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Paying buyer's closing costs, commission to my Realtor ?

Posted by babs77 (My Page) on
Mon, Mar 23, 09 at 17:00

I am selling an investment home in the Denver area for full asking price ($135,000) minus $4,000 toward closing costs I am picking up for the buyer. Is my REA's commission based on the full selling price ($135,000) or the selling price minus the closing costs ($131,000)?


Follow-Up Postings:

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RE: Paying buyer's closing costs, commission to my Realtor ?

Hi Babs,
Refer to your listing contract... the rascals are in dem small print details. That's the only true answer anyone here could give you.

Congrats on getting a solid buyer!
Dave Donhoff
Leverage Planner


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RE: Paying buyer's closing costs, commission to my Realtor ?

Thanks Dave. I had already looked at my contract but didn't see anything that addressed this specifically but I could be overlooking it.

We're very excited to have sold in only 3 months with the current market. Already looking at buying our next fix/flip!

Many helpful folks on this forumn! Thanks again.

Barbara


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RE: Paying buyer's closing costs, commission to my Realtor ?

In my area commission is paid on selling price unless otherwise stated.


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RE: Paying buyer's closing costs, commission to my Realtor ?

Gross selling price, unless otherwise agreed upon.


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RE: Paying buyer's closing costs, commission to my Realtor ?

Line 227 shows the TOTAL commission and lines 264/5 what the listing company offers the buyer agent out of the total.
In Denver this could mean, line 227 6% (3.2% going to listing company) and lines 264/5 2.8%.

Here is a link that might be useful: Colorado Listing Contract


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RE: Paying buyer's closing costs, commission to my Realtor ?

Thanks all. Berniek, thanks for the link. My contract looks quite different from the one in your link, but after looking at it again, under "Compensation to Brokerage Firm" I do see where is states "5.0% of the gross sales price in US dollars."

Didn't catch that earlier.


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RE: Paying buyer's closing costs, commission to my Realtor ?

"My contract looks quite different from the one in your link,.."

Interesting, the link provided is the only authorized contract to be used by an agent in Colorado, unless the agent also is an attorney and can write their own contract.


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RE: Paying buyer's closing costs, commission to my Realtor ?

Interesting yes! He is not an attorney, as far as I know. My contract is defintely different from yours. Now, not sure what to make of it. Any suggestions? Or just let it go "as is"? To be clear, I have a great relationship with my REA, but just had the initial question about how commissions work on a house you get full asking price for minus buyer's closing costs...


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RE: Paying buyer's closing costs, commission to my Realtor ?

"The printed portions of this form, except differentiated additions, have been approved by the Colorado Real Estate Commission. (LC50-10-06) (Mandatory 1-07)"

Above are the 1st 2 lines in the contract, note the word "mandatory". Ask if its a standard approved Colorado contract, if not, Id have an attorney review it and probably report the agent to here:
http://www.dora.state.co.us/Real-estate/consumer/index.htm

As to commission and closing cost, you probably pay first the commission off the sales price (ie. $135,000-5%=$128,250-$4,000 closing cost=$124,250). If you were to pay the closing cost first and than the 5%, you would save $200.
It all depends on how your listing contract and purchase contract is written.

Here is a link that might be useful: DORA Consumer Corner


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