Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
We have to play the game by the current rules. If the mls is cooperation and compensation as listed in the sellers listing agreement. Then the money goes from the seller to the sellers brokerage and then to the buyers brokerage, if any.
The buyers do not have a lobby to make anything change. We (NAR) has a lobby, but the Mortgage professional lobby will not support it, so down it goes.
CFPB, much as I resent them, could be a force for fixing it and dragging NAR out of the Dark Ages.
But, it's all slight of hand and not transparent to buyers.
NAR actually encourages agents to tell buyers that they get free representation from a fiduciary.
Tortured logic to mislead people for profit.
We have to play the game by the current rules. If the mls is cooperation and compensation as listed in the sellers listing agreement. Then the money goes from the seller to the sellers brokerage and then to the buyers brokerage, if any.
The buyers do not have a lobby to make anything change. We (NAR) has a lobby, but the Mortgage professional lobby will not support it, so down it goes.
Interesting. We do not play that game. The compensation is listed in the listing agreement but it goes directly from escrow to the selling broker. No transmission through the listing broker. So no 1099s for the brokers or a kickback to buyer or seller.
Interesting. We do not play that game. The compensation is listed in the listing agreement but it goes directly from escrow to the selling broker. No transmission through the listing broker. So no 1099s for the brokers or a kickback to buyer or seller.
Right.
The CD shows disbursement amounts, but no tracking.
Interesting. We do not play that game. The compensation is listed in the listing agreement but it goes directly from escrow to the selling broker. No transmission through the listing broker. So no 1099s for the brokers or a kickback to buyer or seller.
Contractually, the coop flows from the seller to the listing brokerage and then to the selling brokerage, if any.
Contractually, the coop flows from the seller to the listing brokerage and then to the selling brokerage, if any.
Not here. The listing contract directs who gets paid what. It may, for instance, cut the size of the commission if the listing broker makes the sale. But the payment goes from the buyer to escrow to the various players. The listing broker never has any access or control of the selling brokers commission. And note the offer and acceptance may modify some of that.
“Contractually” through the signed listing agreement. The NAR, my CPA, the IRS don’t care if the listing brokerage touches the money. The whole amount is owed to the listing broker and they agreed to pay the selling brokerage a coop fee.
“Contractually” through the signed listing agreement. The NAR, my CPA, the IRS don’t care if the listing brokerage touches the money. The whole amount is owed to the listing broker and they agreed to pay the selling brokerage a coop fee.
Boy, have we gotten into the weeds.
And I am pointing out to you that realtors here are NAR and LVR and do not issue such 1099s and never have over the 20 years we have been Realtors. So it would appear to be a local fiction in your locale.
And yes we are in the weeds. But you continue to lead the way. Face it. We do not do 1099s.
And I am pointing out to you that realtors here are NAR and LVR and do not issue such 1099s and never have over the 20 years we have been Realtors. So it would appear to be a local fiction in your locale.
And yes we are in the weeds. But you continue to lead the way. Face it. We do not do 1099s.
I think you're both right and arguing semantics. The total fee is owed the listing brokerage but it is paid out directly to the selling brokerage at closing.
The IRS says that a cash rebate paid to a buyer of property at or after closing is an adjustment in the price, and is therefore not taxable income to the buyer. Rather, the buyer should subtract the amount of the rebate from the home’s basis. This will, of course, increase any potential profit when the home is sold.
Since they are not taxable income, such rebates need not be reported on Form 1099-MISC. Thus, brokers should not send 1099s to buyers reporting such rebates. Any buyer who has received a 1099 that reports such a payment in error should ask the broker to correct or withdraw it.
Interesting..
I'm in my LLC, and all proceeds go to the LLC, I never get a 1099.
But, I never got one when I was with KW, either.
Certainly have never used one for a client.
I guess I don't see the purpose or practical need.
When I agree to rebate some of my fee to the buyer, I negotiate a fee reduction with the seller in exchange for a closing cost credit. This way my firm and I never touch the money and as far as I know (not a CPA) it's not a taxable event for anyone.
Quote:
Originally Posted by Gaylord_Focker
I had an agent promise me 5k and she rightfully did nothing for me. Didn't build a list, schedule anything. She'd just meet at listings I liked.
However I am a very easy buyer as my wife favors new builds so basically we show up, look negotiate a bit, though with new builds, what can you really get off, and she gets her percent. So she was happy to throw it at me.
If you're happy with your representation then
Buying new is not the panacea for all real estate transaction problems that many buyers seem to think it is. There's a lot that a qualified agent can help you with when buying new that can save you money either up front or during your ownership of the house.
Quote:
Originally Posted by 2bindenver
Most listing brokerages 1099 the selling brokerage here.
We get 1099'ed by the listing brokerage as I imagine everyone does. However, the 1099 is just for the funds we receive not for money rebated so long as the rebate is done right and shows on the CD/closing statement.
Quote:
Originally Posted by lvmensch
Interesting. Do you actually cut a check to the selling brokerage? No one here does and I do not think it is done in CA either. So we don't cut any checks...escrow does...and we certainly don't 1099 money we never touched.
Here in MA, it's pretty typical for the listing brokerage to act as the escrow agent (attorneys do the closings here). So, we hold the deposit funds and a common escrow deposit is 5% of the purchase price. Typically, this is sufficient to cover the agent fees and so we cut a check directly to the selling brokerage.
Quote:
Originally Posted by MikeJaquish
CFPB, much as I resent them, could be a force for fixing it and dragging NAR out of the Dark Ages.
But, it's all slight of hand and not transparent to buyers.
NAR actually encourages agents to tell buyers that they get free representation from a fiduciary.
Tortured logic to mislead people for profit.
I wonder whatever happened to those multiple lawsuits that popped up last year about sellers paying buyer's agents?
Quote:
Originally Posted by lvmensch
Interesting. We do not play that game. The compensation is listed in the listing agreement but it goes directly from escrow to the selling broker. No transmission through the listing broker. So no 1099s for the brokers or a kickback to buyer or seller.
Quote:
Originally Posted by lvmensch
Not here. The listing contract directs who gets paid what. It may, for instance, cut the size of the commission if the listing broker makes the sale. But the payment goes from the buyer to escrow to the various players. The listing broker never has any access or control of the selling brokers commission. And note the offer and acceptance may modify some of that.
Our listing agreement also states the co-broke fee. It also says the commission is due the listing brokerage and that we agree to share X amount of it with the buyer's agent if there is one.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
