Broker Gets Commission At Closing
REM #F755
By Ilyce R. Glink
Summary: A ThinkGlink reader is wondering if brokers get the commission back at the closing when buying property for themselves. Ilyce explains that the broker essentially gets a discount when buying property.
Q: It dawned on me today that licensed brokers, when purchasing properties
for themselves, could act as both buyer and broker, and thus receive the commission
as extra cash back at closing.
Is this common practice for brokers? It seems like a good idea to me, but I'm totally new to this stuff...
A: Real estate agents are often active real estate investors because they’re in a position to see a great piece of property almost before anyone else. And then, yes, they will get their share of the commission back at the closing.
This is akin to buying great property at a slight discount, typically 1 to
3 percent (which is the agent’s share of the commission, depending on
the split between buyer broker and seller broker, and then between the brokerage
companies and the individual agents.)
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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