Integrity of Closing – Who Cuts the Check?

Closing a sale on a property is a complicated, many-headed beast. What works for one Realtor may not always be the best-case scenario with another. And when it comes to commission checks, you want to lock down specifics on as soon as possible.

Who Cuts the Commission Check?

There are exceptions to this rule, but traditionally the title company that is closing the seller of a property cuts the commission checks for both the selling and listing agents. This is the case for practical reasons: the selling party has all the pertinent information already on hand, and once the closing proceeds, all the minute details have already been cemented by all parties involved.

Are There Exceptions to the Rule?

Yes, as in any situation, there are some alternative routes that follow legal procedures and are agreed upon by all parties. In some cases, for example, a title company representing the buyer will try secure the check early to make their agent happy. This is generally done to keep an agent close to the title company, and of course, they want to take care of their agents. In this case, the title company representing the buying agent will call the seller’s title company and confirm that they can go ahead and disperse the check. And, generally, that’s not an issue.

When Does It Become an Issue?

As in every step of the closing process, all responsible parties must do their due diligence to avoid any miscommunications or serious missteps. The last thing a title company wants to do is cut the check, the property doesn’t get sold, and they have to ask for a check back from the Realtor. So, they want to be sure they have a copy of the settlement statement, the deed, etc. as soon as possible. Another issue would be simple miscommunication of the actual check amount. If an agent is distracted and remembers “commission was 40/60,” but it was actually 50/50, then again there might need to be some reallocation of funds. All-in-all, remember that communication is key, and rushing the process can have its pitfalls.