The agreement of purchase and sale is signed, whew! But unfortunately that is not all the forms you need to fill out…you are on to the next form, The Confirmation of Co-operation and Representation. What is this form about? Essentially, this is how your Realtor gets paid. So you are signing a form that shows you who is representing whom. In most cases, it will be a Listing Brokerage representing their client, the seller, and the Cooperative Brokerage representing their client, the buyer.
However, there can be a couple situations where you are in a multiple representation. This is not to be confused with multiple offers. Multiple representation can occur in a number of different ways. One is where the Brokerage, the Real Estate company, is the same for both the seller and the buyer. So in essence, two colleagues of the same brokerage each have clients that are working on the same offer, one is selling the home and the other is buying the home. The second situation would be the Listing agent is representing both the seller as well as the buyer. In this case the buyer is not a client but a customer. It is essential that the buyer is aware that they are in multiple representation and knows what that means. This goes back to my first blog in this series. The Realtor is working for the seller and not the buyer at this point and therefore can’t divulge possible pertinent information for the buyer to make an informed decision.
Now that you know who is representing whom, the next part is where your Realtor tells you what the commission is that they will receive. The commission is based on what the Seller has agreed to pay. This could be anywhere from 6% down. Generally, the commission is split equally between the two Realtors and this is paid out only after the house closes. Funny enough everyone thinks Realtors are paid as soon as the ink dries on the paper but there are so many variables in purchasing a home that we don’t get paid until the lawyer hands over the keys to the buyer.
Are you finished yet??? Well if this was not your first time putting in an offer then I would say YES…but since you are a first time home buyer, no…you have a few more forms to sign…saving those for the next blog, check back next week!!