Basic accounting question - paying a real estate agent a bonus

[Nir]

Hello,
How, technically, would you pay your real estate agent a bonus, say 0.5% of the purchase price? simply prepare a receipt showing that amount, pay him and have him sign the receipt/document? (assume it is not part of the contract, just a word I gave him about it and plan to pay obviously) THANKS.

 

[RedlineBrett]

QUOTE (investmart @ Jan 9 2008, 04:11 PM) Hello,
How, technically, would you pay your real estate agent a bonus, say 0.5% of the purchase price? simply prepare a receipt showing that amount, pay him and have him sign the receipt/document? (assume it is not part of the contract, just a word I gave him about it and plan to pay obviously) THANKS.

I would ask your agent how he wants to arrange it... He may have restrictions and extra documentation for you to sign in order to stay on par with the requirements of his brokerage. In Calgary clients have to sign off on the compensation amount on the listing contract but when purchasing property they only have to disclose that they are being paid by the listing brokerage in the transaction.

So, if he helped you purchase property and represented you as a buyer agent he may well need you to sign off on a specialty form. Best to have him do the running around to prepare it and bring it to you for your review. You could use that as a reciept or ask his brokerage to prepare one for you.

 

[navaz]

Paying by cheque after closing works -watch GST issues- is that plus GST or included?

 

[GarthChapman]

I would think if you pay him a voluntary bonus that GST would not apply. And your cheque is your receipt.

 

[navaz]

Nope -cause what is stopping you from saying the commission is negotiated to $500 and the bonus is $10K