WHO PAYS THE BUYER AGENT COMMISSION?

Florida Buyer Broker

Who pays the buyer agent commission?

In Florida,  the seller’s listing broker agrees to pay the buyer agent commission from a portion of the commission paid by the Seller to the listing broker.  The buyer agent commission is available for buyers to see on many 3rd party listing platforms.  Commission may be negotiated up to the time of entering into a purchase contract with the seller. 

Why does the seller pay the buyer broker commission?

The reason the seller pays the buyer broker is because most banks and lenders do not allow the buyer broker commission to be financed into the price of the home.  They DO allow the seller’s broker commission to be included into the listing price of the home. The sellers’ listing agent then shares their commission with a buyer broker at closing. 

Click here for information from the National Association of REALTORS about real estate commissions.

Who pays the buyer agent commission when there is a For Sale by Owner?

Most for sale by owners have a set amount in their asking price which includes the buyer agent commission.  Although, they are selling on their own, they realize a buyer broker may bring them the buyer and close the sale.  They do not want to compensate a listing broker commission or to have their property listed in the REALTOR® MLS. 

Most for sale by owners or listing brokers offer a real estate commission to buyer brokers when the buyer broker has a qualified buyer interested in their property or listing.  In that case, the buyer broker ask the seller if they have a commission already built into their asking price or if they will pay the buyer broker commission.  This is done with the buyer’s consent and the commission amount is negotiable between all parties involved in the transaction.  The buyer broker represents the buyer and may also guide the seller thru their responsibilities in the closing process when there is no listing agent. 

For sale by owners who are real estate agents, selling their own property, typically offer to pay buyer agent commissions, on the buyers behalf.   

Buyer beware,  often when the Seller or the Seller’s agent does not want a broker involved, it is usually because they are trying to hide a defect  or deceiving the buyer in some way.  They know a professional broker will uncover the defect or deception.  

Who pays the buyer agent commission when the buyer wants a new home?

Builders also pay the buyer agent commission.  Buyer brokers often take  buyers to new developments and help buyers with a new home purchases. Buyers do not get a better deal by going directly to the builder without an agent. The builder’s contract has clauses that cover the buyer broker’s compensation.

What if a buyer see a property with one agent and wants to buy the property with a different agent?

If  a buyer  wants to purchase a property they have already seen with another broker or agent, they may create problems for the brokers regarding who is entitled to compensation.  Even if the buyer pays the buyer brokers commission, a Buyer Broker Agreement does not prevent procuring cause, disputes between brokers.  It only makes them worse. 

If another broker claims to have shown the property to the buyer at an open house, as an example, and says they are the procuring cause of the sale, the open house broker can claim the commission received by the buyer broker paid by the buyer.   

Why, because REALTOR® ethics say so.  And the commission for buyers side of the transaction was paid by the buyer to the buyer broker not by the seller or the seller’s listing agent. 

There is no requirement for the seller’s broker to reduce their commission from the seller because the buyer paid the commission for the buyer broker.  And they do not have to be involved in a commission dispute between the open house broker and the buyer broker.

 What a mess!

However, it is important to note, when the Seller or the Seller’s agent do not want a buyer broker involved, it is because they are trying to hide a defect  or deceive the buyer in some way.  They know a professional buyer broker will uncover the defect or deception.  

Florida Buyer Broker offers buyer ONLY services to buyers who sign a written disclosure. This DISCLOSURE is NOT a Buyer Broker Agreement or Contract.  It is required by Florida law for buyer brokers and their agents. You can read the disclosure page here: https://floridabuyerbroker.com/single-agent.

Florida Buyer Broker, Beverly Howe counsels buyers on the best practices to buy Florida real estate.

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