real estate

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Give and get advice on buying a home, mortgages, insurance, and home improvement.

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Monday, November 05, 2007 11:53 AM

Who pays the real estate agent fees?

The seller. Yay, the one bullet you dodge as a buyer! When a house is put on the market, the sellers usually sign a contract with a real estate broker -- fees are typically from 3- to 6% of the purchase price -- to take care of advertising, showing the property and negotiating with the buyer.

What if you’re the seller? You’ll be handing over a large sum of money to this person, so you want to shop around to find an agent you like and negotiate the best possible deal for yourself. And be aware that the business is changing all of the time, especially because of the Internet. Realtors and real estate agents used to deal only in exclusive listings, but now with web-based databases and other multiple listing services, you can sign non-exclusive deals for lower rates.

When you’re the buyer, you can go to any broker -- or all of them -- and they can show you properties in your area free of charge. Even if your want to stick with one preferred agent and that person doesn’t have an exclusive listing on a particular place, he or she can probably get you into see anything available. Agents tend to work out deals among themselves to split fees if they bring each other business.

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Comments

re: Who pays the real estate agent fees?

My .02

The seller definitely pays the commission, but there is one important cost that was not mentioned- in the majority of sales there is a "co-op" agent, another agent often from another company that brings the Buyer to the table. In those instances the commission is usually split in half between the Listing agent and the Buyer's agent. This comes right off the top, before any of the Listing agent's operating costs are accounted for.

I really appreciate the fact that "Realtor" and "real estate agent" were made separate and distinct. There is a HUGE difference between the two. Agents merely have a state issued license to conduct real estate transactions. Realtors are held to a higher standard at the very least due to the Ethics Code that we not only promise to uphold, but must also take education awareness courses on every few years.

As for non-exclusive agency, no professional real estate agent would work without an exclusive agreement of some kind. This applies to any professional actually. Ask yourself this question- would you go to work for someone who may or may not decide to pay you later? And in fact, after all of your hard work they may pay someone else instead? Perhaps you know someone who would do that, so then ask yourself this- how motivated would you be to work for someone who may or may not pay for your work? And lastly, why would anyone want to hire someone with no motivation to work hard for them?

And why do we throw in our $.02, but we are only offered a penny for our thoughts?

Posted by malanoza    Saturday, February 02, 2008 9:16 AM


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