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hey everybody Dana sparks Broker of maximal in Greater Atlanta Realtors and this one's contract tip has to do with the Commission instructions that that is the contract for the Commission between the listing broker and the selling broker and the form that the closing attorney needs so that the closing attorney knows what commission to put on the closing statement for which broker so in general well let me just go over the forms and then we'll talk in general so on the draw form it is gar form F 32 instructions to closing attorney and this is the form that you fill out well okay I am gonna start the in the general let's think about it where does the Commission start the Commission starts from the seller the seller is the one that initiates all the Commission in a real estate transaction so where is this all contracted for and spelled out on paper the answer is in the listing agreement so the seller agrees to pay the listing broker the total amount of commission for that sale for when that property closes and when that transaction closes the seller pays the listing broker the total amount of Commission then in the listing agreement it has a place where the seller and the listing broker agree that the listing broker will share a certain part of the Commission with a selling broker should that selling broker be the procuring cause of sale for that transaction again that is all spelled out in the listing agreement any other modifications or changes or additions or contingencies to that Commission need to be written out and agreed upon between the seller and the listing broker for example what is to happen if there is not another broker or another agent involved in the transaction is there any difference in that the seller will pay the listing broker what is to happen if the selling broker doesn't accompany the buyer to the first showing all those kinds of things that you see advertised in MLS that really needs to be agreed upon between the seller and the listing broker and spelled out and signed in the listing agreement so that's where all the listing that's where all the Commission begins then at closing the property closes the transaction closes and all the commission goes from the seller to the listing broker and then the listing broker is the entity or the party that pays the selling broker the Commission so that is all contracted for in a separate form called instructions to closing attorney in the GAR form package and commission acknowledgement in the re forms package so we'll get it to MLS in a minute but basically the seller does not pay the the buyers brokerage Commission that Commission comes from the listing broker so you guys use selling brokers especially y'all need to fill out these Commission instructions and get it in writing how much money the selling broker is going to make should they be the procuring cause of sale for a transaction that is listed by a listing broker and listed in the MLS service now just since we're kind of on this topic where is it contracts oh so the Commission is between the brokerages it doesn't have anything to do with the actual buyer or the seller now just think about it you as the agent where is the contract where it talks about you as the agent getting paid Commission it's not in the instructions to closing attorney it's not in the purchase and sale agreement it is and it's not in the buyer brokerage or in the listing agreement it is in your independent contractor agreement that you sign with your broker that's where it's all right now and that's the contract for how you get paid your commission all the other commission coming from the public goes to the actual brokerage so it's very important especially you selling agents to complete the instructions to closing attorney and make sure that you get that signed off by the listing broker because that's where you contract for payment so in the GAR form it is Garf form f32 instructions to closing attorney and basically you put in the buyers name in the seller's name and it has for the purchase and sale agreement dated now you'll notice it doesn't reference a binding agreement date you selling agents y'all should prepare this and send this at the same time you send an offer now it's not part of the offer because the offer is to be signed by the public seller in the public buyer but you should still prepare it and set it in two separate packages one package goes to the listing agent that the listing agent can then present to the seller the other package or attachment is just the Commission instructions that go between you guys's agents as affiliated licensees with your brokers but that's why it references a purchase sale agreement dated not necessarily a binding agreement date and then it has the property address and then it says the undersigned listing broker and selling broker hereby can confirm that the real estate Commission's to which they will be entitled upon closing of the above reference transaction and direct the closing attorney to pay these amounts at closing from the sale proceeds then it has paragraph 1 Commission's paid by stellar and under 1 it has an A and a B commissions paid by seller the total real estate commission be paid by the seller in this transaction is and then you either put a percentage of the purchase price or you can put a flat fee then paragraph 1 B says the listing broker agrees to share the Commission with the selling broker by paying the selling broker the following it is the percentage of the sale price or a flat fee so when you're looking at this form paragraph 1 a and B the nut the percentage or the flat fee number in paragraph 1 a must be larger than the amount in be because the amount in a is the total Commission that the seller agrees to pay the listing broker and then the amount in B is the percentage or the flat fee that the listing broker pays the selling broker so if those two numbers are the same that means the listing broker is not getting paid for this transaction so again Commission's paid by the seller that 2a is the total Commission and then B is the is the part listing broker fing selling broker should be a lower number and then paragraph 2 is Commission's paid by buyer if there's the situation in the transaction where the buyer is actually paying Commission 2 for example if the buyer is paying Commission based on the buyer brokerage agreement then that goes in paragraph 2 commissions paid by buyer in addition to the sellers total Commission the real estate commission to be paid by the buyer in this transaction set forth below and then it has buyers total Commission and then the selling broker agrees to share the Commission with the listing broker so it's just backwards but again paragraph 8 2 a should be a larger number than paragraph to be Nina has general terms and it says neither broker shall have claimed for commission against the other broker if it doesn't close and paragraph 3 be under general just as notwithstanding the above unless otherwise specifically provided for here in the signing the agreement doesn't waive or limit the rights of the selling broker or listing broker to challenge after closing either the entitlement to or the amount of commission paid or not me what that means is if there's any commute discrepancy