Buyer Agent Commission - Acceptable Contracts / Addenda & Financing Implications
In order for you to be paid, you must contract your commission. Here are the acceptable ways to do so and their implications:
Preferred Method - TREC One to Four Family Contract
Acceptable Methods - Separate Commission Agreements
The TXR-2402 Compensation Agreement Between Brokers
- If the listing agent has confirmed cooperative compensation:
- Leave 12a1b blank or supplement with the appropriate compensation you and your buyer agreed upon in your representation agreement.
- Ensure the TXR-2402 form is signed before submitting the offer.
- Fill out the commission details on page 10 of the contract.
- Example: 12a1b = 1% and TXR-2402/pg. 10 2%
Acceptable Edge Case - 12.A(1)(c)
If you are dealing with an unreasonable seller/agent who refuses to pay BAC or a portion of your BAC, you should write in the amount into 12.A(1)(c). There will be different IPC limits that a lender will accept, depending on the type of financing so make sure to double check with your buyers lender, but these limits are all >3%. However, if your buyer needs more closing costs, then it could be problematic.
Buyer Pays at Closing (out of pocket)
Your buyer can always pay some or all of your commission at closing. If this is the case, make sure and notify the lender and title as soon as you go under contract or you will likely lose most/all of this amount due to lending disclosure requirements.