General Question

theladebug's avatar

Do Real Estate Agents charge commission on seller paid closing costs?

Asked by theladebug (217points) October 4th, 2010

I was wondering if its standard practice for a seller to pay real estate commissions on the amount paid for buyers closing costs that is built into the sales price.

I was an escrow officer ages ago and I dont remember this being standard practice, however I have a real estate agent which has built $6000 into the price of the sale of my home for buyers closing cost and has calculated his commission based upon the sales price + this $6000

Any idea if this is the standard practice?

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8 Answers

CyanoticWasp's avatar

My limited understanding is that the seller pays the real estate commission, and if there’s a “buyer’s broker” involved, then the selling agent and buyer’s agent split the commission. If your agent is planning to take another $6000 of your sales price, on top of the seller’s commission, to use as payment for the buyer’s broker, then you’re being shafted.

Otherwise, if he’s just increasing the asking price for your house—and can perform the sale—well, you’ll share in the increase, so that’s not a bad thing at all.

theladebug's avatar

Basically it is not either one. Its essentially increasing the sales price by $6000 to give that to the buyers for repairs, etc. As of now there is not a contract on this property so its just in the listing phase, but in my previous experience this money that was exchanging hands for repairs was not included in the sales price on which commissions were paid on.

For example, the property sold for $176000 where $6000 was going directly to the buyer for repairs… the commission was based on only the $170,000 portion.

Confusing, I know, but I just want to know if this practice has changed these days?

JLeslie's avatar

If it is written up as a higher sales price, then yes, the realtor would get commission on it.

JLeslie's avatar

Why are you writing it up as a higher sales price? Why is it not being listed as costs on your side of the HUD?

Judi's avatar

Everything is negotiable. If you tell the agent that you won’t give them the listing with the extra costs I am sure they will remove them as soon as you open the Real Estate secton of your phone book.

JLeslie's avatar

Actually, @Judi makes a valid point. I was under the impression the OP was already at the point of writing up a sales contract, but if the OP is at the point of simply writing up a listing agreement you can agree on and write up how much the commission will however you negotiate it.

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