over the Commission's amounts that is not a reason to hold up closing the parties still close and then the brokers deal with any Commission disputes after closing then on the next page of the GAR Commission instructions to a closing attorney it says further directions to the closing attorney and this is where if any either of the broker is giving a rebate to one of the parties a commission rebate or purchasing something from their Commission for one of the parties for example a home warranty or so forth or so on um this is where all of those fees are and rebates are identified and again under paragraph for further directions to closing attorney and it's broken out into listing broker and selling broker listing broker selling broker in their respective affiliated licensees hereby direct the closing attorney to disclose on the settlement statement for the above reference transaction the following referral fees and rebates they have or will be paid or have received or will receive and sub transaction and then that's where you spell out the fees and the rebates then there is a small space for the special stipulations and then the signature on this page again is the affiliated licensee of the listing broker and the affiliated licensee of the selling broker the actual public the buyer of this are do not sign this as it's just a contract between the brokers the re forms document is re1 1/5 Commission acknowledgment and it is conceptually the same ideas you feel in a date and you identify the buyer and the seller and the property in the date of the offer and then again it says whereas the seller has agreed for the terms of a separate listing brokerage agreement to pay a real estate commission to the Commission to the undersigned sellers broker and then sellers broker agrees per the terms of the listing agreement so it references anything that was in the listing agreement shall share the Commission with the undersigned buyers broker and then the same thing you fill out what the sellers broker gets and what the buyers broker gets now in the re forms it is a little bit different this is the total Commission the gross Commission going to the sellers broker and to the buyers broker so it's not like that one where so in this one the numbers could be the same and then it has additional credits and debits for the closing attorney to put on the settlement statement again regarding any rebates referral fees so forth and so on so that is all spelled out as well as any funds to be dispersed to a bini for example seller to pay such and such company at closing this amount that would go on these set of on the commission acknowledgement for the instructions so that the closing attorney knows how to prepare the the closing statement and again this form is signed by the selling broker by the listing broker and the buyers broker now what that means so that is where you actually get signatures to contract for the commission so what happens if you don't have that well in general an article from Seth Wiseman states that a property that we are a co-op we we share commissions because we cooperate the broker just cooperate with one another and listing in an MLS service does constitute a contractual offer to cooperate with all the members of that MLS service and to pay them a specified commission if they are the procuring cause of sale but if a property is not listed in an MLS service then there is no but if it's not if a property is not less than MLS for example a for sale by owner or for example new construction that is not yet required to be listed in MLS which is basically up until the point of drywall if it's not in the MLS service then the financial basis for a listing broker to pay a selling broker must be agreed upon in a separate contract which would be what we just talked about so if a property is not in MLS there's no guarantee that the there's no agreement that the listing broker is required to pay the selling broker a commission without something in writing so a couple things couple things um if a stellar has signed a listing agreement with a broker and the broker is in is a member of an MLS service and the property is in a coma whole Surrey area of that MLS service there is still a that is still the contractual offer to cooperate with members of the MLS service in this fast market even though it's not you know they're selling rather quickly the that would govern that but regardless of that you guys don't leave it up to that get your commission in writing get the contract signed between the brokerages so again you can use it for properties not in the MLS service you can use those two documents we talked about before the instructions to closing attorney in the Commission acknowledgement gah gar the George Association of Realtors has another form and it is formed f38 co-op commission agreement to be used prior to showing this is a form it has the same verbage it's not for a it's not for a closing attorney because it doesn't have any of the fees or rebates but this is a form just signed between the listing broker and the selling broker and it says you just identify the property and it says for and in consideration of $10 and other good and valuable consideration the receipt is efficacy of which hereby acknowledge the undersigned listing broker and selling broker hereby confirm the co-op commissions to which each will be entitled upon closing of the above reference property and then again you put the commission paid by the seller and the commission paid by the buyer and it says the listing broker agrees to share the commission paid by the seller with the selling broker by paying the selling broker the following blank percent of the purchase price or flat fee commission paid by the buyer the selling broker agrees to share the commission paid by a buyer with the listing broker by paying the listing broker the following so again this form is a little bit different and it is designed to be used prior to showing to make sure before you show a property if it's not in an MLS service and there is no contractual offer to cooperate that you do get a contract to cooperate and share the Commission so take a look at that form and then just before we leave this topic a couple of other issues in the re forms the only Commission form is that Commission acknowledgement which is our e form one one five gar has those two forms that I discussed I'm sorry there's another one in the RT forms gar also has a separate leasing commission confirmation agreement so if you are an agent representing a tenant in a lease situation you are going to want to use this form the gar form is F 37 leasing Commission confirmation agreement easy for me to say and the re forms also have a leasing commission agreement and that is already formed 125 leash lease commission acknowledgement and then the only other additional form that gar has is CF 16 and it is a commercial lease commission assumption agreement so you want to take a look at that if you deal in commercial leases so again just a brief tip about the Commission instructions and how to get them signed and who signs them and I hope this contract tip helped you out thank you so much for watching Davis Parks Broker of maximum loan Greater Atlanta real terms satisfying your needs with service innovation and education you