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Add Concession Agreement Template mark

hi everybody Janus Forex broker of maximum on Greater Atlanta Realtors and this week's contract tip has to do with giving a commission concession back to your client or one of the other parties in the transaction is it allowed may you do it and how do you write it up well the answer is yes it is allowed and it is contained in the body of license law under handling transactions which is real great real estate rule Gregg rule 520 - 1 - point 10 6 and that's the section under disclosures of commissions fees rebates or other valuable consideration and so basically what license law says is a licensee may rebate any portion of their of the any part of the Commission a fee or any other compensation received in relation to that transaction as long as the rebate is disclosed on the closing statement and as long as that rebate or that fee does not mislead any of the other parties that can mislead the lender the closing attorney or the other principal regarding the source of the funds or that's needed to complete the transaction regarding the financial resources or obligations especially of a fire principal so what does all that mean well it must be on the closing statement that means you cannot rebate part of your Commission back to a buyer or a seller after the deal closes it is a license law violation at that point however you may do it as part of the deal and again if you are working with the buyer even if you are a listing broker giving money back to a buyer it must be it must get lender approval because there are depending on the type of loan that the buyer is getting in the downpayment they're putting in the amount of concessions to that buyer are potentially limited so you need to make sure that it is okay okay by the lender and then additionally it says you can't mislead any of the other parties regarding the source of funds needed to complete the transaction the other part in ocg a forty three - forty - twenty five paragraph B six where it's talking about payments to another broker those must may be made in advance on pre-established terms in a brokerage engagement so in other words if this is a if this is something that you're doing as a business practice for example if you buy with me and sell with me I'll rebate a portion of your of my commission back to you on the second transaction or something like that that really needs to be disclosed in the buyer brokerage agreement and then again it must be on the closing statement but regarding if you are if you s and as an agent are giving a concession of your commission to make the deal work as negotiations have gone along or if you are agent principal and the Commission that you would have received having been the agent portion of the agent principle you want to use back in the deal that can be done as long as it is disclosed and again it must be done on the on the closing statement but be careful how you word it because when you join a brokerage you are an affiliated licensee of your broker all contracts are written in the name of the broker all buyer brokerages are in the name of the broker all Lifting agreements are in the name of the broker so when you're talking about Commission who does the Commission belong to at that point it belongs to the broker so anytime you're talking about a commission concession you must talk about listing brokers Commission selling brokers Commission so forth and so on and just parenthetically this is true too if you are offering a a bonus it wouldn't be a selling agent bonus it would be a selling broker bonus because the Commission's are paid broker to broker so number one you would put verbage on there that selling brokers Commission or X amount of selling brokers Commission to be used as a buyer credit at closing so forth and so on if you check specifically with your broker or with a closing attorney and another broker if you're not with maximum one regarding the specific verbage we'll be more than happy to help you out with that again it must be must be referred to as broker commission number one and then typically the lender and the closing attorney may require a permission letter from the broker because it is brokers commission that the broker is allowing you as the licensee as the agent to concede that commission or part of that commission in the deal towards the buyer or the seller so you the permission letter typically check with the lender and the closing attorney the other thing when you write it up is if you are writing it up that it goes specifically towards a buyers closing costs you need to be careful and pay attention to the contract that you are writing this this under the contract that the parties you're binding under for example if you guys are binding under the GAR contract form in that purchase and sale agreement the closing costs are very very specific and they are specifically spelled out what a concession to closing costs looks like what that specifically goes for and any unspent sums the buyer doesn't necessarily get to use that if you are writing a con checked in your binding under the re forms the paragraph where it talks about concession to closing costs that is much more open-ended it says closing costs that can be used by the lender and then it says and any additional basically any additional expenses by the buyer merely at the discretion of the buyer so be careful if if the if your intent is to give X amount to contribute X amount of dollars from your commission to be used in the deal don't limit it by talking about a specific term based on the contract that you're under and the other thing that you will want to do is you will want to make sure that it gets written up on the instructions to closing attorney and on the second page of this I've done a whole separate video on the instructions to closing attorney and how you get paid your commission so I'll put that link below but on the second page where it says under the GAR form and these are f/32 instructions to closing attorney further directions to closing attorney and this is where you would write out and describe the fees and rebates that which broker is conceding to which party so I hope this contract tip helped you out thank you so much for watching please subscribe for more contract tips and this is Dana sparks Broker of maximum one Greater Atlanta Realtors satisfying your needs with service innovation and education you