When it comes to buying or selling real estate, commissions are often an unavoidable cost. Real estate commissions are typically paid by the seller and are a percentage of the sale price. These commissions compensate the real estate agents involved in the transaction for their services.
Before engaging in any real estate transaction, it`s crucial to understand the agreement to pay real estate commission. This agreement is a legal contract that outlines the terms and conditions of how the real estate commission will be paid.
The agreement to pay real estate commission is typically included in the listing agreement, which is signed by the seller and the listing agent. It`s essential to read and understand this agreement before signing it, as it lays out the details of how and when the commission will be paid.
The agreement to pay real estate commission typically specifies the percentage of the commission, which is usually between 5% and 6%. The agreement may also indicate whether the commission is split between the listing agent and the buyer`s agent or if the commission is paid solely to the listing agent.
The agreement also outlines when the commission will be paid. Typically, the commission is paid when the sale of the property closes. If the sale falls through and the property doesn`t close, the commission may not be paid.
In some cases, the agreement may also include provisions for the payment of a commission if the property is leased, rented, or exchanged. These provisions should be clearly outlined in the agreement, so both parties understand their obligations.
It`s important to note that the agreement to pay real estate commission is a legally binding contract. If the seller fails to pay the commission as outlined in the agreement, the listing agent may take legal action to recover the commission.
In conclusion, the agreement to pay real estate commission is an essential component of any real estate transaction. As a buyer or seller, it`s crucial to understand the terms and conditions of the agreement before signing it. By doing so, you can ensure that you`re aware of your obligations and can avoid any legal issues down the line.