Can a Real Estate Agent's Commission paid based on difference between the property sale price and the actual sale price? Meaning, if the realtor offering a property for sale at $100,000, can the agent offer to find a buyer who can pay $120,000 for the same property and to have the price difference ($20,000) as his/her commission? If yes, what type of commission contracts does the agent need to have with the realtor and the buyers? Thank you,
You need to ask your broker if this is acceptable, I can't think of any state this is legal in. The commission is a percentage of the actual sales price, the listing price does not figure into the equation at all.
First off $20k commission on a $100k house- waaaay too much. Second the realtor doesn't set the price the owner does- the realtor can't change it without the owners consent. Finally if a house is worth $100k you can't get a mortgage on it for 120k- lenders do not lend more than the appraised value- EVER.
A seller can request to receive X amount of dollars from the sale, and anything the Realtor can get over that amount is his commission. A standard contract can be used, but this special provision must be written in and initialed by all parties.
In Real Estate EVERYTHING is negotiable if it has not been signed and agreed upon in a contract already. So if you guys already signed the purchase contract which is why you have a closing date already, you cannot fire anyone. The agent will get his/her 3%. I doubt the seller will want to negotiate again with you if he know he alredy has the home sold so I dont see how the seller could cancell the contract to help you bring in another agent and cut into their profits. You can put a complaint with your state's Department of Real Estate. You could also take them to court but I doubt you will want to spend lots of $$ in court. IF you have not signed the purchased contract which I dont think this is the case since you already have a closing date, you could fire the agent anytime and get someone that can represent your best interest in the transaction. Good luck
Real Estate Law is a state issue and you will have to read your state law about this. In Illinois this is legal though you need to spell this out in the listing agreement. Go on-line at your state and they will have the real estate act available there. It will be easy and quick to go to the commission section and see if this is allowed in your state and how to do this. I think it's a net listing.
