Sales Commission Allocation Group 5

Real Estate Case Scenario Review & Analysis Janssen Hugo Ellen Isabella Canada
Marilou Guerrero
Ethical Standards For Real Estate Practice Joh-Anna Salvacion
Lyceum of Alabang Shiara Rose Guno
CY 20-21 1st Semester | 11 Nov 2021 Joann Nazareno
 Overview
Background
A sales commission is the amount of compensation paid to a person based on the gross sales generated.
This is typically a percentage of sales, which is paid on top of a base salary. A sales commission may be paid
when a sale is generated, or when cash is received from the customer.
Most real estate agents make money through commissions. These are payments made directly to real
estate brokers for services rendered in the sale or purchase of property. A commission is usually a
percentage of the property's selling price, although it can also be a flat fee.
Commissions generally range between 4% and 6% across the country, though they may be higher or lower
based on the market.3
The seller pays the commission unless the buyer and seller negotiate a split. Most sellers factor the
commission into the asking price, so it can be argued that the buyer pays at least some of the commission
in either case due to the higher asking price.
Each agent has an agreement with their sponsoring broker that specifies the agent's cut of the commission.
It could be a 50/50 split between the broker and the agent, or anything else upon which they've agreed.
 Case Scenario
Incident Narrative
People involved:
(2) Real Estate Salespersons
(1) Condominium Unit Owner

• First lease contract agreement August 16, 2019 up to July 16, 2020

• Rental fee as per advised by the Salespersons was two hundred fifty thousand pesos (Php
250,000.00) per month with payment terms of one (1) year advance and two (2) months deposit.

• On July 23, 2020, the Salespersons advised the Owner for the renewal of the lease agreement but
was told that the Lessee requested to lower it to two hundred thousand pesos (Php 200,000.00)
per month due to pandemic.
 Case Scenario
Incident Narrative

• Together with the request to lower the rental fee, the Lessee, according to the salespersons, will
only pay two (2) months advance payment since the contract will only be for six (6) months and
not one (1) year.

• The Owner agreed to the requests of the Lessee.

• Renewal of contract started on August but the Salespersons advised the Owner that the Lessee
would be able to pay on October 2020.

• Came October 2020, no rental fee was remitted to the owner.

• The owner then proceeded to the Admin office of the building to check on the contract submitted
to their office.
 Case Scenario
Incident Narrative

The Owner found out the following:

The rental fee is still the same as previous year’s rental which is two hundred
fifty thousand pesos (Php 250,000.00) per month and not two hundred
thousand pesos (Php 200,000.00) per month;

• The contract is still one (1) year contrary to what the Salespersons told the
• owner that it was only for six (6) months;
• Payment terms is still one (1) year advance, and not two (2) months only;
• The Lessee paid as early as August 10, 2020 contrary to the Salespersons
• alleged that the Lessee requested to pay on October 2020.

Due to the discovery, the Owner demanded to remit or return to her the total amount that should have been
given to her. Failure of the respondents prompted the Owner to file a complaint against them.