Quote:
Originally Posted by OrangeBlossomBaby
They are always responsible to pay the commission. The cost of the commission is built into the sales price, therefore it is always the buyer who ends up paying it.
If the homeowner needs to clear $100,000, and their agent requires a 5% commission, then the homeowner needs to get a minimum $105,000 sales price. The buyer pays that $105,000 - the homeowner keeps the $100k and the extra $5k goes into the agent's pocket. OR it gets split between the agent and the buyer's agent, if they have one.
The decision on who gets the $5000 is between the listing agent and the buyer's agent, if there is one. They duke it out amongst themselves, but it's the buyer who's footing the bill only because it's built into the price they pay for the privilege of buying that house.
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Now that is semantics. Legally, the entire commission is paid by the seller. Just read the settlement statement where the commission is listed on the seller's side of the statement. Whatever money changes hands between the brokers is a private agreement between them. Under contract law, the buyer could never sue the broker to get back a commission because he never paid a commission.