buyers broker fee? who pays?
So we may be getting close to going to contract on a place which my broker helped me find. We never signed anything with her and she assured me from the start that her help would cost us nothing. She has been absolutely amazing and is definitely due her percentage, but how can I be…
So we may be getting close to going to contract on a place which my broker helped me find. We never signed anything with her and she assured me from the start that her help would cost us nothing. She has been absolutely amazing and is definitely due her percentage, but how can I be sure that her cut will come from the seller when the time comes to settle things? Is there any possibility she will ask me to pay it? There is a seller’s broker involved too so I assumed they would split it, but a friend got it in my head that there was a possibility she could ask me to pay her percentage depending on the property or arrangement with the seller’s broker. Set me straight on this people!
Oohlala: Your Logic makes sense but you’re slightly inaccurate. In a situation where two brokers are involved, the seller’s broker (listing agent) indeed has a fiduciary responsibility to the seller but the buyer’s broker has the same to the buyer, even though the seller pays the commission. Yes, I know – it’s byzantine but that’s the Department of State (of NY) guidelines. As for payment – lalaland, you would be surprised how clueless some RE agents are about protecting themselves. Most major RE firms in NYC belong to REBNY – a trade Assoc that has a something called a Universal Co-Brokerage Agreement: Any exclusive listing obtained by these firms must be available for co-broke within 24 hours to other REBNY firms. It’s understood that the commission paid by the seller, usually 5-6% will be split down the middle with a co-operating broker. To avoid confusion, REBNY members are only allowed to have Open Houses on their exclusive listings ONLY. As for non REBNY firms like Fillmore, Bk properties, or A&H – they usually co-broke when they want or have to. I always tell sellers – before you give a non Rebny Broker an exclusive, especially in this market, make sure they will welcome co-brokering from day 1. You want as many potential buyers as possible to get access. The last think you want is a stale listing because of their greed.
Too many opinions here…but most are correct…
Fact of the matter is the seller pays the commission. Brokers have a fiduciary responsibility to the seller to get them the best price they possbily can for the sale of their place. Logic dictates that the more they get the seller, the higher their commission is. That said, UNLESS you signed something stating that YOUR broker is working for you (in which case they get YOU the best price they can) then YOU pay a pre agreed %. All this MUST be communicated and agreed upon from the beginning so the sellers may take less from buyer but they are also paying less in commission to the listing agent because the buyer’s broker is paying the selling agent’s commission.
I don’t want to confuse things BUT the bottom line is you pay nothing to the broker
When you go to open houses, the sign in sheet always requires you to identify whether you’re working with a broker. If you’re not, you sign a statement saying that you’ll work exclusively with the listing broker in terms of that property. Often times if you’re working with a broker they want you to attend open houses with the broker. You sometimes see “Brokers Welcome” or very rarely “FSBO NO BROKERS”. There’s some kind of standard formula for working out the commission which you don’t need to worry about. If your broker was taking you to one of those “No Broker” places, they need to tell you before hand that if you buy the property, you have to pay them.
A word to the wise though, whoever pays the piper calls the tune. So if the broker is splitting the seller’s commission, it’s in their personal financial interest for the price to be higher rather than lower, however there are ethical rules for brokers (no don’t laugh it’s true) and they could get into serious trouble for swindling you.
The information you received is completely wrong.
The SELLER will pay THEIR broker the full commission they arranged, which is usually 5-6%. And then the SELLER’s BROKER will split this commission (in whatever co-broke percentage was arranged) with YOUR BROKER. The buyer does not pay anything at all. Brokers split the commission (paid by the seller) amongst themselves.
No broker with a clue would ever not check to see if the seller’s broker will cobroke, and likewise would not act as a buyer’s broker without getting a contract stating that he/she is acting as a buyer’s broker. Don’t worry – your broker will be paid by the seller.
Your broker will split the commission with the seller’s broker. The seller will pay the commission. If the seller’s listing agency is one that will not split a commission then your buyer’s broker is just out of luck. He’she will certainly know who those brokers are or what the situation is in the case of this particular home.
Oops, I miss read the OP, I thought they were referring to a buyer broker situation.
Bkynlocal, I have no idea where you got that information, it’s way off base. In New York Yanks21, assuming the Seller’s broker was the exclusive agent, you should pay nothing. Your Broker should get paid by a seller’s commission split between the two brokers. In the case that your broker took you to an open listing or a FSBO, it’s her responsibility to find out who pays before hand. If you’re concerned, just to be nice, you should ask before going into contract for her sake, not yours. As she never signed on to be your exclusive “buyer’s broker” she doesn’t have a leg to stand on to oblige you to pay.
As a buyer, I’ve never been asked to pay a brokers fee-even when my broker is not the listing agent. The brokers split the fee, which is paid by the seller.