Home Buying in Naperville>Question Details

ILLTRYIFYOUDO, Other/Just Looking in Tucson, AZ

CAN AN AGENTS COMMISSION BE IN PAYMENTS? OVER A PEROD OF TIME OR MUST THEY BE PAID AT CLOSING?

Asked by ILLTRYIFYOUDO, Tucson, AZ Fri Jul 12, 2013

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"ILLTRYIFYOUDO",

I'm not sure who pays commission in Arizona. In Illinois, the seller pays the commission to the listing broker. The listing broker then pays a cooperative commission to the buyer's broker.

If you were trying to work out an arrangement, it would have to be between you and the broker, not the agent. The agent isn't the one who can approve a highly unconventional agreement. A listing agreement is a contract between the seller and the broker. The broker employs agents (who may be licensed brokers themselves) to market services, including buying and selling real estate.

If you're a seller, please understand that your agent has marketed your property at their own expense with the expectation that they will be paid when the transaction closes. In other words, they've done their job. As a seller, you aren't waiting for your money from the title company or escrow agent after closing...and it doesn't come in installments. The attorney gets paid at closing. What's more, your broker has to pay the buyer's broker. There really isn't any leeway here.

If you have no proceeds from the sale of your home or are bringing money to the table in order to close, then you can sell short (which would require bank approval and has severe credit implications) or you can try negotiating with your broker on their commission. Some will, some won't...but, choose wisely. We're not all the same and we're in a business where most times you "get what you pay for"...good and bad.

My advice is to be upfront about your situation when you're interviewing prospective agents. By interviewing several, you should have a very good idea of what your home's selling price will be. Work out your closing costs from that number and see where you are. Ask for the agent's best commission rate and make the most informed decision you can.

Good luck.
2 votes Thank Flag Link Fri Jul 12, 2013
Who pays, when it's paid and how much are all agreed to in the brokerage agreement. That can be amended at any time with the written consent of all parties to the brokerage agreement. It is rare, but I have seen commission paid after closing over a period of time.
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0 votes Thank Flag Link Sat Aug 24, 2013
Seller pays listing company at closing. I have never seen it done any other way in 28 years. However anything may be possible. It has to be in writing in advance. Most companies have rules regarding this as so much money is set out up front by the agent and companies that being paid for their services at closing is considered the standard practice.
0 votes Thank Flag Link Sat Aug 24, 2013
Unless you are talking about a multi-year lease contract that closes, yes residential commission needs to be paid in full at closing. Keep in mind an agent is working fro free for a long time before getting paid at the ned of their job. Would you want your employer to pay your salary in installments later in the future even though you got the job done?...
0 votes Thank Flag Link Fri Aug 23, 2013
I suppose it's possible.. that the agency might form some kind of agreement with the agent to pay them over time... but that would have to be an agreement between the agent and his/her agency.

Typically, however, as those before me have stated, the agent is paid at the time of closing, or within a few days of closing, once the money has been filtered through the agency, and comes back to the agent.
0 votes Thank Flag Link Fri Jul 12, 2013
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Agents get paid at closing, it's like getting paid at the end of the job for people who work by the project. Sellers pay the listing broker commission and then that is shared with the Buyer's broker, who in turn pays it to the agent.

Jen and Mark Bowman
Keller Williams on the Water
941-840-0117
0 votes Thank Flag Link Fri Jul 12, 2013
All commissions must be paid at closing
0 votes Thank Flag Link Fri Jul 12, 2013
You are a BUYER and you are asking this question?
The buyer does pay either Agent's commission.
Who told you that?
0 votes Thank Flag Link Fri Jul 12, 2013
no, Ron i am not a buyer nor a seller. but thanks for your rude reply, nonetheless. my friend says iy can be paid to an agent over time when owner carries. i say commission payable and due at closing.
Flag Fri Jul 12, 2013
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