How do I collect an unpaid real estate commission or agent invoice?
How do I collect an unpaid real estate commission or agent invoice?
Short answer
Real estate commission disputes require review of your representation agreement, state licensing rules, and the specific transaction terms. Unpaid commissions are typically enforced via civil suit — not mechanics liens — as they are personal property service contracts.
Real estate commission collection is more legally complex than standard invoice collection. Commission entitlement depends entirely on the representation agreement and state licensing requirements. Before pursuing any legal action, confirm three things: your representation agreement is in writing and signed, the transaction occurred (or you have a basis for claiming commission on a failed transaction), and the party you're billing is the party obligated under your agreement, whether seller, buyer, or another broker.
Mechanics liens generally aren't available for real estate commissions because commission work is a service contract, not a material or labor improvement to property. Your primary remedy is a civil lawsuit for breach of contract. For amounts under your state's small claims limit, small claims court is available and accessible without an attorney. For larger commission disputes, a real estate attorney is advisable because commission disputes often involve agency law questions that go beyond standard contract issues.
Before filing suit, send a formal demand letter from your brokerage citing the specific representation agreement, the transaction details, and the commission calculation. Some disputes settle at this stage once the other party realizes litigation will cost more than the disputed amount. If the dispute involves another licensed agent or broker, check whether your state's real estate commission or MLS offers dispute resolution or arbitration. Many do, and arbitration is faster and cheaper than court.