Q: Who pays the brokerage fees/closing costs? Buyer or Seller?
A: There are different customs in different states, but here in Florida, the Seller typically pays a commission or brokerage fee to a listing agent to advertise and market their home for sale. The listing agent then often splits or offers some portion of that brokerage fee to a participating Buyer’s agent who brings a contract. Therefore the Buyer does not typically pay their Realtor a commission, although some do charge an admin or “transaction” fee to the Buyer.
As far as other closing costs go, it depends upon what the Purchase Agreement states as to who pays them. In a cash sale, a Seller might only have minimal closing costs such as recording fees and state taxes, and a Buyer might have fees from the title company – again this depends on how the contract was written.
If a Buyer is getting a mortgage, there will be additional closing costs associated with the loan that the buyer is responsible for. Sometimes Buyers do ask for help from the Sellers with their closing costs. The Seller is not obligated to assist but many do, depending upon the circumstances.
Often we see what is called “rolling in closing costs.” Here’s how that works. Let’s say a home is priced at $200,000. The Buyer knows the home is priced well to begin with, and want to make a strong offer so no one else gets the home, but they need closing cost assistance. Let’s say they need 3% of the purchase price, or $6,000. They could offer $206,000 for the home with 3% closing cost assistance, thus rolling in the costs in their loan. The only catch is that the home will have to appraise for $206,000 or the lender will not issue the loan.