from the deposit. This is because if a sale and purchase agreement has been signed between two parties and a reasonable deposit paid (say between 10 and 20% of the sale price) then as far as the agent is concerned they have done their job.

You have a legally binding sale and purchase agreement which means that if the purchaser reneges on the deal then you will get a small percentage of the deposit after the agent has taken their commission out of it. And of course the potential purchaser loses their deposit, not to mention the fact that you can pursue the potential purchaser through the courts in order to make them go through with the purchase if you so wish.

If you renege on the deal, then that is no fault of the agent and the purchaser has every right to pursue you through the courts in order to get you to complete the sale.

You see either way, the agent is due their commission and it is often paid from the deposit because as far as they are concerned you have a signed sale and purchase agreement which is legally binding and therefore they have done their job.

[IamNotaNumber]

I have owned property in many countries and never have I heard of an agent being paid before the transfer is 100% completed. And these are agents that charge a sensible 1 or 2%, unlike the fantasy 5 or 6% or more that agents here seem to imagine (erroneously) they are worth.

As for agents who request that the details of the commission should be hidden from the buyer, I don't see how could this be anything other than some sort of fraud? Anyone who is acting honestly should be more than happy to have all the details laid out for everyone to see. Anyone who wants to hide something must be up to no good.

[johnnyk]

Pay the commission when you have ALL the money in hand and papers signed. Nothing is truly sold until the money is 100% in hand. Until then it can still all go south. IMO most falang agents are bozos who have run out the string back home and selling real estate in Thailand is their last chance. Don't trust them.

[IamNotaNumber]

IMO most falang agents are bozos who have run out the string back home and selling real estate in Thailand is their last chance. Don't trust them.

Indeed. Some of the most incompetent and dishonest westerners I have ever met have been "working" as estate agents/condo salesmen in Thailand. Though for sheer incompetence and idleness the farang insurance brokers here do offer some pretty stiff competition.

If you only trust anyone involved in Thai real estate about as far as you can spit you should be fine.

[chiang mai]

I have owned property in many countries and never have I heard of an agent being paid before the transfer is 100% completed. And these are agents that charge a sensible 1 or 2%, unlike the fantasy 5 or 6% or more that agents here seem to imagine (erroneously) they are worth.

As for agents who request that the details of the commission should be hidden from the buyer, I don't see how could this be anything other than some sort of fraud? Anyone who is acting honestly should be more than happy to have all the details laid out for everyone to see. Anyone who wants to hide something must be up to no good.

The typical agent commssion rate here is 3% and is fairly standard nationwide. As for the the agent wanting his commssion before the deal is complete: Post #15 sets out the facts in this matter quite well, despite you owning property elsewhere previously you have much to learn about the way property is bought and sold in Thailand.

[Farma]

Having been involved on the sidelines in over a dozen Thai-Thai property deals over the past decade I've yet to see a real estate agent/finders fee paid prior to settlement date. All money matters were settled on the day the property was transferred at the land office.

The OP has every right to question the agent wanting commission prior to the sale completing. The agents work is not complete until the sale goes through.

[chiang mai]

The approach to commission is very different here, seven years ago I ordered a new CRV from Honda and paid a depsoit of THB 20k, a few days later I had to cancel the deal because the agent renaged on the delivery date which was a key condition of the sale. It took me many visits to the dealer to get my deposit back, the sales girls had taken it as part payment of their commission the moment I had walked out of the showroom. At the final showdown the girls had a whip round to collect my 20K as I (pretended to) chatted to other potential farang customers about the antics of the staff, I finally got my 20k in a mixture of hundreds, fifties and even twenties, but I did get it.

[cheeryble]

I wonder at your lawyer keeping the deposit.

What he's doing is acting like an advocat in France where the lawyer is more like an arbiter for both parties.

If you and only you employed him, you did it for him to act for you. He has no right to keep the deposit unless you allowed it, it is a payment to you.

If your lawyer is acting for both parties without your agreement to get an extra payment (doubt it can be true but who knows) that would be clearly unethical. More likely he is in fact honest just wants to see the deal done with you fulfilling too and is holding the deposit to ensure that. But that is in fact beyond his remit.

Edited October 14, 2012 by cheeryble

[bushwacker]

The red light went on when you said Farang real estate agent. How does a farang legally get a work permit to sell real estate. And then there is the request that no documentation covering the commission be made. When somebody threatens a law suit .... my response is typically ... bring it on. The agent is being paid to bring forward a buyer to close a deal, not to bring forward a possible buyer. His job is obviously not completed and therefore the commission is not payable. It sounds like the lawyer is part of the scam.

