House Closing Question?

[Seller909]

Hi
When lawyers process paperwork for a house closing, do they pay out the %commission based on the Listing Agreement? Just curious how the logistics of payment work, how the bank gets paid from a sale and how funds are distributed to bank and realtors? I'm trying my best to understand the whole process so any help here is really appreciated.

Cheers,
Bobbi

 

[Matt Crowley]

Basically, you (the seller) gets paid last.

The purchasing and selling lawyer will send the paperwork to each other basically setting out the proposed Statement of Adjustments. 99% of the time you won't even hear from your lawyers when there are doing this and most lawyers are not going to do something unethical just because they are working with a sneaky buyer / seller. The bank will release funds based on the agreement between the lawyers. Those funds are deposited into the purchasing lawyer's trust account and the disbursements are made based on the signed agreement between the lawyers that the title will be transferred once these payments are made.

If you are really interested in this topic, some interesting material to read is on Title Insurance. You can do a search on MyReinSpace or just check out the web. There are some things this sort of insurance will protect you from.

In some cases, you can purchase property with some encumbrances, liens, or caveats. You can also purchase property after rent normalizations and there are some complications with issues like these. Generally speaking, getting into these kinds of issues should not be considered for your first few properties. Buy something with a free and clear property with a valid RPR.

 

[Seller909]

So the selling realtors get paid from the lawyers trust account, then, right? So, in order for the lawyer to do that, they would need to have a copy of the Listing Agreement which specifies the commissions - or is there some other way they figure out how much to send to the realtor? This aspect is what I am keen on finding out more about. Thanks!!

 

[Sherilynn]

The realtors communicate with the lawyers. The lawyers' contact info is listed on the purchase contract.

 

[Thomas Beyer]

When lawyers process paperwork for a house closing, do they pay out the %commission based on the Listing Agreement?

Seller's lawyer pays the seller's realtor from money in his trust account, based on the listing agreement signed by the seller and her/his realtor. Seller's lawyer also pays out the existing mortgage (if any) from the trust account.

how the bank gets paid from a sale...

The seller's lawyer's trust account's money comes from the buyer's lawyer's trust account, and that money is usually a combination of cash from buyer and the new mortgage arranged by the buyer.

 

[Seller909]

Seller's lawyer pays the seller's realtor from money in his trust account, based on the listing agreement signed by the seller and her/his realtor. Seller's lawyer also pays out the existing mortgage (if any) from the trust account.


The seller's lawyer's trust account's money comes from the buyer's lawyer's trust account, and that money is usually a combination of cash from buyer and the new mortgage arranged by the buyer.

Thanks Thomas.