It's very common in the Twin Cities market for first time home buyers to ask sellers to pay for some of the buyer's closing costs. Today's buyers may have "A" credit, have a good job, and a good lender, but they have trouble coming up with enough money to pay all of the closing fees to get into the house.
Sellers who are wanting to negotiate in good faith with a potential buyer often raise the sale price of the home to compensate for contributing to the buyer's closing costs.
When the sale price of the home goes up, so does the commission. As a result, we are seeing these kinds of comments in the MLS more often:
- "Commission not paid on seller concessions", or
- "Commission based on net."
This statement was just released by our regional MLS:
There is nothing to prevent these kinds of changes to the compensation being negotiated between the parties before a deal is concluded. However, the listing broker may not require (through statement on the MLS) the cooperating broker to accept a commission based on the net sales price (or other deviations from the rule). Compensation offered strictly according to the rule of flat dollar amount or percent of gross selling price is essential to preserve the contractual relationship between brokers that is created by participation in the MLS.
Why should a seller have to pay a real estate agent's commission on a sale price that's been adjusted to include buyer's closing costs? It doesn't seem fair that a seller would be penalized and charged more commission simply because they are trying to negotiate a sale with a buyer.
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