When it comes to buying or selling real estate, one important aspect to consider is the commission agreement between the seller and their real estate agent. In the United States, the most common commission agreement is known as the FAR/BAR commission agreement.
FAR/BAR stands for Florida Association of Realtors/Florida Bar. The agreement was created by these two organizations to standardize real estate contracts in Florida. While the agreement was initially created for Florida, it has since spread to other states as well.
Under the FAR/BAR commission agreement, the seller agrees to pay the real estate agent a commission for their services. This commission is typically a percentage of the sale price of the property. The commission is paid at the closing of the sale, when the seller receives the proceeds from the sale of their property.
The commission is typically split between the seller`s agent and the buyer`s agent. The amount of the commission can vary depending on a number of factors, such as the type of property being sold, the location of the property, and the experience and reputation of the real estate agent.
One of the benefits of the FAR/BAR commission agreement is that it is a standardized contract that is widely recognized by real estate professionals. This can help to prevent disputes and misunderstandings between buyers, sellers, and their agents.
However, it is important for sellers to carefully review the terms of the FAR/BAR commission agreement before signing it. Sellers should make sure that they understand the commission structure and any other fees or charges that may be associated with the sale of their property.
In addition to the FAR/BAR commission agreement, sellers may also be responsible for other costs associated with the sale of their property, such as closing costs, title insurance, and property taxes. It is important for sellers to have a clear understanding of all of these costs so that they can accurately estimate their total expenses and potential proceeds from the sale of their property.
In conclusion, the FAR/BAR commission agreement is an important aspect of the real estate buying and selling process. It provides a standardized contract that can help prevent disputes and misunderstandings between buyers, sellers, and their agents. However, it is important for sellers to carefully review the terms of the agreement and understand all of the costs associated with the sale of their property.