Non-MLS deal, who pays broker commission?

[Tyson Hosey]

So, I'm purchasing a property from another investor off market, and the agent is representing both sides of the deal. He had a seller who needed a buyer for his property and I came in as a buyer needing a property. Before we went under contract he sent me a Compensation Agreement to sign saying that I would pay commission on the transaction.

I'm a newbie, to be fair, but I've never heard of a seller paying commission and I've talked to an experienced Real Estate Agent who said in 10 years she's never had a buyer pay commission.

I don't want to offend my agent (who currently manages one of my rental properties), but I feel like this isn't standard. Should I walk away? Should I pay it to maintain the good working relationship? Am I getting the wool pulled over my eyes or just not understanding how the process works?

[Dawn Brenengen]

In off market properties I brought my clients, my buyers have usually paid the commission. Since it's not listed in MLS, the seller has not offered any compensation to buyers' agents right off the bat. So, the buyer pays it as a closing cost or the sales price is increased to include it.