When does the buyer's broker get paid?

1) I guess the "point" you refer to would be when the buyers broker client receives back a fully executed contract from the sellers attorney. Buyer signs first, seller countersigns and sends back and I guess that is the point that the buyer broker is on record to receive an ultimate commission..now, we have to close the deal..which brings us to

2) No, Its at the closing table that both the buyer broker and seller broker will receive their commissions. Its one of the last things done at the closing table after the deal is sealed. Usually the closing is a few weeks after the board approval is received.

Urbandigs: Couldn't you put #1 a little earlier, when the deal sheet goes to the attorneys? That document informs the seller's attorney, who will ultimately cut the checks at the closing, of the parties entitled to a commission and the exact amounts due.

Of course, if the deal doesn't close, neither broker gets paid. But a signed contract doesn't change that. I do see your point, though, about the contract establishing the broker's standing re. procuring cause.

realdeal777: Note that if both brokers are REBNY members, there's no need for a signed co-brokerage agreement. REBNY firms are bound by a Universal Co-Brokerage Agreement that mandates a 50-50 commission split, among other things.

What you are asking is really a legal point, so as agents and salespeople, we're not technically qualified to answer, since we don't practice law. I advise you to consult an attorney.

However in practice, a commission is earned during "offer and acceptance" -- and usually the signed contract, which does include commission clauses, is seen as proof of that. Then for buyer's broker to be paid, whatever conditions are outlined in the contract need to be fulfilled (board approval usually being the big one). That earned commission is paid out at closing.

However, if both parties are lined up for a closing, and the seller pulls out, buyer's broker has still earned a commission and can go after the seller for it, though in practice he/she may not choose to do that.

West81st is correct that REBNY agreements cover REBNY co-brokes, and mandate 50/50%.

Since his firm isn't REBNY, he can walk you through how he gets paid by REBNY seller's brokers. I believe that there's nothing in REBNY rules that mandates that the payout to non-REBNY brokers be as high as 50%, so I guess in theory each individual listing contract could govern here, and it could be a new negotiation every time.

ali r.
DG Neary Realty

west81st -- yes, I prob could have.

Ali: With regard to non-REBNY firms, I can only speak for us. If the listing firm wants a co-broke agreement, we sign one. If they don't care, we don't bring it up. An even commission split on sales is such an established custom that it's almost an insult for either firm to bring it up. As long as the deal sheet goes to the seller's attorney with The Burkhardt Group listed as agent for the buyer, with the correct amount, we don't have any trouble getting paid. When the closing date is set, we send the seller's attorney an invoice, and we pick up the check at the closing. It really is that simple, at least on sales. REBNY touts the Universal Co-Broke as a huge advantage. In my experience, not having it is, at worst, a minor inconvenience.

Again, I'm only speaking for us, and I understand that rentals are probably dicier than sales. I'm not in that world, so the challenges of getting paid on rentals don't affect me.

you have to watch out in brooklyn as bnymls lists what the co-broke commission is. there was a, now defunct, RE in park slope who always took 6% and gave 1% to buyer's broker. as you can expect, there were no co-brokes.

>However, if both parties are lined up for a closing, and the seller pulls out, buyer's broker has still earned a commission and can go after the seller for it, though in practice he/she may not choose to do that.

Seriously?

Yes greensdale, if the seller breaks the contract at the last minute, why should the buyer's broker suffer? His/her job was to deliver a ready, willing, and able buyer, and he/she did that (of course, if buyer is the one who breaks the contract at the last minute, then commission has NOT been earned). At least this is the way it was taught to me. I'm not providing specific legal advice here.

ali r.

Ali: I guess you're right in theory. In practice, it seems like a stretch to go after the seller, especially if the listing brokerage doesn't try to collect their piece.

As for your question, "Why should the buyer's broker suffer?", I think you are overstating the damage. You still have a client. If you do a good job, the client will probably buy something, and you will earn a commission - possibly a bigger one. I understand that you will have to wait longer and work more hours; but you won't really know how much harm the seller has done you until your relationship with the buyer has run its full course.

>"Why should the buyer's broker suffer?", I think you are overstating the damage. You still have a client.

I think this falls into the bucket of "her time being stolen".

Amazing. There's no transaction yet. The buyer didn't get his property, but the buyers' broker feels she deserves and is lawfully owed the commission. Maybe when the buyer does complete a later transaction, the broker can have collected twice? Nice

If the contract was valid and the seller breached, if the buyer seeks to enforce the contract and complete the transaction, then the buyer's broker is owed.

Well, along the lines of "the buyer didn't get his property" -- usually in that circumstance buyer is making a parallel move to get the contract enforced. Don't read this as "buyer's broker wants to sit on the sofa and eat bonbons" -- every party on buyer's side is probably moving to enforce their contractual rights after a late breach.

And W81, in that circumstance, listing brokerage doesn't have rights as I understand it, because they haven't finished doing their job.

ali r.

>Well, along the lines of "the buyer didn't get his property" -- usually in that circumstance buyer is making a parallel move to get the contract enforced. Don't read this as "buyer's broker wants to sit on the sofa and eat bonbons" -- every party on buyer's side is probably moving to enforce their contractual rights after a late breach.

According to you, the buyer could end up with nothing and the buyers broker with her fee.

>And W81, in that circumstance, listing brokerage doesn't have rights as I understand it, because they haven't finished doing their job.

And you've highlighted the fact that the buyer's broker has no duty to the buyer, only to the seller.

http://streeteasy.com/nyc/talk/discussion/34264-why-the-internet-has-not-ended-brokers