Buyer's Agent Incentives Sponsor Condo Units

I've seen buyer broker commissions offered by sponsors bumped up from the standard 3% to 4-5%, so you've got the right suspicion

NYC90, Just ask your agent what the commissions are on each. If you end up buying, you will know via closing statement anyway. If he/she does not want to disclose, find yourself another one who you trust more.

Thanks -I will ask the agent. I did find a recent article about this. I'm not sure all of these incentive arrangements are disclosable on the closing statement - feels like some of these things happen outside the closing.

https://therealdeal.com/2020/01/06/ryan-serhants-50k-cash-offer-to-buyers-agents-ruffles-feathers/

There are incentives that don't show up on closing statements. Like $5000 AmEx gift cards slipped under the table. Or the many escalating commission deals that Toll Bros and others run... 3% for the first deal, then 4% for the second, and so on. Remember, of you look aound the closing table and you cant figure out who the sucker is, it's you.

It's not just the amount but when commissions are being paid. Normally sales commissions are paid at the closing. Even before the "virus slowdown" some Sponsors have been offering to agents that a portion of the commission would be paid upon contract signing.

You shouldn't be listening to your agent regarding where you should live. A good agent will also be knowledgeable of the various neighborhoods, so you can pick their brain. Find a location of a home that suits you, that you can afford and you love. Not a location where the agent thinks you should live. The agent should then be providing you with a financial analysis of the property and your attorney will complete the necessary due diligence on the property. In some cases you may also want to have an inspection done.

The problem with those commission advances on properties that haven't closed, agents have to return them if the deal doesn't close. I've personally never accepted one of those advances for that reason.

Keith Burkhardt
TBG