Agent Fee Agreement: Fill & Download for Free

The legal documentation of the property transfer occurs, and the property is pledged as collateral for any mortgage loan made at that time. The property then gets "recorded" usually in the jurisdiction's county registry of deeds to make the transaction complete.Today, LOTS of paperwork is involved. Most closings involving financing today can easily have 100 to 150 pages of documentation, with various disclosures, affirmations, agreements of understanding and actual closing documents relative to the transaction amount. These are some of the transactional costs, and they are substantial, especially when adding in the real estate agent fees. :-)

Who pays the buyer agent fees?Usually, though not always, the seller pays them.Here’s how it usually works: The seller signs a listing agreement with the listing agent (who represents the seller). The seller agrees on the total commission to be paid (let’s say, hypothetically, it’s 6%). The seller and listing agent also agree on how the commission is going to be split. Usually, its split equally between the two agents. In this case, it’d be 3% for the listing agent and 3% for the buyer’s agent. (If the agreed-upon commission were 5%, it could be 2.5% for each. Or it could be something else, such as 3% for the buyer’s agent and 2% for the listing agent.)Now, let’s consider the buyer. Usually, the buyer will sign an agreement with the buyer’s agent. As with all commissions, the buyer’s agent’s commission is negotiable. But frequently it’ll say something like (and this is not the formal language): “The buyer’s agent will receive a 3% commission. The buyer’s agent will look first to the listing agent for his/her 3% commission. However, if the commission for the buyer’s agent is less than 3%, the buyer agrees to make up the difference.” In other words, technically, if the buyer agreed to pay a 3% commission but the listing agreement only provided a 2% commission to the buyer’s agent, the buyer’s agent would look to the buyer for the remaining 1%.Further, you can run into issues when a buyer’s agent is dealing with a FSBO—”For Sale by Owner.” The buyer’s agent will try to get the seller to pay the 3% commission. Often, the seller will. Sometimes the seller won’t. When the seller won’t, the buyer’s agreement would make the buyer responsible for paying the buyer’s agent the commission.So, the answer is: Usually the money comes from the commission paid by the seller. But not always.

The first choice should be to find a great Realtor local to that market and work out a referral fee agreement with that agent, and have that agent service the client.