Escrow unintentionally cut commission check to buyer's agent 2.5% instead of 2%. What should I do? He did not answer my calls.

Asked by Henry Giang, Garden Grove, CA Thu Dec 6, 2012

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inna ivchenko, Agent, Calabasas, CA
Mon Dec 10, 2012
Are you a listing agent?
and everything ok with your cut, right?
Are you a broker too? or you are with Escrow?
I had some mistakes with commission splits but as soon as I sent Escrow a confirmation of the right split ( signed previously of course), they corrected all right away.

Best wishes,
Inna I.
0 votes
Ingrid Ski R…, Agent, Mission Viejo, CA
Thu Dec 6, 2012
Talk to your broker, escrow and maybe title. Good luck. Did you check what is on the escrow instructions you got in the beginning. That's the first place you should be looking. If this is not correct. You found the problem. If it is correct check the HUD for loan docs signing and of course the final HUD for closing to see where the mistake happened
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Ron Thomas, Agent, Fresno, CA
Thu Dec 6, 2012
As several respondees point out;
there is some information missing:

But, it sounds like the Escrow Company is on the hook.
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Cindy Davis, Agent, San Diego, CA
Thu Dec 6, 2012
who did not answer your calls? You need to be contacting escrow....someone at escrow will answer your call!
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Lori Hanson, Agent, Aliso Viejo, CA
Thu Dec 6, 2012
SInce the selling broker is entitled to what is listed in the MLS (2.5%) then unless you negotiated commissions down with the buyers agent, escrow did things correctly. If there was a change and no one informed escrow then it is not their fault. If they did indeed make a mistake then they will have to make it right.
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Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Thu Dec 6, 2012
He probably won’t return your call. Especially if you signed the HUD1 which indicates you agreed the figures were correct. I would be calling the title company if I had something in writing that said the figure on the HUD1 was wrong. Your question does not indicate if you were the buyer or seller, or when this happened. Those points may influence the right answer for this question, good luck,

Jim Simms
NMLS # 6395
Financing Kentucky One Home at a Time
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0 votes
Joseph Domino, Agent, Scottsdale, AZ
Thu Dec 6, 2012
You have not stated your part in this transaction. Are you the Buyer, Listing Agent, Seller?

The commission rate should have been negotiated in the Listing Agreement and the split on the MLS. If it was a Short Sale the amount paid would also be agreed to by the bank.

If the Buyer's agent got 2,5%, then someone lost out. If it was the Listing Agent, the broker needs to rectify with the other broker. If the bank allowed 2.5%. they must have approved the HUD1, so I would let it slide.
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Kawain Payne, Agent, Seal Beach, CA
Thu Dec 6, 2012
I would go directly to the office and speak with the officer face to face. Point out the error. Make sure you have supporting documentation that says what commission should have been. See what remedy they offer. I have never had this happen, but I would try a direct approach first.

Listing side usually chooses escrow company. Is this a company you have worked with in the past.?Hopefully they have enough honor to admit the error and correct it.

Best of Success on this one!!!!!

Kawain Payne, Realtor
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Thom Colby, Agent, Irvine, CA
Thu Dec 6, 2012
You need to speak with your Broker. Remember ALL listings and ALL commission belong to the Broker and the Broker pays you based on your split arrangement. If there's a problem, the BROKER needs to fight for it.

That said, if the commission instructions given to the Escrow Company were correct, and they gave the Selling side too much money, THEY will be responsible for making it right (with your Broker)

Best of luck,

0 votes
Hello Thom,
Thank you for your advice.
Here is the situation: I was the listing agent. On MLS listing I stated 2.5% for buyer's agent. The buyer's agent signed an addendum to cut his commission to 2% and .5% will pay to the seller to meet the asking price. On closing day, I was overlooked the HUD-1 (actually I am a rookie, this is my first transaction). Escrow paid buyer's agent 2.5% of the selling price. I worked with an online Broker, they charge me $500 flat fee only and they allowed I pickup my commission from escrow.
The transaction was closed on 11/30/2012. Few days later the Seller asked me about the .5% reduced commission which should pay to him. I called buyer's agent. He said the check already deposited to the bank, he will talk to his broker about this matter. But he did not answer my calls last 3 days. I talked to my escrow, they said we already signed the HUD-1. What should I do?
Thank you for your help
Henry Giang
Flag Thu Dec 6, 2012
Steven Ornel…, Agent, Fremont, CA
Thu Dec 6, 2012

I'm guessing Escrow should probably place a stop payment on the first check and then issue a new check once the Buyer's Agent returned the old check.

0 votes
Natalie Locke, Agent, Mission Viejo, CA
Thu Dec 6, 2012
If you have a written agreement on the commission amount, escrow should stop payment on the check and redo it properly. If they cannot recover the funds because it's already been cashed, they will need to cover their mistake. Escrow instructions specifically reference an error like this. And parties sign an agreement that they will remedy a mistake after escrow, if necessary. Good luck!
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Laura Coffey, Agent, Santa Clarita, CA
Thu Dec 6, 2012
I am not sure if you are the seller or not but if you had a contract with a listing agent and they gave to much to the selling agent you need to hold escrow and the listing broker liable.
If you sold the home yourself or you are the listing broker escrow is responsible and if they don't get the money back they still need to repay you.
0 votes
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