Commission on closing help

15 years ago

A coworker is interviewing agents to arrange a listing contract, and the two agents she has met with so far insist that the commission must be based on the gross sales price, without taking into account money given to the buyer.

So if someone buys a house for $400K and gets $10K in closing help (or renovation allowance, or whatever), the sale is really $390K. Why shouldn't the commission be based on $390?

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Comments (7)

sylviatexas1
15 years ago
She might suggest to the agents that they confer with their broker.

Excluding seller contributions from gross sales price when figuring commission isn't unheard of.
jlpcarter
15 years ago
This is the standard commission clause from our state listing agreements. It gives opions on how the seller is charged. 99% of the time it is option 1, which is a % of the selling price, before any consessions. Of course this can vary by state or even broker to broker.

6. Commission.
A. In the event that during the term of this Agreement Broker procures a buyer ready, willing, and able to purchase Property at the price
described above or any other price acceptable to Seller; or Seller enters into a contract for the sale or exchange of Property with any
buyer, whether through the efforts of Broker or any other person, including Seller, Seller agrees to pay Broker at closing the following
commission: [Select one or more of the following sections below. The sections not marked shall not be a part of this Agreement.]:
_________________________________ percent (%) of the sales price;
$________________________________________________________;
(Other)___________________________________________________.
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terezosa / terriks
15 years ago
Although the standard commission is agreed to in the listing contract, that does not mean that it cannot be amended in order to make a sale. I find that many agents will agree to waive the commission on seller concessions.
ncrealestateguy
15 years ago
A 6% commission on $7500 is only $450.
Hire the agent that you feel most comfortable with as far as being trustworty. The better agent will save you a 100 times more than the $450.
folkvictorian
15 years ago
Your friend should not have to pay commission on money that she's not receiving from the buyer. She not only needs to find a trustworthy agent, but one who's not greedy, as well.
ncrealestateguy
15 years ago
Everything is negotiable... If you do not like what one agent tells you, move on to the next.
If I was at a listing presentation and this came up, I would probably not push back too hard. I'd rather make something than nothing.
sylviatexas1
15 years ago
Many corporate sellers (banks, relo companies, mortgage companies) have already nipped this problem in the bud by building it into their contracts that they pay commission on the adjusted sale price.

I never have felt like I was entitled to a fee on money that the seller is not getting, that appears to be part of the sale price simply because the buyer has structured the contract to reduce his out-of-pocket expense ("seller pays closing" really means "buyer is building closing into purchase price").