3 agent commission split?

2 Replies

I totally hijacked some poor guys post, so I want to get some fresh opinions on this.

So I have a HUD deal I'm wholesaling, an agent brings her client to the deal wanting 5k that the buyer has agreed to pay ( her commission at 3% would have been $4500).

What is best legal, most ethical way to structure this. What documents or wording in the contract should be included?

I answered this on the original thread, but I think this is the way it would usually work:

There are two transactions, right? HUD to you, you to the end buyer.

On the first transaction, HUD listing agent gets 3% and your agent gets 3%.

On the second, your agent gets 3% and the buyers agent gets 3%.

Unless you come to a different arrangement with your agent, since I gather he never actually listed the house?

You should also be aware that in my state, that sale is two transfers, and therefore transfer tax is due twice. I don't know about your state obviously.

If her buyer agreed to pay the $5k, then let him pay it, to your agent's broker, on the HUD. This assumes she's collecting her fee "as an agent". If she wants it direct, then she'd be a "partner" with you, and you'd raise your price $5k, pay her $5k for her "split". She could be running into some legal issues that way, but that's her problem, if she's trying to side step her broker.