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Old 07-07-2020, 07:14 AM
 
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How common is this? Never seen it before on the selling end.

Agent is unrelated to buyer and wants to "gift" his entire commission to the tune of $20k and change. Buyer wants to use this as part of the down-payment. I've seen waived commission or deep discounts for family but never a gift where the commission is paid and the person is unrelated to the agent. I suspect they are romantically involved but thats beside the point.

We have a few offers on the table and are deciding between them. This one has the best terms but the "gift " thing seems like it may cause headaches with the lender for conventional financing. And it seems chancy should the relationship sour before closing and the gift be withdrawn.

Have you heard of this? Is it common?
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Old 07-07-2020, 11:22 AM
 
Location: Columbia, SC
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Pretty sure the down payment can't be the commission gifted from the transaction. Check with a lender to verify. If I were the seller, and I had other stronger offers I'd take a different one.

No, never seen that. Perhaps the agent was the listing agent on a home they sold and that's the deal they made?
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Old 07-07-2020, 12:03 PM
 
Location: Everywhere and no where
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Just to clarify, this is the buyer agent gifting the commission, not the seller's agent, I assume?

Seems pretty rare. Buyer commission can't be used as down payment as stated.
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Old 07-07-2020, 12:04 PM
 
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Quote:
Originally Posted by Brandon Hoffman View Post
Pretty sure the down payment can't be the commission gifted from the transaction. Check with a lender to verify. If I were the seller, and I had other stronger offers I'd take a different one.

No, never seen that. Perhaps the agent was the listing agent on a home they sold and that's the deal they made?
The commission only accounts for part of the buyers down payment which is over 200k. The buyer has a prequel letter that gives her a lot of room above our asking price. We are tempted to ask if she would be willing to offer without including this "gift" as part of her funds. I mean the agent can write her a check after closing and she can use it to pay down the mortgage to where she wants to be.
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Old 07-07-2020, 12:05 PM
 
3,248 posts, read 1,940,621 times
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Quote:
Originally Posted by AndroidAZ View Post
Just to clarify, this is the buyer agent gifting the commission, not the seller's agent, I assume?

Seems pretty rare. Buyer commission can't be used as down payment as stated.
Yes we are the sellers and this is an offer from a buyer, one of three we have currently. The only reason we know that this is happening is that the buyer included a letter with the offer describing how she loves the house and why we should pick her. It mentions this.
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Old 07-07-2020, 01:34 PM
 
Location: Princeton, New Jersey
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Quote:
Originally Posted by emotiioo View Post
The commission only accounts for part of the buyers down payment which is over 200k. The buyer has a prequel letter that gives her a lot of room above our asking price. We are tempted to ask if she would be willing to offer without including this "gift" as part of her funds. I mean the agent can write her a check after closing and she can use it to pay down the mortgage to where she wants to be.
But that won’t change the monthly payment if it’s paid after the fact. But I agree that it’s weird. I would pick something else.
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Old 07-07-2020, 01:43 PM
 
Location: Florida -
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It's probably perfectly legal (although problematic if the "gift" is to be used for the down payment). A greater concern might be whether there is a conflict of interest involved(?) - Is the buyer paying full asking price -- and are there higher offers in the mix?
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Old 07-08-2020, 06:47 AM
 
Location: Needham, MA
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I agree that it seems like this could cause some issues. Why not suggest to them that the agent waive his commission and that you'll reduce the price by an equal amount? Makes things more simple and less problematic.
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Old 07-08-2020, 09:20 AM
 
Location: Salem, OR
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Originally Posted by MikePRU View Post
I agree that it seems like this could cause some issues. Why not suggest to them that the agent waive his commission and that you'll reduce the price by an equal amount? Makes things more simple and less problematic.
Agree. That is nice and clean and won't be an issue for lenders.
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Old 07-08-2020, 09:28 AM
 
Location: Rochester, WA
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No this isn't common. The agent will pay income tax on that money, not sure they thought this through. I hope the relationship works out.

I'm not sure why this side deal is part of the contract. If the commission is paid to the agent, what the agent does with it next should not be part of the contract.

If the buyer is depending on the gift for the cash needed to close, then they will need to work that out with the lender. If a letter was included with the offer... it is perfectly acceptable for listing agent to call the lender and verify that the terms of the offer are acceptable to the lender and underwriters.
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