Home Buying in 15108>Question Details

Ztins, Home Buyer in 15108

Concerned about brokers cost, need to know if this is common wording for a contract with a realtor (see below)?

Asked by Ztins, 15108 Sun Feb 27, 2011

Form has on it:
A. if amt from listing broker is less than 3.5% of purchase price or $2,000 whichever is greater the buyer will pay or include in sales agreement
B. if the amt received from seller not represented by a broker buyer will pay 7% or $4,000 whichever is greater of purchase price or include in sellers agreement

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Answers

2
This question relates back to your previous question about commissions . . . and I'm glad you posted this since it does clarify that you're the buyer.

We can't give you legal advice. For that, you need a lawyer. However . . . .

As I and some others noted in our answers to your previous question, a buyer's agent can ask for a commission if the seller isn't paying one, or the amount to be paid is insufficient. And that's what those sentences provide: If not enough is coming from the listing agent, then you'd be responsible for the remainder.

Such wording is fairly common. Remember, though, that it's all negotiable. It appears, for instance, that your agent is looking for a split on a 7% commission. I don't know what's typical for your area, but regardless of what's typical, you can try to negotiate that down.

Your agent is also setting a minimum on the commission. And that, too, is negotiable.

Remember that--as a practical matter--if you're buying a house already listed and it costs more than about $60,000, you're not likely to pay much or anything. Just if it's a cheap house with a discount broker (Paragraph A) or a FSBO (Paragraph B) are you facing some exposure.

From the agent's standpoint, the agent is just trying to make sure he/she gets paid something for the work he/she is doing on your behalf. But if it makes you uncomfortable, negotiate on those points. Or make sure that before you put in an offer on a property, that the commission will cover those amounts. Or be willing to pay.

Again, that's not legal advice.

Hope that helps.
0 votes Thank Flag Link Sun Feb 27, 2011
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Hello Ztins,
It looks like the Brokerage firms buyer's agency contract is quite strict about receiving a full commission. If the property you plan on purchasing does not meet their "office standards" on commission paid; then they want to make sure that you understand that you would be responsible for making up the difference if the full commission they request is not met.
Each Brokerage firm may have their own expectations on what amount of commission they will receive so it may be in your best interest to shop around the different real estate companies in your area to determine how commissions are paid and by whom.
Hope that helps.
Good luck!

Laura Feghali
Prudential Connecticut Realty
0 votes Thank Flag Link Sun Feb 27, 2011
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