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Realtor Questions *How pay commission if thu broker 1st?*

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This topic contains 14 replies, has 0 voices, and was last updated by Avatar of positive thinker positive thinker 12 years, 1 month ago.

Viewing 15 posts - 1 through 15 (of 16 total)
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  • #3996

    I met with a realtor & he had questions. They are:

    1) How do commission payments work if a realtor is promised a % commission for seller/buyer referrals, but the payment must go through their broker first?

    2) How does the realtor get credit for the sale of the property following the termination of the trust?

    I would appreciate answers so that I can contact him back with answers.

    Thanks

    #23075
    Avatar of areyes
    areyes
    Member

    @Positive Thinker wrote:

    I met with a realtor & he had questions. They are:

    1) How do commission payments work if a realtor is promised a % commission for seller/buyer referrals, but the payment must go through their broker first?

    2) How does the realtor get credit for the sale of the property following the termination of the trust?

    I would appreciate answers so that I can contact him back with answers.

    Thanks

    Appendix 2 should cover that

    #23076

    Where is appendix 2? Are you talking about Scott’s book or the NARS book?

    #23077
    Avatar of areyes
    areyes
    Member

    Its in the NARS book with the rest of the appendixes, NEO, etc

    #23078

    Hey Alvin;

    I found the form but how can I simplify my answers to the realtor? I read through the Retainer Fee Agreement – 3rd party land trust document & don’t see where it answers the specific questions… or does it??

    1) How do commission payments work if a realtor is promised a % commission for seller/buyer referrals, but the payment must go through their broker first?

    2) How does the realtor get credit for the sale of the property following the termination of the trust?

    #23079
    Avatar of mtnwizard49
    mtnwizard49
    Member

    Just a thought. Instead of just being a positive thinker, don’t you think it’s a better idea to read BILL’S ENTIRE MANUAL before you get tripped up and embarrassed in front of a realtor? This is pretty basic stuff. If you don’t know what or where the Appendixes are and what they are for, I’d start reading before jumping in with both feet. I wish you the best of luck.

    #23080

    You know what Gary, I have yet to complete my first transacation, and don’t have a PHD like you do. Obviously Gary, you must know all the answers and based on your response, I’m asking stupid questions so therefore am a total idiot.

    By the way, I have read the entire NARS manual but unfortunately I don’t have a photographic memory so can’t remember everything. I also have not done a deal yet so continue to learn as I go – I use this sight for help in answering my stupid questions – not all of us have all the answers and are as knowledgeable about everything as you are…..

    No matter what you say, I’ll continue thinking positive.

    #23081
    Avatar of mtnwizard49
    mtnwizard49
    Member

    We’re all friends here. Continue to think positive and good luck.

    #23082
    Avatar of areyes
    areyes
    Member

    @Positive Thinker wrote:

    Hey Alvin;

    I found the form but how can I simplify my answers to the realtor? I read through the Retainer Fee Agreement – 3rd party land trust document & don’t see where it answers the specific questions… or does it??

    1) How do commission payments work if a realtor is promised a % commission for seller/buyer referrals, but the payment must go through their broker first?

    2) How does the realtor get credit for the sale of the property following the termination of the trust?

    broker will get paid first and the realtor will get their commission split based on their % with the broker.

    1st line of distribution is the underlying loan and encumberances

    2nd line of distributions at trust termination pays of escrow, closing costs, any commissions.

    etc..

    #23083
    Avatar of homesavers
    NULL
    Member

    @Positive Thinker wrote:

    I met with a realtor & he had questions. They are:

    1) How do commission payments work if a realtor is promised a % commission for seller/buyer referrals, but the payment must go through their broker first?

    2) How does the realtor get credit for the sale of the property following the termination of the trust?

    I would appreciate answers so that I can contact him back with answers.

    Thanks

    Answer to number 1: All payments to Realtor have to go through the Broker. Agents are never paid direct. Agent should get permission of their Broker when doing these deals.
    Answer to number 2: Realtor gets credit the same way anyone does through agreement and escrow demand. It is just a long escrow.

