Home Selling in 07105>Question Details

Pete, Home Seller in Newark, NJ

How can you be sure that the seller agent only gets commission when there is a closing?

Asked by Pete, Newark, NJ Tue Dec 2, 2008

Help the community by answering this question:


I'm not sure I understand the question. By "seller" agent, do you mean the seller's agent or the SELLING (buyer's) agent? In any case, in NJ, the commission checks are dispersed at closing. Therefore, if there is no closing, there are no commissions paid to either agent.
0 votes Thank Flag Link Tue Dec 2, 2008
You can't be sure of that, particularly when a buyer agent is the most likely person to bring a qualified buyer to see your property. This is the way that Agents work together and everyone is fine with the arrangement.
The only way you could block a buyer agent from part of the commission is to keep the property from being shown by potential buyers with agents..in this market..that would be a very bad move.
1 vote Thank Flag Link Tue Dec 2, 2008
In NJ the Law states that a real estate commission transaction is only earned at closing of title.
All deposits moneys are in escrow account until the closing of title.
So no Real Estate Agent will get is commission if is no closing.
Any more questions please feel free to contact me.
Thanks and good lucky on your purchase.
E. Filipe Viegas
Realtor GRI VI
Founder for Sky Realty
0 votes Thank Flag Link Fri Jun 14, 2013
Hi Pete: You entitle yourself a "home seller." One can assume that you mean the seller's agent when you refer to the "seller agent." Unfortunately, there are two terms that have very similar names and mean the opposite. Ah! The life in the Real Estate community. A seller's agent works for the seller-Exclusively. A selling agent is the one who brings in an offer and takes it to closing. A seller's agent, when there is another person who is the actual selling agent is usually referred to as the Listing agent. So, listing and selling agent are matching terms and Seller's Agent and Buyers Agent are matching terms. The last two terms have actual standing in the laws of the state, the first two do not. A buyer's agent works for the buyer in a fiduciary relationship, the seller’s agent does the same for the seller. There is also the possibility of dual agency but that requires written permission to act that way from both the buyer and the seller and that's not what you have asked about. I'm trying to keep this under the length of War and Peace."

I note that most of the responses came from out of state. States other than NJ have different practices and procedure and indeed different laws. I believe that you should ignore most of what was said by those people, especially the one about your not having any choice in who gets paid what.

Any buyer can appoint an agent to represent his interests. The seller has NO duty to pay him anything unless he agrees to do so, either in the listing agreement or in a subsequent contract. The buyer is ultimately responsible for paying his agent but is usually quite willing to have you do so for him. Who wouldn't?

At the closing in NJ, (we don’t usually call it “closing escrow”) the agencies present their bills to the closing agent (Another person entirely, with different functions) will disburse according to the laws (taxes, etc.) according to the instructions of the mortgage companies (your old one, if any and the buyers new one, if any.) No agent should be allowed a payment that is not part of his or her contract. If you have no contract that says you have to pay there should be no payment made.

Now, the more important question and the one you haven't asked is, should you enter into contracts whereby you pay a buyer's agent or a dual agent? My advice is yes, under most circumstances, you sure should. Ask that question next and we can go through that whole prospect.

0 votes Thank Flag Link Tue Dec 2, 2008

I’m assuming you mean the following:

“I want to make sure that my listing agent only gets a commission IF we have a completed sale.”

If that is what you meant, here is the answer:

A typical listing agreement specifies that:

“Seller agrees to pay Broker as compensation for services irrespective of agency relationship (the commission or set fee) AND,
(1) If during the Listing Period, or any extension, Broker, Seller, cooperating broker or any other person procures a buyer(s) who offers to purchase the property on the above price and terms, or any price and terms acceptable to Seller. (Broker is entitled to compensation whether any escrow resulting from such offer closes during or after the expiration of the Listing Period.)
(2) If, without Broker’s prior written consent, the Property is withdrawn from sale, conveyed, leased, rented, otherwise transferred or made unmarketable by a voluntary act of Seller during the listing period or any extension.”

Normally, the only commission paid is when the property closes. However, if an agent produces a viable offer that meets the terms of the listing agreement and that offer is not accepted by the seller, then the agents involved have earned their commission, even if the property never closes. In addition, if the seller suddenly decides to take the property off the market or renders the property un-saleable, then the listing agent has earned their commission.

Be VERY careful when signing a listing agreement to ensure that you understand the terms of the agreement. While some Realtors waive their right to a commission under the above circumstances, some don’t.

Let me know if you have any additional questions.

Web Reference: http://www.carlmedford.com
0 votes Thank Flag Link Tue Dec 2, 2008
Thank you very much for your answers!
0 votes Thank Flag Link Tue Dec 2, 2008
The broker files paperwork with the title company, title company upon closing for the sale dispatches all payments to the seller, seller/buyers brokers, seller/buyers agents, any other property who is owed money including mortgage brokers and etc.
http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Tue Dec 2, 2008
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