When selling an apartment, who pays the re altor, the seller or the buyer?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Real estate transactions require certain knowledge. This is why most sellers and buyers in this market turn to professional re altors. However, this situation raises another question. Who should pay for the services of a re altor related to transaction support? Whose duty is this? Seller or buyer? Let's find out.

What's the question?

Real estate transactions have an important feature. There are two parties involved, namely the seller and the buyer. In fact, each of them uses the services of a re altor. However, when it comes to payment, they believe that the remuneration of a specialist is the responsibility of the opposite side. Real estate transactions are not cheap, so it is not surprising that each side seeks to throw off such a burden of financial responsibility.

However, the re altor may turn out to be the injured party,left unrewarded. How to behave as a specialist accompanying a real estate transaction? From whom to demand payment for services?

The situation can get ambiguous. Buyers believe that the seller should pay the re altor, because it was he who was helped to sell the property and make a profit. However, the seller may have the opposite view. He believes that the re altor helped the buyer in finding suitable properties. Accordingly, the buyer must also pay for the services rendered.

This argument could go on forever. However, it also has a third point of view, which belongs to the re altors themselves. They would not refuse to receive a commission from each side separately. In fact, this is a double payment for services. However, few specialists in the real estate market manage to pull off such a trick. Usually professional re altors do not voice such plans, but if the opportunity to realize them turns up, they will certainly not miss their chance.

Who pays the seller or the buyer to the re altor?

This is such a controversial issue that sometimes it causes difficulties even for the experts themselves. It also suggests that there is no universal answer. Much depends on the initial conditions. However, there are always two options for who pays the re altor: the seller or the buyer. Let's talk about each of them in more detail.

Seller

How does such a scenario develop? The real estate seller contacts the agency and concludes an appropriate contract. According to his terms, the re altoris obliged to find a buyer for the specified cost of the object. At the same stage, the cost of services is discussed. It must also be fixed in the contract.

If a potential seller does not agree with the conditions that the re altor calls, he can refuse the transaction. Perhaps he will decide that the amount of the fee does not correspond to the number and complexity of the work performed.

In fact, the seller has two options. Look for a buyer on your own and take the full cost of the object. Or shift this responsibility to the re altor and share with him your own income from the sale. Which option is preferable, each seller or buyer decides independently. Who pays the re altor, you now know.

Customer

In this scenario, the scenario is similar to the previous one. With the difference that the agency is contacted not by the seller, but by the buyer of real estate. It is he who concludes an agreement, according to which the re altor must select objects that correspond to the amount that the client has. At the same time, he can refuse professional services and act independently, negotiating with potential real estate sellers.

So who pays the re altor? Seller or buyer? In fact, this duty falls on the one who concludes an agreement with the agency. It is also important to understand that under its terms, the seller or buyer has the right to receive services in the agreed amount. At the same time, the re altor does not bear any obligations to the other party participating in the transaction. itimportant to understand when making any real estate transactions.

Possible options

It would seem that everything is obvious, and it became clear to everyone who pays the re altor: the seller or the buyer of the apartment. This would be exactly the case, if not for some nuances. Let's discuss the options and the corresponding scenarios.

• General re altor. In this situation, the same professional acts, representing the interests of both parties, that is, in this case, the seller and the buyer of real estate at the same time. In fact, the re altor receives the greatest benefits. In just one transaction, he receives double reward. However, it is very difficult to implement it, since it is necessary to find an ideal compromise between the seller and the buyer of real estate, without prejudice to the interests of either side. Perhaps, to perform such a task, you need to be an experienced professional.
• Different re altors. In this case, each party has its own representative. Who should pay the re altor: the buyer or the seller? In this case, everything is relatively simple. Each party interested in a real estate transaction pays a fee to the re altor with whom it previously signed an agreement on the provision of relevant services.
• One re altor. In this case, either the seller or the buyer has a representative. Therefore, the specialist has to work for two to bring the deal to completion. Does the buyer have to pay the seller's re altor? Usually, specialists charge a fee from the one who ordered the service. Accordingly, if the seller contacted the real estate agency, the buyerdoes not have to pay commissions to his re altor.

We do not discuss the situation in which both parties to the transaction do not have a representative. Such agreements do not imply the involvement of a re altor, therefore, no one has the obligation to pay for the services of a specialist in supporting real estate transactions.

Controversies

The answer to the question: “Who pays interest to the re altor: the buyer or the seller?” Is obvious and already known to you. However, despite this, there are many disagreements. Why is this happening?

• If the service was provided to someone who did not order it. Suppose a seller lists his property on a specialized site. He is found by a re altor and offers to bring a buyer. After the transaction is concluded, the re altor issues the corresponding invoice to the seller.
• If a re altor is hired by one party and the other does not have a representative, the transaction manager can bill both the seller and the buyer. It shouldn't be. Services are paid by the party that hired the professional. Based on this, it becomes clear whether the buyer of the apartment pays the seller's re altor.

To avoid conflicting situations, it is better to discuss the terms and amount of payment in advance. This will moderate the appetite of a too arrogant re altor. It is also not necessary to hush up questions of payment. This conversation will take place sooner or later anyway. But the longer it is delayed, the more confusing and intractable the situation becomes.

Re altor's liability

First of all, the task of this specialist is to provide the client with as much information as possible on various points. For example:

• about real estate;
• transaction procedure;
• payment terms (especially relevant for those who use borrowed funds, maternity capital, etc.).

Re altor's liability does not apply to cases of violation of the terms of the transaction by its parties, that is, the seller or buyer.

All people make mistakes. Re altors are no exception. If the mistake of this specialist led to an increase in the terms of the transfer of the property, the need to correct errors in the documents, and so on, the client has the right to demand a reduction in the re altor's remuneration.

When is the payment for services?

This is an important nuance. As well as asking if the buyer pays the seller's re altor.

Usually, the agency insists on receiving remuneration immediately after signing the contract. Even if the work on the sale or search for objects has not yet been completed. However, this is disadvantageous for the other party. After all, it is not known whether the deal will take place at all. At the same time, they demand to pay for the services of an agent now, despite the fact that the transfer of funds and the subsequent registration of rights to real estate is yet to come.

Should a re altor's client agree to such unfavorable conditions for him? According to the experts themselves, such services shouldbe paid after they are completed.

Who pays the re altor: the seller or the buyer? The law is silent on this issue, leaving the decision to the participants in the transaction.

When should the money be transferred?

If the re altor works on the side of the seller, the remuneration should be transferred when the transfer of funds from the buyer took place. This is the moment when the transaction is considered completed for the selling party, which means that it no longer needs further support from a real estate specialist.

If the re altor works on the side of the buyer, the client pays for the services after receiving documents confirming the ownership of the acquired object. It is desirable that after this the re altor does not disappear, but is present at the actual transfer of the immovable object to the new legal owner.