When SPA Fails: The Operational Reality Agencies Must Prepare For
(An Add-On to the Fast Commission Risk Framework)
In earlier discussions, we explained the macro-risk of fast commission: When a developer delays or collapses, the agency unintentionally becomes the bank.
But there is a second, more frequent micro-risk that every agency must address: What happens when the SPA (Sale & Purchase Agreement) never materialises — after the commission has already been paid out?
Even if the developer is perfectly healthy, an early payout becomes a liability the moment the buyer fails, withdraws, or is rejected by the bank. This section outlines the operational reality — and how agencies can manage the risk in a structured, neutral way.
1. The Most Common Collapse Isn't Developer-Side — It's Buyer-Side
SPA failures happen far more often than developer failures. Typical causes include:
- Loan rejection or CTOS/CCRIS issues.
- Insufficient income documents.
- Buyer cold feet or internal family resistance.
- Sudden financial emergencies (medical, job loss).
- Valuation mismatches.
In many cases, the buyer withdraws after the agency has already paid the fast commission to the agent. This is where the exposure begins.
2. When SPA Fails, Early Commission Legally Becomes a Debt
If an SPA is not signed — or signed but later cancelled — the commission payout is no longer “income.” It becomes an advance that must be returned.
This sounds simple on paper (just ask the agent to pay it back). But reality is rarely this tidy.
3. Many Agents Cannot Return the Money
Most agents operate month-to-month. The moment they receive fast commission, it is usually spent on:
- Car instalments
- Rent
- Marketing costs
- Family obligations
So when the SPA collapses weeks later, the agent often has no liquid capacity to repay. This creates a direct financial burden on the agency — unless a system is in place.
4. The Debit Note System Creates a "Flight Risk"
Most agencies issue a debit note, planning to recover the advance from future commissions. There are two structural vulnerabilities here:
(1) The Pipeline Problem If the agent has no upcoming deals → no deduction → no recovery. The agency absorbs the full loss.
(2) The Flight Risk (A Perverse Incentive) When an agent owes RM5,000–RM20,000 in clawbacks, a dangerous psychological pattern appears: Leaving feels easier than repaying.
If staying means “three months working for free” to pay off the debt, many agents simply resign to join another agency and start fresh. The moment they resign, the debit note becomes uncollectible — a pure cost to the agency.
5. The Solution: A Data-Based Risk Categorization Model
Fast commission isn't wrong — it simply requires governance. Instead of a "blanket policy" (paying everyone or paying no one), agencies should use a Risk Categorization Model:
🟢 LOW-RISK (Safe to Fast Pay)
- Buyer is pre-qualified with strong financial profile.
- High-tier agent with excellent track record.
- High deposit collected.
- Repeat buyer or referral from trusted source.
🟡 MEDIUM-RISK (Partial Payout Only)
- Conditional loan approval.
- Mid-level agent with moderate track record.
- First-time buyer with average profile.
- Uncertain documentation.
🔴 HIGH-RISK (No Fast Pay)
- Complex loan structure or borderline DSR.
- Buyer with known CCRIS/CTOS issues.
- Low deposit / High Loan-to-Value.
- Brand-new agent with no track record.
This model allows principals to make decisions that are consistent, fair, and defensible.
6. Systems Make Fast Commission Safer
When an agency builds structured workflows through a proper ACN/ListingMine infrastructure:
- SPA timelines are tracked automatically.
- Loan probability is flagged early.
- Clawback terms are acknowledged digitally (no "I didn't know" excuses).
- Case histories reduce guesswork.
The agency no longer relies on memory, trust, or manual tracking. It relies on data — which makes fast commission predictable rather than emotional.
Balanced Final Conclusion
Fast commission carries two unavoidable risks:
Macro-risk: Developer delays/collapses → Agency becomes the bank.
Micro-risk: SPA collapses → Agent cannot repay → Agency absorbs the loss.
Both risks are manageable — but only with structure. Agencies that offer fast commission must recognize SPA failure rates, understand agent financial psychology, and protect themselves with policy.
There is no “right” or “wrong” model. The only dangerous model is paying fast without preparing for what happens when the deal dies.
