What Happens To Buyers Broker Fee If Offer Fails?

If a buyer’s offer on a home fails—whether due to rejection, withdrawal, or a deal falling through—the buyer’s broker typically does not receive a commission. The buyer’s broker commission is contingent upon the successful closing of the real estate transaction. Here’s what usually happens:

1. No Commission Without a Sale

Real estate agents, including buyer’s agents, usually operate on a commission-based structure. The buyer’s broker typically earns a commission only when the sale is completed and the property transaction closes. If an offer fails, no sale is made, so the broker does not receive their fee from the seller.

2. Exceptions: Buyer-Broker Agreement Terms

Some buyer-broker agreements may include specific terms about compensation, even if the transaction does not go through. If the buyer and their broker signed a “buyer-broker agreement,” the terms in that contract might outline when the broker is entitled to payment. Some agreements state that the broker may receive compensation if the buyer backs out of multiple offers or terminates the agreement prematurely, though this is less common in practice.

3. Out-of-Pocket Costs

If the offer fails, the broker does not receive a commission, but there may be cases where the buyer may need to cover out-of-pocket expenses that the broker incurred during the process, such as:

• Appraisals
• Inspections
• Administrative fees However, these expenses are only chargeable if explicitly stated in the buyer-broker agreement.

4. Future Opportunities

Even if a deal fails, the buyer’s broker will often continue working with the buyer to find another property. Their eventual commission depends on closing a deal on a subsequent property.

In summary, unless the buyer-broker agreement specifies otherwise, if the deal does not close, the buyer’s broker does not get paid. However, if an agreement outlines compensation in the event of a failed offer, the buyer may be responsible for some fees or costs.