Home Buying in 93012>Question Details

SE, Home Buyer in Camarillo, CA

In California, is the buyer responsible for a comission on teh purchase,.

Asked by SE, Camarillo, CA Sat Jun 23, 2012

I found in my offer papers a clauise that specifies that I am charged a 3% commission at closing. When I qestioned the fee I was told it was standard practice to charge the buyer half the commission.

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Sounds to me the best advice at this point is to call a local attorney that specializes in real estate law. You can/should first try contacting the DA's office, too. Ask for the REFAT team: REFAT’s mission is to prevent, detect and report real estate fraud. Maybe you can be part of a class-action investigation.
Go to: http://www.refat.org/ for more info. Persons who believe they may be victims of real estate fraud are encouraged to fill out and return a Real Estate Fraud Complaint Form for review. I hope this helps!
1 vote Thank Flag Link Thu Aug 15, 2013
If it is written in the buyers representative agreement, you may be able to read on and find that it is offset by the commission offered by the sellers agent to the buyers agent. If you are purchasing a short sale, this may be your agents way of making sure that they are paid 3% commission on your purchase. For example, sometimes the commission permitted by the lender will be 5% and then sometimes the sellers agent has disclosures that a negotiator must be compensated out of that money too so, your agent might end up with less than 3% and so, depending on your paperwork, you could be asked to compensate your agent the difference.

Another time where your agent asks you to pay a commission is if they represent you in a property being sold by the owner, where they owner has no agent. In this case, your agent is actually only charging what they would have received if they represented a property not being sold by an owner without an agent. The work for your agent is actually much more in this case because the seller typically has to be educated on the processs and have their hand held by your agent, even though your agent isn't being compensated for that part of the transaction, the seller representation.

However, in my opinion, merely stating this is a standard of practice, would be unacceptable to me. Sometimes agents don't feel that it makes sense to educate the client on the process and this lack of desire to communicate, could stem from agents underestimating the clients ability to understand or assuming that the client will be unwilling to proceed as the agent wants to, leads to all the typical problems with lack of communication in any relationship, lack of trust, frustration, etc.

Go back to your agent and ask them to explain further. Also, on your estimated buyer costs, is a commission shown there as an expense to you? Is there an offset shown? Commission can be a considerable add on cost one you will want to understand.
1 vote Thank Flag Link Sun Jun 24, 2012
It is customary in our area of California that the seller pays the commission and commission is negotiable. Did your agent tell you that they are charging you the 3%commission? It sounds like the agent is double dipping and also getting paid from the listing broker. I would contact the Broker that the agent works for first to discuss this. I agree you should contact a local attorney to discuss this if you don't get resolution from the Broker.
0 votes Thank Flag Link Mon Sep 15, 2014
Make sure I understand, are you saying this was buried in the offer? Not typical at all. It could be in a buyer agreement with your agent, that was signed before making the offer, you see that all of the time.

If your agent put that in the offer without telling you, I think there should be some discussion about waiving the fee. Most of the time in CA the seller pays the commission. I would have to know more about this.
0 votes Thank Flag Link Tue May 7, 2013
Commission is negotiable so there is no set amount. It is common that the seller to pay the commission for both listing and selling agent in California. You should have been made aware of the clause that states you were going to have to pay the commission for your agent, prior to escrow. In addition, you should have received a settlement statement (HUD-1) which gives you a breakdown of all the fees.
Web Reference: http://www.blancadover.com
0 votes Thank Flag Link Fri May 3, 2013
Stating anything about a commission as “standard practice” is unacceptable. Commissions are negotiable in California. Yes, sometimes there are uneducated, lazy, agents who live by the “throw it against the wall and see if it sticks” method… and, they don’t take pride in what they do for a living. They don’t care about you, the client.

In order to give you a true answer to your issue I’d have to see your paperwork; however, I’m not a party to your deal or an attorney. I would start by confronting the agent along with the agent’s broker. If the issue is still there and without resolution, I’d seek a real estate or contract attorney’s advice.

Good luck. I hope all works out.
0 votes Thank Flag Link Fri Jan 25, 2013
Thanks for all the very profesional and solid answers. The clause for the commission was on an agreement to use an escrow company affiliated with the reality company of the realtor. It was a clause that stated I was to pay a comission fee of 3% to my agent. This had never been disclosed before nor talked about before the listing was made by another agent in the same office.
When I asked about it my agent insisted that it was standard practice in California and did not in any way leave it open to neogiation even though I voiced surprise and displeasure at having to pay it.

I posted this as an answer but I could not find a way to add on to my original question.
0 votes Thank Flag Link Sun Jun 24, 2012
Using the phrase standard doesn't excuse a thorough explanation.

You received some very excellent answers from, Bonnie, Chris, Tim, and Annette.

It would be impossible to give you a clear answer because documents vary, Buyers Broker Agreement, Purchase Contract, Short Sale Addendum, New Home Construction, HUD closing statement. Since we are not a party to what you signed and any other document tied to that document your best resource is to have your agent and/or their Broker explain it to you.

As other's have said the standard of practice is negotiable and in California most of the commissions are paid by the Seller to the Seller's Broker, who in turns shares that commission with the Buyer Broker.

Have an amazing day!
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Sun Jun 24, 2012
Commission is not standard. Usually seller(s) pays 6% commission to their agent, who'll split 50/50 with buyer's agent.

The only way that the buyer pays a commission is if the selling party communicates to the buying party that a commission will not be payed by seller, at which point, buyer's agent and buyer have to come to an agreement that buyer will pay their agent's commission. This has to be disclosed prior to escrow.

Good luck,

Tim Soto
Investment Specialist
Truth Realty & Investments
0 votes Thank Flag Link Sun Jun 24, 2012
It is critically important to identify EXACTLY what document contains that statement and where within that document it exists.

Without this very SPECIFIC data the answer will be Yes and No.

The California real estate professionals participating on Trulia will recognize these documents and will be able to respond with authority and extrapolate for you the intent.

Best of success to you,
0 votes Thank Flag Link Sun Jun 24, 2012
In California the Buyer is not responsible for any part of the Sales Commission unless by written agreement.
0 votes Thank Flag Link Sun Jun 24, 2012
Is the clause in the Buyer Representation Agreement or in the Residential Purchase Agreement? Customarily, the seller pays the commission for the selling and listing agent (between 5-6% total). If you do not trust agent, I would seek legal counsel or consult another Realtor.

Chris Chin
(805) 258-2870
0 votes Thank Flag Link Sat Jun 23, 2012
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