Closing disclosure reveals FSBO seller owes buyer’s agent a commission

3 min read

Dear Real Estate Adviser,
I’m selling my house “as is.” The person buying it has an agent, but I don’t. With closing approaching, I received my copy of the Closing Disclosure. It claims I’m stuck paying the commission to the buyer’s agent! Since I had no agent, the buyer’s agent says she’s also acting as the selling agent and claims I signed a form stating this. What can I do?
— Juan M.

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Dear Juan,
Your first move it to request a copy of that form or contract you supposedly signed. If produced, give it a thorough read to see if the claim is true. Surely you would have your own copy, no?

If the contract clearly states you agreed to pay the agent part or full commission, you may be technically obligated, as unreasonable as this might sound. Even if it contained something you didn’t agree to (borderline fraud), you signed it, though you could declare the deal off because of such dishonesty and see what happens. They might threaten to sue, but can’t force you to sell.

Something else doesn’t smell quite right here. When buyers suggest a FSBO (or, for-sale-by-owner) listing, such as yours to an agent, they’re often steered away unless the seller agrees to pay half or full commission. Yet the agent came to you without verbal mention of any commission, it seems.

Perhaps the plan was to stick you for a percentage all along.

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Who put the commission on the closing disclosure?

Then there’s this: It’s the mortgage lender who’s required to provide the closing disclosure, or CD, to the buyer. This makes me wonder if the agent/buyer told the bank to add the commission obligation in there, as galling as that seems. You should know that the closing disclosure is not a binding disbursement document, according to the National Association of Realtors. I would sure get to the bottom of that.

If the only “proof” the agent/buyer can provide you is a copy of the CD, it sounds like you are being defrauded. As you probably know, your half of a 6% commission on a $200,000 home would be $6,000, a significant sum, let alone the full $12,000.

Has the buyer’s agent done anything for you?

I also wonder what this agent has done on your behalf in her self-assumed dual role. Handle paperwork? Negotiate or bring competing offers for you? My guess is a big “no.” All she did was dial your number and now she wants a hefty check from you.

I bet the agent also told you such a commission arrangement is standard, which really means an industry or agency average. The notion that a seller is automatically obligated to pay any commission is a fable, even though sellers do pay the commission more times than not. Commission is always negotiable.

If it turns out you never agreed to the commission, here’s what you should offer the agent: Zip. Bupkis. Nothing. If you really need to exit the house quickly, you might offer her a flat fee equivalent to 1%, assuming she walks you through the paperwork. She’d still pocket 4%, assuming the buyer pays the other 3%. But she really has earned nothing from you in any case.

Good luck!

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