OpinionIndustry News

Home sale commission financing would benefit all

Perspective: Savvy lender should step up to buy-side opportunity

The time has come for mortgage companies to rethink their prohibitions against home buyers being able to finance the buy-side of the real estate brokerage sales commission as part of the home-buying transaction. Bans against such financing exist because the realty commission is not part of the asset value of the property and is not a contractual obligation of the buyer, and thus, in theory, shouldn't be included in the buyer's financing. However, the ban against buy-side commission financing distances buyers from their own brokers, creates conflicts of interest and perpetuates a split system that's a detriment to real estate. The seller's payment of the brokerage commission, and particularly the buy-side portion of that amount, exists mainly on paper since it is the buyer, not the seller, who brings to the closing table the funds from which the commission is paid. The seller selects the listing broker, negotiates the commission and signs the listing contract, but the selle...