I'm So Confused!!! Not really,Just Some What. - Posted by Kevin

Posted by SCook85 on March 13, 2000 at 17:52:22:

Both the buyer and seller will be responsible for their share of the closing costs. The sellers closing costs usually include the realtors comission. The buyer usually pays for attorneys fees, and anything associated with financing- unless of course the parties agree to somtething different.

Since I now know that you are in Baltimore you should know that our transfer taxes are one of the highest in the country, therefore it is customary to split them between buyer and seller. On occasion I agree to pay them all to get a deal, but prefer not to, they can add up.


I’m So Confused!!! Not really,Just Some What. - Posted by Kevin

Posted by Kevin on March 13, 2000 at 08:25:52:

I need some clarification on who pays the agent/brokers commissions on a sale? The buyer or the seller, whats the norm? And what are closing costs?
I can feel your eyes starting too role!
Oh well, Ya gota start somewhere, and asking dumb questions
is a good place to start!
Thank You to all who respond to this post.

Re: I’m So Confused!!! Not really,Just Some What. - Posted by SCook85

Posted by SCook85 on March 13, 2000 at 09:07:22:

You will get varying answers to this question. Here is why.

Since the buyer is the one bringing the money to the table people like to say that the buyer pays it, but I don’t see it that way. The agreement is between the seller and the agent, not you and the agent. You offer what works for you on a home. The seller is the one who has to evaluate the offer and determine if they want to accept it knowing what it is going to cost them to have the realtor(s) do the deal. If they accept your offer they agree to pay the realtors out of the proceeds they receive from you.

So to answer your question, the Seller pays- You do not have to worry about it when you present your offers. I have made numerous offers and never once did I have anything to do with the comission.

Happy Investing!


Other thoughts and YOUR input on a technique requested? - Posted by Michael Morrongiello

Posted by Michael Morrongiello on March 13, 2000 at 11:16:53:

Sometimes when you work with a realtor to assist you on locating investment properties you can have what is known as a “Buyers broker” realtionship.

When an offer is presented to a seller by your buyers broker they will share in the commission split associated with the sale

You can also set up an arrangement with a “Buyers Broker” where you as the buyer agree to pay them a fee.

I have also known several RE investors that openly advertise that they will pay a “BONUS” fee to be paid either as an additional incentive to the Realtor or ON TOP of their normal commission . This could be anywhere from $1,000 -$5,000 extra to the Realtor.

This incentive fee is to make sure they keep you in mind and bring you property investment opportunities first.

Have others on this board use this technique as a method to “incentivise” realtors to bring you the deals first? Would love to hear your feedback?

Michael Morrongiello

Re: I’m So Confused!!! Not really,Just Some What. - Posted by Kevin

Posted by Kevin on March 13, 2000 at 10:56:52:

Thanks Steve,
what about the closing costs? are they one in the same
with the agents comm. or totality different?

Re: Other thoughts and YOUR input on a technique requested? - Posted by MilNC

Posted by MilNC on March 14, 2000 at 17:28:12:

Now I’M confused!

My understanding is as follows:
“Buyer’s broker” means that the buyer pays a commission to the broker/agent of his choice, and this establishes a fiduciary relationship of that agent to the buyer.

What used to be referred to as the “buyer’s agent”,
referred to an agent selected by the buyer to look for houses, who would receive a split of the listing agent’s commission which was established in the listing agreement to be paid to the listing agent by the seller, and which therefore had established a fiduciary relationship of the
listing agent to the seller. Since the buyer’s agent
shared in the commission paid to the listing agent
by the seller, then he was working for, being paid by the seller, and shared in the same fiduciary relationship.

Are the investors advertising that they will pay a “bonus” “On top of” What? their “normal commission”…paid by whom? By the seller? then that is a conflict of interest.

By the buyer? then I would think that it would
be just a higher amount than the regular buyer’s
payment of commission to the agent working for them, the buyer’s broker, a higher percentage. That’s probably what you meant,
it was just unclear at first glance.

Sounds good though. I like it. Do you think this might
cure some of those issues that have come up with realtors asking upfront commission money or for funds to be escrowed before an
offer is made? (which was answered, I think by JPiper,
as a breach of escrow balancing rules).

I like this idea anyway, because the buyer’s broker
agreement is a contract, and does give an incentive.
It doesn’t tie up the buyer’s cash,but guarantees
(I think) the agent’s getting paid if deal closes.

OR, is it just better to have a flat fee bonus, so that the
buyer’s broker has no incentive to want a higher
sales price? Hmmm --that sounds better.

I think one would have to know their state’s law on
buyer’s brokers.

Very interesting. I hope you’ll re-post if this ages
off the board-it has been really busy the past few