Active Agents Get Paid


  1. Palace Properties placed an advertisement for a second floor, three-room
    apartment in Menucha St. in the local paper. Menachem saw the ad, and decided to
    do his own detective work. He spent two hours making phone calls and knocking on
    doors until he located the advertised apartment, which he bought. Does he have
    to pay any commission to Palace Properties?

  2. Mrs. Goldberg, aged 95, decided to move in with her daughter. She asked
    Yissochor, from Heimishe Homes, to find her a buyer for her immaculate
    apartment. Yissochor stated his intention to advertise the property in the
    weekend press. On Thursday night Yissochor’s daughter got engaged. On Friday
    morning, he called Mrs. Goldberg and announced that he has a buyer – non other
    than he himself (together with the intended bridegroom’s father)! The day
    after the contract is signed, Yissochor calls Mrs. G. again, this time asking
    for his commission on the sale! Is he entitled to payment?

  3. While
    Binyomin is waiting for the bus, he inadvertently overhears a conversation
    between two people, who happen to be a real estate agent and his potential
    client. The agent gives precise details of the property on offer, which Binyomin
    notes down. He subsequently goes to view the apartment on his own initiative. He
    likes it and buys it. Does he have to pay the agent commission for the
    information he received through him?


An inventor and a real estate agent both work with
information. However, there are basic differences between them. 
Whereas the inventor sells the information contained in his discovery,
the real estate agent uses the information in his possession to unite buyer and
seller. The inventor registers his patent and receives payment for supplying the
information to clients. He sells information. The real estate agent gets paid
for giving advice. He suggests suitable properties to the potential buyer. He
finds a suitable buyer for the seller’s property. He helps the parties bring
the sale to a successful conclusion. He is not paid for the information in his
possession, but rather for his advisory and bridging services.

It therefore follows that if the agent had no direct
contact with the buyer, he is not entitled to a commission since he did no work
for him. Thus, in case (a) Menachem gleaned information from a public
advertisement, which was open to all and not specifically directed towards him.
Indeed, even if all relevant details had been given in the advert (a very unwise
move on the part of the agent!), he would still not have been liable to pay the
agent. The agent did not act on his behalf.

In case (b), Yissochor had originally been employed by
Mrs. Goldberg to sell her apartment. Had he brought in a buyer who was an
outsider, he would have been entitled to his commission. However, once he
decided to buy the property for himself his role changed. He was no longer
acting as a real estate agent, but as a buyer. Commission is only payable for
bringing in a buyer, not for being the buyer, who is an involved party.
Mrs. G. gets her house sold for free!

Binyomin accidentally overheard the conversation between agent and client – in
case (c) – he actually received information from an agent doing his job.
However, since the information was not directed specifically at him, he can not
be made to pay the agent’s commission. However, since he derived benefit from
the agent’s professional services, it would be morally correct for him to pay
the agent.

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