"Protecting" broker fees

Have noticed this phrase used a lot on many firm websites (we buy off market and will protect brokers fees). Does this essentially mean the buyer will pay the commission to the broker bringing them the opportunity? Isn't common practice for seller to cover the fee? Is there a specific reason why a seller would not be willing to cover the broker fee, outside of being a dick?

Optically, I know a lot of buyers who don't want to pay fees on their side of the ledger simply because you cannot finance the fee through debt. Sometimes it's because the buyer is also a dick and it becomes a pissing match over which side will pay.

Anyone here have a method to dealing with?

 
Best Response

I'm a broker so this might come across one sided. There are a few reasons why a website will say this and I'll try to give an example or two from the brokerage side as to why we want our fee protected.

Let's say I'm a broker, going about my normal business and uncover a property that the owner would be willing to sell, for a reasonable price, but is uninterested in actually putting it up for sale and do not want our services. Lets say you're an institutional buyer and this property fits the bill perfectly for you. As an institutional buyer, you don't really need my help on the closing and don't necessarily need me looking for a property for you, but will send you anything that might fit. Since I cannot get a listing agreement with the seller, I can at best hope for a commission agreement from them, basically saying they'll toss me a few points give or take for finding the buyer. In the event that they don't let me do a commission agreement, by "protecting my fee" (saying you will give me a couple points give or take) I can still bring the deal to you and you can get access to deals that other can't.

To answer your question, technically, the buyer does pay the fees in a normal transaction, they're just included in the purchase price.

 

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