The Chicken or the Egg?

The Chicken or the Egg?

Ah….the age old question. Who really pays the commission? The Buyer (chicken) or the Seller (egg)? Well, let me see if my limited intelligence can come up with a suitable answer, at least from my point of view. OK here goes…..a Real Estate transaction is an equal exchange of value. The Buyer brings money the Seller brings property. Out of this equal exchange the commission is paid. In my opinion, the commission is paid by the Seller from the value of the property from the money brought or borrowed by the Buyer.. The value of the property is based on current market conditions and an appraised value that is determined by using the selling price of recent comparable properties.

We can assume then, that the recent sales included an amount that was used to pay the commission in those particular transactions. Therefore, the commission is in the value of the property. Since the Seller, is the one bringing the property to the table, it only makes sense that he also bringing the commission.

So what we have so far is: Property value + commission paid = recent sales price traded for money borrowed @ 6.5% over 30 years + funds contributed by buyer rebate company – 6% non-negotiable commission (as per DOJ) + 1% discount on listing side commission (due to quick sale) – $395 per transaction fee paid to absentee Broker.

Now that I have cleared up, that 100 year old dispute, I think I’m ready for an omelet. Now if I can just find that damn chicken.

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