It's legal. And it is not uncommon in some areas during certain market conditions. Where I am, the buyer would just walk away, shaking their head, wondering how he ever met such a crazy person as this. The seller should understand that in the case of a buyer making a full price, non-contingent offer, that they could be liable for a commission to their agent even if the offer was not accepted and there was no closing. Always read the fine print; that's one of the things attorneys do.