Home Buying in Staten Island>Question Details

Jose, Home Buyer in Staten Island, NY

When a home is a foreclosure or bank owned, who pays for the real estate agent commission?

Asked by Jose, Staten Island, NY Tue Jan 13, 2009

Does the buyer needs to compensate the agent in some way?

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When a home is a foreclosure or bank owned property the bank becomes the seller. The seller/bank will define compensation for the listing agent and buying agent when contracting with a firm to place the property on the market for sale.

I am a buyer's broker and when I enter into a buyer's brokerage agreement with my clients there is a clause in the contracts that I use which basically states in sum and substance that (a) the buyer and broker agree to the commission set forth in the contract, (b) that the commission may be added to the purchase price, (c) the commission may be paid on behalf of the buyer IF THE SELLER AGREES.

However, it is very important to note that when one enters into a contract the buyers are ultimately responsible for the payment they agree to pay the broker. Most buyer broker representatives make arrangements with the sellers for payment, or a percentage of payment which helps reduce what the buyer owes at closing.

Bottom line: every commission is negotiable. We, as cooperating Realtors look for win-win situations that will help smooth the transaction to completion. I use buyer's brokers agreements most of the time. My business model is 70% buyers, 15% listing and 15% rentals. If you have any other questions regarding buyers brokerage agreements, please feel free to contact me or any other member in the forum who routinely uses those types of contracts. I happen to enjoy representing the interests of the buyers probably just as mush as listing agents enjoy representing the interests of the sellers. The buyers broker agreement makes you a client instead of a customer walking in off of the street. I am going to quote the state:

Buyer's Agent negotiates "...the purchase of a home at a price and on
terms acceptable to the buyer. A buyer’s agent has, without
limitation, the following fiduciary duties to the buyer:
reasonable care, undivided loyalty, confidentiality, full
disclosure, obedience and duty to account. A buyer’s agent
does not represent the interest of the seller. The obligations
of a buyer’s agent are also subject to any specific provisions
set forth in an agreement between the agent and the buyer.
In dealings with the seller, a buyer’s agent should (a) exercise
reasonable skill and care in performance of the agent’s
duties; (b) deal honestly, fairly and in good faith; and (c)
disclose all facts known to the agent materially affecting the
buyer’s ability and/or willingness to perform a contract to
acquire seller’s property that are not inconsistent with the
agent’s fiduciary duties to the buyer."

Here is a link to the state department PDF explaining agency that I believe you may find very useful. We are required by law to use this form.

http://www.dos.state.ny.us/LCNS/pdfs/1736.pdf


Wishing you the very best with your home buying. Regards, Carolyn
Web Reference: http://www.TannStarr.com
1 vote Thank Flag Link Sun Jan 18, 2009
Hi Jose,

When the bank offers to compensate the broker , the listing agent posts it in the MLS listing , it will be clearly spelled out in the listing how much the agent will be compensated. If you are working with your agent with a buyer agent contract and have agreed to buyer agency,you will need to abide to the terms set forth in that contract as far as compensation and how it is paid to that agent. Unless you and the agent have agreed otherwise, by making changes to the contract.

In all of the bank owned properties I have sold in the past , the bank has required that the purchaser pay the Doc. Stamps which is a state tax, and the transfer fee which is a City tax.

The Best of good luck to you
Arlene Trunzo, Board Certified Real Estate Broker
1 vote Thank Flag Link Wed Jan 14, 2009
Typically, the bank pays the commission.
Web Reference: http://www.RemoRealty.com
1 vote Thank Flag Link Wed Jan 14, 2009
Hi Jose,
When purchasing a foreclosure, the bank pays the real estate commission. Some banks will help the buyer with their prepaids and closing cost! Hope this helpful.
1 vote Thank Flag Link Wed Jan 14, 2009
no - the buyer does not need to compensate the agent - unless they have an agreement of some kind. the commission is in the deal.
1 vote Thank Flag Link Wed Jan 14, 2009
the bank...more info on short sales can be found below....
1 vote Thank Flag Link Tue Jan 13, 2009
The Hagley G…, Real Estate Pro in Pleasanton, CA
MVP'08
Contact
Typically, the bank pays the real estate commision.
1 vote Thank Flag Link Tue Jan 13, 2009
Jose,
The seller is always responsible for paying the fee for professional services. In this case, the bank does the honors.
1 vote Thank Flag Link Tue Jan 13, 2009
Hi Jose,
When purchasing a foreclosure, the bank pays the real estate commission. The buyer is not responsible for that, however, the buyer is usually required to pay the seller's end of the closing cost as well as the buyer's closing costs. No need to compensate the agent because they are being compensated by the bank for selling their property.
Rosemarie Rivicci
Appleseed Realty GMAC Real Estate
Hylan Blvd
Staten Island, NY 10312
917-846-5795
1 vote Thank Flag Link Tue Jan 13, 2009
The seller (bank) does. The only time a buyer would be required to compensate the buyer's agent is if the had an agreement in writing to be compensated a minimum amount. Most agents never ask their buyer to do this.
1 vote Thank Flag Link Tue Jan 13, 2009
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