Once you sign it, you will [most likely] be legally bound to whatever it says.
Let me see if I can help clear the confusion. First, both brokers are correct in asserting that the seller pays for a commission that is usually divided between both the listing agent and the selling agent. However, if this form is used AND the agents fill this out correctly, the Buyer's Representation Agreement should 1) clearly state the amount of the commission and 2) clearly state the home address for which the buyer and agent are working to acquire.
In most cases, our MLS here in Calfiornia shows how much the buyer's agent (also called the "selling agent") will receive as a commission. Typically, up here in Northern California, the amount is between usually between 2.5 and 3% of the selling pricing. As with all transactions, commissions are negotiable for both the buyer and the seller, so if you want to pay your agent only, say, 2.5% of the sales price rather than 3 percent, then so specify on the contract. In Paragraph 4 of the contract, it states that if the commission is paid by someone other than the buyer (for example, the broker), then the broker is obligated to tell you if the commission is greater than your agreed upon 2.5% and is allowed to keep the overage (if no boxes are checked in Paragraph 4) or must refund the difference to you, as the buyer.
So, for example, when I work as a Facilitator/Realtor who gets paid 1% on the sale of a home, my buyer clients are "refunded" the difference between the 1% commission I agree to accept and the amount that is actually paid to my broker. Otherwise, if I'm working as a full-service Realtor, and my fee is 2.5%, then the commission paid to me would be 2.5% on the sale price. If the commission paid to the Realtor is 2.5% then no money would be refunded to the buyer, but if it is 3% then the buyer gets 0.5% or any funds above the agreed upon 2.5%.
Hopefully, this makes some sense to you. If you have any questions about the amount of the commission, ask the agent to show you how much the seller is offering to the buying agent to bring a buyer. Because a Buyer Representation Agreement is a contract, it's always better to fill in the blanks properly with the correct information rather than "assume" that the understanding is known. You are within your rights to ask, and it makes good sense to be clear especially when it comes to legal contracts.
Grace Morioka, SRES, ePro
Area Pro Realty
San Jose, CA
You should understand, the prices I see houses going for now, by the time the closing is done, it was not worth it as an agent, to sell that property. Maybee you wanted a home at dirt cheap price, expect the broker to bust he/her backside for you, for nothing. Welcome to the real world, we feed our family by selling, not charity works. So who ever broker is out there telling you the seller pay all commisions, they half right. Buyer and seller can pay, depend on the deal you made with the agent or the broker, when you want them to search for dirt cheap houses for you.
Another time a buyer may pay for an agents commission is if they find a for sale by owner. First your agent will try to get the sellers to agree to pay the or at least a portion. Normally the seller wants the house sold and the few dollars it would cost would be very worh it to them. the buyer agent at that time would be taking on the listing,so to speak. they would have to see that all works out for the best for their buyer which most often means doing all the work for the seller also, and believe me, there is plenty of work and investigating to do!!! Good luck to you, find an agent that you trust and you feel comfortable with, and then go for it!!
If I can help or answer any questions for you please feel free to call
Letâ€™s think that the Buyers Broker compensation is 2%. Therefore, your broker will get 2% of the selling price or the price agrees to get compensation. You contract established that you will pay a compensation of 3%. Then, you are obligated by contract to pay the 1% left.
If the Buyers Broker Comp is 3% and your contract say 3%, then you ought them nothing. And so on.
Some agents do this just in case the buyer ends up buying a For Sale by Owner and the seller does not want to compensate the Buyers Broker at all.
Too bad you did not get an explanation.
This is how it will happened in Minnesota. I hope CA is the same.