[IamNotaNumber]

The typical agent commssion rate here is 3% and is fairly standard nationwide.

That is certainly not the case in Pattaya. And as far am I'm concerned even 3% is over the top. 1 or 2% is more than enough.

As for the the agent wanting his commssion before the deal is complete: Post #15 sets out the facts in this matter quite well, despite you owning property elsewhere previously you have much to learn about the way property is bought and sold in Thailand.

I've actually been involved in several dozen condo purchases here, and have never come across commission being paid in advance of the transfer of title.

The approach to commission is very different here, seven years ago I ordered a new CRV from Honda and paid a depsoit of THB 20k, a few days later I had to cancel the deal because the agent renaged on the delivery date which was a key condition of the sale. It took me many visits to the dealer to get my deposit back, the sales girls had taken it as part payment of their commission the moment I had walked out of the showroom.

I ordered a car and paid 5000B deposit (20000B seems way over the top as the deposit is only there to weed out people who have absolutely no money). The delivery date was not respected and I got a cheque from the dealer for 5000B the same day that I went to cancel, with no difficulty at all. This seems to be common with other people I know who have had to cancel car orders for similar reasons. Of course if you cancel for some personal reason of your own then the deposit would be forfeited, though I know of some cases where it has been refunded even so.

So I think that you have had unusual experiences, or maybe you just choose the people you do business with very badly?

[tig28]

The agent is being paid to bring forward a buyer to close a deal, not to bring forward a possible buyer.

Hi bushwacker

Not trying to argue -- but to learn.

After the agent has sold the property and finalised a contract .... what else do you expect of him ?

[chiang mai]

So I think that you have had unusual experiences, or maybe you just choose the people you do business with very badly?

Seven years ago, maybe unusual, dunno, but how do you badly choose a Honda dealer!

BTW it's been 3% in the places I've lived during the past ten years, Bangkok, Phuket, Chiang Mai and Suhkhothai, maybe Pattatya is the odd man out, it is in most other respects so why not commission also.

Edited October 14, 2012 by chiang mai

[PattayaPhom]

The main point of the OP is that until the transfer is done, anything could happen and the sale may not go through, so why should the agent receive his commission. Lets look at in the event that the OP holds the deposit and decides to renage, that then leaves the buyer without his deposit and the agent with a bad reputation as he wouldnt be able to have the deposit refunded.

There are two sides to every story, the deposit should be held either by the agent or a 3rd party until the transfer is complete. This is the only way to ensure nobody looses out.

[PattayaPhom]

Greed is at play here by the agents , which also amazes me , they work under the radar in an occupation reserved for thai nationals ...why not wait and take the fee no questions asked ,

The occupation is not reserved for Thai Nationals, however I would like to ask, if this was/is your understanding, why did you employ someone illegal...'under the radar' to sell your property?

[sotsira]

The main point of the OP is that until the transfer is done, anything could happen and the sale may not go through, so why should the agent receive his commission. Lets look at in the event that the OP holds the deposit and decides to renage, that then leaves the buyer without his deposit and the agent with a bad reputation as he wouldnt be able to have the deposit refunded.

There are two sides to every story, the deposit should be held either by the agent or a 3rd party until the transfer is complete. This is the only way to ensure nobody looses out.

Another example of how unregulated the property business is in Thailand, every agent seems to have their own

rules & regs regarding correct and ethical procedures.

As you say,

some agents keep the deposit to pay out once both parties complete.

Others keep it to pay for their commission.

Then there's another which gives the deposit to a 3rd party? what if there isn't a 3rd party?

A deposit should be paid to the seller who then holds it until the sale is completed,

if the seller then reneges then he would be held responsible for the refund to the buyer,

if the buyer reneges then the seller keeps the deposit, this should be stipulated within the sale

agreement contract so both parties are in agreement with each other.

[IamNotaNumber]

A deposit should be paid to the seller who then holds it until the sale is completed,

if the seller then reneges then he would be held responsible for the refund to the buyer,

if the buyer reneges then the seller keeps the deposit, this should be stipulated within the sale

agreement contract so both parties are in agreement with each other.

Why should the vendor be trusted with the money? That sounds like a really stupid idea to me.

Having met some of the out and out crooks who own property here I would only pay a deposit over to a third party.

Given that a sale can easily be arranged within a couple of days anyway I don't really see the need for a deposit at all.