Commission Payment Demand Letter for Real Estate Agents

What a good one includes

• Specific details of the completed transaction, including the property address, closing date, and final sale price.
• Citations of the exact clauses in the listing agreement, buyer broker agreement, or commission sharing agreement that mandate your payment.
• A precise calculation of the unpaid commission amount, clearly showing the percentage or flat fee agreed upon.
• Copies of supporting documentation, such as the closing disclosure or ALTA statement, proving the transaction successfully closed.
• A clear, reasonable deadline for payment, typically ten to fourteen business days from the date of the letter.
• Explicit instructions on how the payment should be made, including wire transfer details or mailing instructions for a physical check.
• A professional statement indicating the legal actions you are prepared to take, such as filing a complaint with the state licensing board or initiating arbitration, if the deadline is missed.

Common mistakes to avoid

• Allowing emotional frustration or aggressive accusations to cloud the tone, which can make you look unprofessional and weaken your position in court.
• Sending the demand letter to the wrong party, such as targeting the individual agent instead of the managing broker who legally holds the commission.
• Failing to attach the signed contractual agreements that prove your right to the disputed commission.
• Setting an unrealistic, immediate deadline that does not give the recipient a reasonable amount of time to process the payment or consult legal counsel.

Frequently asked questions