Quote:
Originally Posted by bbronston
Here we go again...people just refuse to read the listing contract. The seller is not paying a penny to the buyer’s broker. The seller pays x% to the listing broker...period. The rest of the language is just a disclosure to the seller that the seller’s broker intends to offer a portion of their fee (the money the seller pays the listing broker) to another cooperating broker, if there is one.
This notion that the buyer should pay or that the seller is paying for the cooperating broker is nothing but a 100% misunderstanding of the contract and the way the system works.
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One of the fundamental lessons of economics is that the
statutory payer of a tax such as a real estate commission is independent from the party that bears the ultimate burden of that tax (commission).
The party that bears the ultimate burden is a function of the price-elasticity of demand and the price-elasticity of supply (the respective slopes of the supply and demand curves we all learned about in Econ 101.)
In a nutshell:
- If it is a "seller's market" (a very steep demand curve and shallow supply curve), the buyer bears most of the economic burden of the tax (commission).
- If it is a "buyer's market" (a very shallow demand curve and a steep supply curve), the seller bears most of the economic burden of the tax (commission).
A more complete description can be found here:
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