    This is the way I understand the process.
    PS: There is no such thing as a stupid question. Ask away does not matter if it is in the manuals. If all we needed was manuals then we wouldn’t need teachers.

    #23084

    Thanks so much for the direct answers Alvin & homesavers! I really do appreciate it.

    #23085
    Avatar of jerry carey
    jerry carey
    Member

    Positive Thinker … Welcome Pilgrim!

    Didn’t ya luv John Wayne?

    Anyway, you have to distinguish the difference betwen a “commission” and a “referral Fee”.

    If a Realtor (Agent or Broker) has a buyer who cannot qualify for a loan … and they cannot do anything with this prospect … then pay them a referral fee in full, when the trust closes escrow. Usually a standard Realtor referral fee is 25% of the usual 3% total commision for sale OR listing (one side of the deal)! So .0075%of the MAV is fair!

    If the property is listed on the MLS and is not selling and the Realtor helps you get the Settlor Beneficiary … they get a Commission … not a referral fee. A 3% Commission is typically paid 1% at trust inception and closing; 1% monthly during the term of the NNN lease; and the final 1% at the Trust termination and sale of the property!

    Realize that this is ALL subject to negotiation between you and the Agent/Broker as to how much they get paid and when!

    You should buy the E-book by Scott Moyes … How to deal with Realtors! do a seach for it here on the board!

    Hope this helps , Too!

    Jerry Carey

    #23086
    Avatar of scott
    scott
    Member

    @homesavers wrote:

    Answer to number 1: All payments to Realtor have to go through the Broker. Agents are never paid direct. Agent should get permission of their Broker when doing these deals.

    I think DB Henderson said he has the check made out to the broker but delivered to the agents address. At first the agent comes in with a check every month, then several checks every month, and finally the broker thinks ” can I have all my agents do this?”.

    #23087

    @areyes wrote:

    Appendix 2 should cover that

    No, it is not Appendix #2. There are a couple of ways to handle this. In the NARS Documentation Manual you will find a “Realtor Commission Form” or Report that outlines who and how much you will be paying to the Realtor/s. It also spells out how much the Broker gets too. A Realtor does not have to be a Beneficiary to be a payee of the Trust.

    There is also a line item on the Cross Foot Report / NARS Net Sheet that the Realtor Commission is listed.

    Realtor Commissions can also be listed as an encumbrance, for lack of a better word, on the distribution of proceeds. It is listed in Line #2 of Exhibit A of the Beneficiary Agreement.

    You have many ways and opptions to “compensate” a Realtor. For example, I know that one of the Realtors I use has a “Flat Fee” arrangement with his Broker. He has to pay $500 per sale and the rest he keeps. I pay him 1% upfront and $100 per month on properties he shows for me. He also collects the application and briefly explains what is required of them to qualify for my property.

    There is no “credit” for a sale because there is No Sale, yet. When the house actually does sale, in say three years, he may get the rest of his commission, if I’ve agreed to pay him any more, at termination of the trust as in line #2 of the Beneficiary Agreement Exhibit “A”.

    If an Agent is on a split, then they would split the upfront, any monthly they may be getting and any back end. The Agent commissions are paid to the Broker and the Broker must take their split and pay the Agent, just as in a sale. Agents don’t get paid for just “sales”. Do you realize that some Agents get paid just to “manage” properties. They get paid a monthly management fee instead of commission. So, why not in an EHTrust?

    #23088

    Thank you Scott & everyone for the valuable information.

    Just FYI – The realtor that I met with who asked me the 2 original questions on this post gave me 2 leads on the spot during our meeting on Friday – with more to come he says. The first lead was one of his listings that expires next week. The second lead – he called another realtor while I was in his office & she provided all the details. So now – whammo, I have two realtors that I’m working with when I only met with one!

    I’ll post & let everyone know how it goes. Thanks again for all the support.

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