The Commission Disbursement Form

There are many tips to a smooth closing, and one of the most important to Real Estate Brokers is how to receive proper payment of commission at closing. 

Here are some things to remember:

  • Escrow does not receive the listing agreement.  We only know the amount and split of the commission based on the commission disbursement instructions we receive.  This may sound very simple but it is not always the case.
  • The commission disbursement forms sent to escrow should be clear and note any credits or other exceptions in a clear manner.  If something doesn’t look right, the escrow officer will call you… but don’t leave your commission to chance.  If you review the HUD or closing statement prior to closing and notice anything strange about the commission call your escrow team.  Make sure the information they have matches the agreed upon commission amount. 
  • If there are any addendums reflecting changes in the commission be sure to get them to escrow as soon as possible.

On a recent transaction, escrow was provided a poorly written Commission Disbursement Form and the seller was overpaid by $16,000.  The agent is frantic and the seller is not cooperating.  Unfortunately this happens quite often.  We only know what is in writing and it needs to be clear.  As a conscientious Broker, you review the Purchase & Sale agreement carefully to protect your client; be sure you review your Commission Disbursement form carefully too!

Once the transaction closes and funds are disbursed, it is difficult to make any changes.  Protect your interest and take a few extra moments to review your commission - you have worked hard to earn it!