At the recent GAR Brokers / Managers Conference, one of the most hotly debated issues concerned whether or not real estate sales commissions should be put (back) into the standard Purchase and Sale Agreement.
Years ago, there was a paragraph in the Agreement laying out exactly how much commission each broker would receive at closing. During negotiations, though, buyers and sellers sometimes scratched out the commission and inserted (you guessed it) a lower amount “in order to make the deal work for them.” (GAR removed the commission from the Purchase and Sale Agreement almost a decade ago, so don’t feel bad if you can’t remember this.)
A lawsuit is working its way through the appeals system which may affect whether brokers can successfully sue for commissions when a buyer or seller defaults on a closing in spite of the current language in the GAR contract, the Listing Agreement and the Buyer Brokerage Agreement.
So here’s my question for you: Would you be in favor of putting the commission directly in the Purchase and Sale Agreement? Why or why not? I want to hear from you!