Non-MLS deal, who pays broker commission?

Question

So, I'm purchasing a property from another investor off market, and the agent is representing both sides of the deal. He had a seller who needed a buyer for his property and I came in as a buyer needing a property. Before we went under contract he sent me a Compensation Agreement to sign saying that I would pay commission on the transaction.

I'm a newbie, to be fair, but I've never heard of a seller paying commission and I've talked to an experienced Real Estate Agent who said in 10 years she's never had a buyer pay commission.

I don't want to offend my agent (who currently manages one of my rental properties), but I feel like this isn't standard. Should I walk away? Should I pay it to maintain the good working relationship? Am I getting the wool pulled over my eyes or just not understanding how the process works?

Russell Brazil · Answer

In my off market and commercial deals, my client, whoever they are, buyer or seller pay my commission.

Ben Scott · Answer

I've had my buyers pay a commission when I've brought them a deal off-market. It almost functions like an assignment fee. I have the buyer sign a compensation agreement and that fee is part of their settlement statement.

Yoon Chong · Answer

This is the right answer.

Dawn Brenengen · Answer

In off market properties I brought my clients, my buyers have usually paid the commission. Since it's not listed in MLS, the seller has not offered any compensation to buyers' agents right off the bat. So, the buyer pays it as a closing cost or the sales price is increased to include it.

Eliott Elias · Answer

Sellers always pay the commission. Shouldn't affect you.

Tyson Hosey · Answer

@Johnathan Boyle Account Closed

Thanks for the responses so far. Its good to know that there's a good reason I'm in between on this. I want to keep the relationship by making sure the agent gets paid, but not pay for something that the seller should be paying. But I don't know the rules or what is standard.

Account Closed · Answer

This is more of psychology question than a financial one. What difference does it make who pays the agent? Just consider the bottom line.

Wayne Brooks · Answer

I've done it that way, doesn't matter who pays on a cash deal, just add it in as part of cost, figure the net the same way . In a financed deal, the buyer usually doesn't want to spend the extra cash out of pocket.

Non-MLS deal, who pays broker commission?

Non-MLS deal, who pays broker commission?

Most Popular Reply

9 Replies