re: Real estate commissions: What you need to know

LaveenAzRealtor — Sat, 06 Jun 2009 00:49:19 GMT

Q. Who pays the commission?

A. The seller. It is paid out of funds received from the sale of the home.

This statement is misleading. if the buyer is under a buyer broker agreement, then the compensation from the Seller shall be credited against the compensation owed by the Buyer to the Broker under the employment agreement. If the Buyer agrees to hire the agent at a 3% commission and then the Seller only credits 2,5% the "extra" .5 now becomes a closing cost expense to the buyer. So while in most cases the compensation is covered by what the Seller offers as a cooperating fee, the Buyer should be advised that they may have to pay the Agent they have hired. Another example of when the Buyer would have to pay their Agent is if they choose to purchase a FSBO. If this case the Seller must agree to pay the agent their cooperating fee.

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