Often when I am working with buyers buying a condo in Miami Beach, they are unclear about who is responsible for paying the real estate commissions.   Although this question or concern is often glazed over by many, it’s super important for buyers to understand how commission is paid and what is expected of them in advance to showing property.

The commission structure and how it is paid,  is initially negotiated between the seller and the listing agent on the “listing agreement” and it’s also listed in our MLS database.  This listing and the “fee structure” noted in the MLS is an agreement between the seller’s brokerage and the buyer’s brokerage.  Generally speaking the seller pays the commissions on a real estate transaction in Miami Beach.

With that said, real estate transactions are negotiable and there are times when the buyer could be asked to pay the commission.

When could this happen?

First I want to say that I think it’s super important for agents to discuss commissions in advance to showing property.

I also think it’s very important for agents and buyers to establish expectations from each other in advance.  We do this through our Buyer’s Brokerage Agreement.   A Buyer’s Brokerage Agreement sets up expectations and states the brokerage’s responsibility to the buyer.

Here are some instances when the buyer could be asked to pay for commissions:

• Cheap REOS (foreclosures):  Some REOS are listed with super cheap commission structures.  The competition for REOS is fierce and they require a lot of work.    Some REO investors want savvy agents who can find these deals and make it happen for them.   Therefore they are more than willing to chip in and pay a good buyer’s agent to make it worth their time.
• For Sale By Owner: Most FSBO don’t list the property because they cannot afford the commissions.  But what if it’s a great property at a great price?  As a buyer you don’t want to miss out on it just because it’s not in the MLS and doesn’t have a commission agreement.  Therefore you could agree to pay your agent’s commissions and the agent could work with you and the FSBO to help you purchase the property.

There are many more scenarios like these and the most important thing to take away is to know that  in real estate, nothing is set in stone.  Although typically the sellers pay the real estate commissions when purchasing a property in Miami Beach, in certain circumstances, buyers could be asked to chip in and pay.

It’s very important that you and your real estate agent set this expectation in advance.

Copyright © By Jamey Prezzi 2010 * All Rights Reserved* When Buying a Condo in Miami Beach Who Pays the Real Estate Commission?

You may also like:

1. Hiring a Miami Beach Real Estate Agent for buying or renting… uncovering a few myths PART I
2. Things to Know When Buying a Condo in Miami Beach
3. How to Get a Good Deal on Miami Beach Luxury Real Estate?
4. Miami Beach Real Estate and Renting Out Your Condo
5. Miami Beach Real Estate Myths: Shorts sales & Pricing