Real estate transactions require certain knowledge. That is why most sellers and buyers in this market turn to professional realtors. However, this situation raises another question. Who should pay for realtor services related to transaction support? Whose duty is this? Seller or buyer? Let's figure it out.
What's the question?
Real estate transactions have an important feature. Two parties take part in them, namely the seller and the buyer. In fact, each of them uses the services of a realtor. 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 realtor, who remained without remuneration, may turn out to be the affected party at all. How to behave to the specialist accompanying the real estate transaction? Who should I pay for services with?
The situation may turn out to be ambiguous. Buyers believe that the seller should pay the realtor, because it helped him to realize the property and make a profit. However, the seller may have the opposite point of view. He believes that the realtor helped the buyer in finding suitable objects. Accordingly, the buyer must also pay for the services rendered.
This argument can go on forever. However, it has a third point of view, which belongs to the realtors themselves. They would not refuse to receive a commission on each side individually. In fact, this is a double payment for services. However, few specialists in the real estate market manage to crank out such a trick. Usually professional realtors do not voice such plans, but if the opportunity comes up to realize them, they will certainly not miss their own.
Who pays the realtor the seller or buyer?
This is such a controversial issue that sometimes causes difficulties even for the specialists themselves. This also suggests that there is no universal answer. Much depends on the initial conditions. However, two options are always possible who pays the realtor: the seller or the buyer. Let's talk about each of them in more detail.
Seller
How is this scenario developing? The seller of real estate contacts the agency and concludes an appropriate contract. According to its conditions, the realtor is obliged to find a buyer for the indicated value of the object. At the same stage, the cost of services is discussed. It also needs to be fixed in the contract.
If the potential seller does not agree with the conditions that the realtor calls, he can refuse the transaction. Perhaps he will decide that the size of the fee does not correspond to the quantity and complexity of the work performed.
In fact, the seller has two options. Search for a buyer yourself and take yourself the full cost of the object. Or shift this obligation to a realtor and share with him his own income from the sale. Which option, preferably, is independently decided by each seller or buyer. Who pays the realtor, you now know.
Buyer
In this embodiment, the scenario of events is similar to the previous one. The difference is that the agency is contacted not by the seller, but by the buyer of real estate. It is he who concludes the contract, according to which the realtor must select the objects corresponding to the amount that the client has. At the same time, he can refuse professional services and act independently, negotiating with potential sellers of real estate.
So who pays the realtor? Seller or buyer? In fact, this obligation lies with the one who enters into 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 realtor does not bear any obligations to the other party involved in the transaction. This is important to understand when making any real estate transaction.
Possible options
Everything seemed to be obvious, and it became clear to everyone who pays the realtor: the seller or the buyer of the apartment. That would be exactly so, if not for some of the nuances. Let's discuss the possible options and the corresponding scenarios.
- General Realtor. In this situation, the same professional acts, representing the interests of both parties, that is, in this case, the seller and buyer of real estate at the same time. In fact, the realtor gets the greatest benefits. In just one transaction, he receives a double reward. However, it is very difficult to implement, since you need to find the perfect compromise between the seller and the buyer of real estate, without prejudice to the interests of either side. Perhaps, to accomplish such a task, you need to be an experienced professional.
- Different realtors. In this case, each side has its own representative. Who should pay the realtor: buyer or seller? In this case, everything is relatively simple. Each party interested in carrying out a real estate transaction pays a fee to the realtor with whom she previously signed an agreement on the provision of relevant services.
- One realtor. In this case, the representative is either the seller or the buyer. Therefore, the specialist has to work for two in order to complete the deal. Does the buyer have to pay the seller’s realtor? Usually, specialists charge a fee from the one who ordered the service. Accordingly, if the seller contacted the real estate agency, the buyer should not pay a commission to his realtor.
We do not discuss a situation in which both parties to the transaction do not have a representative. Such agreements do not imply the involvement of a realtor; accordingly, no one has the obligation to pay for the services of a specialist in support of real estate transactions.
Controversial situations
The answer to the question: “Who pays interest to the realtor: buyer or seller?”, Is obvious and already known to you. However, despite this, there are many disagreements. What are the reasons for this?
- If the service was provided to the one who did not order it. Suppose the seller exposes his property on a specialized site. He is found by a realtor and offers to bring a buyer. After the conclusion of the transaction, the realtor issues a corresponding invoice to the seller.
- If the realtor is hired by one side and the other does not have a representative, the specialist accompanying the transaction can invoice both the seller and the buyer. It should not be. Services are paid by the party that hired the professional. Based on this, it becomes clear whether the buyer pays the apartment to the seller’s realtor.
To avoid conflicting situations, it is better to discuss the conditions and amount of payment in advance. This will moderate the appetite of a too arrogant realtor. Silence payment issues is also not worth it. This conversation will still take place sooner or later. But the longer it is delayed, the more confusing and intractable the situation becomes.
Realtor Responsibility
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;
- terms of payment (especially relevant for those who use borrowed funds, maternity capital, etc.).
The realtor’s liability does not apply to cases of violation of the terms of the transaction by its parties, that is, the seller or the buyer.
All people tend to make mistakes. Realtors are no exception. If the error of this specialist has led to an increase in the timing of the transfer of the property, the need to correct errors in documents, and so on, the client has the right to demand a reduction in real estate remuneration.
When does the payment for services occur?
This is an important nuance. Along with the question of whether the buyer pays the seller’s realtor.
Typically, the agency insists on receiving a fee immediately after signing the contract. Even if work on the sale or search of objects has not yet been completed. However, this is disadvantageous to the second side. After all, it is not known whether the deal will take place at all. At the same time, they require paying for the services of an agent now, despite the fact that the transfer of funds and the subsequent registration of property rights are still ahead.
Should a client of a realtor agree to such unfavorable conditions for him? According to the experts themselves, such services should be paid after their implementation.
Who pays a realtor: seller or buyer? The law is silent on this issue, leaving the decision to the parties to the transaction.
At what point do you need to transfer money?
If the realtor works on the side of the seller, remuneration should be transferred when the transfer of funds from the buyer took place. This is the moment when the transaction for the seller is considered completed, which means that she no longer needs to be accompanied by a real estate specialist.
If the realtor works on the buyer's side, the client pays for the services after receiving documents confirming the ownership of the purchased property. It is advisable that after this the realtor does not disappear, but is present at the actual transfer of the immovable object to the new legal owner.