Quote:
Originally Posted by Sweatman
Say I walk into an open house and I’m not signed with a buyers agent, make an offer representing myself… is the only commission due on the (accepted) offer paid by the seller based on their agreement with their listing agent?
|
Yes. Prior to the FTC ruling, a seller agreed to a percentage of the sales price of the home due their agent (brokerage) upon closing. What many people don’t realize is that the seller’s agent had a side deal with the buyer agent, if a buyer was working with a realtor. The seller doesn’t see this arrangement on the documents they sign for representation. However, the MLS has a form that only the realtors have access to which discloses what the selling agent will pay the buyer’s agent if they bring a buyer and close the deal. We, as sellers, never see this.
Example: 5% commission on $600,000 home. Seller’s agent/brokerage receives $30,000 from seller at closing. The deal the seller’s agent made with the buyers agent may be 50% (could be less) of the $30,000 commission that the SELLER paid. So, yes, the seller paid both commissions. They just don’t realize it. This ruling is designed to prevent this such that each party pays their own agent’s fees.
If the buyer doesn’t engage the services of a realtor then the seller’s agent pockets the full fee. So, instead of agreeing to 5-6% you can now offer 2 1/2 - 3% to the listing agent and let the buyer decide if they want representation.
A previous post was spot-on. A buyer may ask a seller to pay their buyer fees but the seller can decline which may decrease the pool of offers.