Home Selling in 07871>Question Details

Concerned Se…, Home Seller in 07871

We 're negotiating a credit to buyer at closing (per Inspection). Is Broker's commission based on original contract price or the?

Asked by Concerned Seller, 07871 Tue Apr 12, 2011

'new' price? Doesn't this new negotiation in effect change our selling price?

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12
Jeanne Feenick’s answer
Talk to you attorney - I have a deal that will soon close that involved a seller's concession upfront, and then a further concession to cover the inspection credit. I represent the seller. From the get go I made sure that the commission would be based on the proceeds to the seller, net of the concession. The seller was most appreciative, and the HUD closing statement will reflect that agreement.

Good question - talk to you attorney and agent pronto.

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
1 vote Thank Flag Link Wed Apr 13, 2011
Unless otherwise specified, the commission is based on the final closing price.
Web Reference: http://www.321property.com
1 vote Thank Flag Link Tue Apr 12, 2011
Hi there, agree, you should not be paying commission on the credit. This would also be true if there is a seller's concession towards closing costs. My opinion is that the seller should pay commission on the sale price of the house, net of either of those. But be sure that it is confirmed in writing by your attorney and agent.

Best.
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Thu Jul 14, 2011
Sale price is what it sold for, the credit is not part of the price it is you giving the buyer something to compensate for what they are paying you for the home. Example, if you are selling the home for $225,000 and the Home Inspection said you needed a new roof, Water Heater and AC Unit, you agree with the seller to give them a credit or a concession of $25 to satisfy those needs then that does not affect the sale and don't worry the Title company or other agent doing the closing will know these rules too so they will still withdraw the proper commission for the broker or brokers involved!
0 votes Thank Flag Link Wed Jul 13, 2011
The broker's commission is legally based upon the GROSS actual sales price agreed to by buyer and seller.
There are dozens of expenses a seller will incur selling a home, and they are the seller's responsibility. You may, however, be able to negotiate with your agent if the repair is unusally large and the sale is dependent on it.
0 votes Thank Flag Link Wed Jul 13, 2011
Concerned Seller,

The commission is paid upon the sales contract price that was agreed to and signed by both buyer(s) and seller(s) regardless if any credits are given for inspection issues. It may be confusing but even though credits are given - the sales price of the house isn't changing. If the original price you agreed upon is $300,000 and even if you give a roof credit of $1800 - the sales price is still $300,000. I guess i can see where the confusion comes into play but the sales price isn't really effected by a credit for repairs and the commission (unless otherwise agreed to by all parties) is paid on the signed sales contract.

Gina Chirico, Sales Associate
Lattimer Realty
973-715-1158 cel
973-575-6353 ext 17 office
Gina@GinaChiricoRealEstate.com
0 votes Thank Flag Link Tue Apr 12, 2011
It depends on the contract and the attorneys' revisions to the contract. I've seen it done both ways.
0 votes Thank Flag Link Tue Apr 12, 2011
Commission is based on contract sales price regardless of if you give a credit for repairs OR do the repairs yourself (in reality doing the repairs and laying cash out of pocket lowers your
0 votes Thank Flag Link Tue Apr 12, 2011
It depends on how your listing agreement is written. In most case sit is the final selling price at closing. Some will wrote in sales price less any concessions to teh buyers such as if it is a sale price of $200,000 and you are giving back $10,000 you only pay commission on the $190k. However if you did not have this clause in yoru listing agreement, you will be paying commission based on 200k as that is the sales price. good luck with your sale
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Tue Apr 12, 2011
If the contract can be changed to reflect the credit you will pay a few dollars less on the commission(possibly transfer tax as well).
0 votes Thank Flag Link Tue Apr 12, 2011
credit to the buyer won't change the selling price and commissions. lowering the selling price by the same amount will impact commissions, though
0 votes Thank Flag Link Tue Apr 12, 2011
The commission is normally based on the selling price.
Best,
Diana
0 votes Thank Flag Link Tue Apr 12, 2011
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