Buyer’s agency is a relatively recent phenomena in Massachusetts. While it has been my practice to pay the Buyer’s Agent directly at closing, I am informed by Buyer’s Agent clients and friends, that this is not always what transpires. Many times, the Buyer’s Agent must wait for the Listing Agent to “process” the final closing transaction, and then make remittance to the Buyer’s Agent some time in the future. I am aware of one situation where the check delivered two weeks after the closing was returned because of insufficient funds in the Listing Agent’s checking account.<\/p>\n
The Buyer’s Agent works for the Buyer, even though payment of the Buyer’s Agency fee is geneerally made by the Seller.There follow several suggestions for Buyer’s Agents which can mitigate the delay, and other problems, associated with the\u00a0current normal practices:<\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 1. Manage the Deposit at the time of Offer. If the amount of Deposit can be limited to no more than the fee which is due to the Listing Agent, the ability of the closing agent to make direct payment to the Buyer’s Agent is greatly enhanced. If the Seller insists on a greater Deposit, have the Deposit split in such a way that no more than the amount to which the Listing Broker is entitled is placed in escrow\u00a0with the\u00a0Listing Agent. The remainder of the Deposit may then be placed in escrow with the Buyer’s Agent to insure prompt payment after closing.<\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 2. Have the Deposit placed in the Escrow Account of the Seller’s Attorney. Insisting on this condition will take the power away from the Listing Agent to sit on the Deposit. Because having a check drawn on an Escrow Account of an attorney returned for non-payment is an ethical violation which will subject the attorney to disciplinary action by the Massachusetts Board of Bar Overseers, the safety and security of the Deposit is greatly enhanced. The Seller’s attorney may either hand over the Deposit to the closing agent at closing, or make direct payment to the Listing Agent and the Buyer’s Agent at the closing. The treatment of the Deposit should be carefully spelled out in the Offer, and then reinforced in the Purchase and Sale Agreement for the transaction, See Paragraph 3 below.<\/p>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 3. Take Extra Care to Make Sure that the documentation for the transaction provides for payment at closing. As a Buyer’s Agent, you have an obligation to review the Offer and the\u00a0Purchase and Sale Agreement and Rider(s) thereto, on behalf of the Buyer. Make sure a provision is included in both documents that specifically directs the closing agent to make payment of the fee due to the Buyer’s Agent,directly to the Buyer’s Agent ,at the closing. If the Seller has executed a document with these instructions, the closing agent has no choice but to adhere to the specific provisions of the Purchase and Sale Agreement.<\/p>\n
You, as a Buyer’s Agent, have worked hard on your customer’s behalf to earn your commission. The steps set forth above should assist you not only in obtaining your commission, but. just as importantly, obtaining your commission at the same time as the Listing Agent obtains his or hers. It is time to make the playing field level for Buyer’s Agent and adoption of the measures set forth above\u00a0should be \u00a0step in the right direction. See my blog: www.realtorsresourcblog.com<\/a> for more suggestions and comments.<\/p>\n","protected":false},"excerpt":{"rendered":" Buyer’s agency is a relatively recent phenomena in Massachusetts. While it has been my practice to pay the Buyer’s Agent directly at closing, I am informed by Buyer’s Agent clients and friends, that this is not always what transpires. Many times, the Buyer’s Agent must wait for the Listing Agent to “process” the final closing … Continue reading Payment at Closing–A suggested “Ounce of Prevention” for Buyer’s Agents<\/span>