More and More frequently over the last year or so I’ve encountered disputes at closing regarding Realtor’s Commissions. Of course many of these are quickly addressed without much stress. Lately though, more and more Brokers are requiring commission based upon the gross sales price, not the sales price less Seller’s closing cost credit to Buyer. This position is supported by CAR and cannot be superseded by Closing Custom.

In my experience, in Hartford and Tolland Counties (and also in Windham, New London, New Haven and Middlesex counties – although my experience is not as substantial in these counties), the Custom has always been to pay Realtors Commissions based upon the net transaction. Example $250,000.00 sales price with $5,000.00 closing cost credit would result in commissions based upon $245,000.00 net sales price. This started to get a bit squirrely when in 2009 lenders were made (by Custom) the determining factor in what constitutes an allowable closing cost credit – sometimes leading to the Buyer not being able to fully utilize the offered credit. So, for ease of calculating the Commission due, the CAR position adds a degree of certainty. For Seller though this degree of certainty comes with a cost…

Somehow though, not all Brokers and Agents are aware of CAR’s position and this has led to unfortunate disputes, sometimes in front of clients, at closing.

My advice: If the purchase/sales contract is being written with a closing cost credit from Seller to Buyer, Listing Agent must reach a written agreement with Selling Agent/Broker authorizing commission based upon net sales price – if that is the agreement. Otherwise, Listing Agent is obligated to Selling Agent as per MLS commission split offered.

The obvious way to ensure that your commission is correct is to get it in writing and to provide that information to both the Buyer’s and the Seller’s attorney before closing. If the commission statements provided by the Listing Broker/Realtor and Selling Broker/Realtor differ, if provided before closing, we should have time to resolve any issues without involving the clients in the dispute.