Buyers Agent commission on Wholesale transaction

8 Replies

Hey Everyone,

I currently have a client that is trying to purchase a property that is under contract with a wholesaler. What I’m wondering is how is my commission paid? Does the technical owner still pay it or does the wholesaler pay it at closing?

It just depends on how the wholesaler setup the deal. 

If he’s assigning it, it’s going to come from the original seller’s proceeds. If he’s doing a double close or using transactional funding then your commission would be paid by the wholesaler.

I go into every property knowing it's going to take me around 9% to sell it. So, in my case I purchase the property from the seller and, in most cases, I pay ALL fees. Then the end buyer's agent receives the 3% commission from the 6% I paid my listing agent. But, then this known as "wholetaling".

Oh and congrats on the deal! And to your client for getting a property at, what I’m assuming, is a good price.

@Ryan Beasley Did your Buyer find this property on their own? and then ask you to represent? Or, did you lead them to a wholesale deal? I would not be writing up an off-market offer unless I knew where my compensation was coming from! If you are going to deal in off-market (non-MLS) properties via wholesalers or FSBO, you need a different strategy AND to get AHEAD of it, or you will find yourself frustrated and broke. I suggest you get with your Managing Broker asap to discuss some approaches/strategies for getting paid for off-market deals, you can structure it however you want.

Doing a deal now with an agent. The agent wrote into the Purchase and Sale Agreement under the Special Stipulations: All parties agree seller shall pay selling broker commission of $_______ at closing.

Hope this helps