Help deciphering buyer's agreement lingo!

Asked by Theperfectstorm79, Gate City, VA Fri Nov 15, 2013

"Broker is authorized to receive the compensation offered by the Listing Firm to a buyer's broker or paid by a seller, which compensation will be credited against the Fee due by Buyer to Broker. For the services rendered by Broker, Buyer agrees to pay Broker fee equal to 5% of the gross purchase price" So is the broker's commission included in the sale price, or is it due in cash by the buyer at closing?

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Aaron Sims, , Birmingham, AL
Sat Nov 16, 2013
We have a similar paragraph in our buyer agency agreement. If you have a question, your agent should explain it. In my agreements, I explain it as my commission will come from a seller 99% of the time. I have never taken a dime from a buyer.
Make sure your agent is communicating with you ans explaining things if you ask. Don't be afraid to ask your agent a question. We do this all the time (well, some of us) and sometimes forget that our clients maybe last bought a home 15 or 20 years ago, or this is their first. That's our job, to answer your questions, give you advice, get you the best deal possible, and attempt to give you as smooth of a transaction as possible.

Best of luck!
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Mack McCoy, Agent, Seattle, WA
Fri Nov 15, 2013
We're not attorneys, we don't practice law. Ask your broker what THEIR understanding of the contract is, and you'll be happier with the answer.

My read of this is that the broker is expecting a 5% commission. If the listing brokerage offers it, then it will be included in the sales price. If they are not, then . . . I think the difference would have to be made up at closing.

But - talk to your broker. Communication is key, and if you can't discuss this with them . . .

All the best,
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