Hey everyone! It’s Austin Solomon, The Solomon Group, over at Coldwell Banker. Coming to you guys live with an episode of The Real – Wausau Real Estate Show.
Today we’re talking about – Does it cost you anything to have a real estate agent help you buy a home? We get this question a lot and the short answer is no.
In most or nearly all instances, the seller of a home will take care of paying the commissions for the agent involved in the transactions.
How it works is when a seller highers an agent to list and sell their home, they agree to pay a commission and that commission is typically split between the listing agent, the agent working for the seller and the buyer’s agent, which is the agent that brings the buyer.
So the good news for you, if you are a buyer, is if you hire an agent to help through the process, it doesn’t cost you anything.
Now, there are a few catches or a few instances where a buyer may have to compensate a Realtor and these are good things to know.
So, let’s go back to our example, a seller hires an agent to list and sell their home and they split that commission. What if the seller doesn’t have an agent? What if they post the home for sale by the owner or they try to sell it on their own?
In that case, there is really no agreement. So if you see one of those For Sale by Owner signs in the yard or you go on Zillow and it says For Sale by Owner. There is really no agreement for that seller to compensate a Realtor.
In that case, if you have hired an agent to be your representative and you’ve worked out some sort of agreement and you have that in place, then a lot of times there is a provision in that agreement that says, hey what happens if there is a For Sale By Owner or a private sale, what happens?
A lot of times as agents, we may know about sellers that are thinking about selling or we may see a For Sale by Owner and we may want to bring that to our clients as well and so a lot of times that’s a common way to do it. What happens though?
A lot ot times what happens, in that case, is the buyer’s agent can still bring a buyer to a For Sale by Owner and what they’d ask the seller to do is to compensate the office agent directly.
It’d be something like we will take care of the services but we want you to compensate our office for the services and that’s a very common thing that happens. Now on the rare case, the seller might say, I’m not paying you guys anything and it’s happened a few times out of the 750 deals I’ve done.
I think there has been a few times where that’s been the case and then a buyer has to ask, does it make sense to buy this house and compensate the agent directly.
So in short, in a For Sale By Owner, if the owner is like, “We are absolutely not paying any Realtor fees”, then the buyer may have to compensate that agent. Then the question is, does it make sense for me to buy this house and pay the real estate agent, if the answer is no, then it’s probably not the right house.
So that’s the one case where the buyer may have to pay their agent. One other area, as long as we’re on the topic here, that I thought I’d talk about is – what if there is just one agent involved.
What if the buyer goes directly to the agent that listed the home? The sign is in the yard and they go directly to that agent. They want to buy that house and they aren’t bringing an agent, they say they’ll go through you and a lot of times buyers think they’ll save money by going through the agent that has the home listed for sale.
And in some instances, the buyer may think they are saving money by not bringing an agent, but in most cases the commission that would have gone to the buyer’s agent instead goes to the listing agent, and there really isn’t any savings.
There could be a case where, in some odd cases, the listing agent, if there is a small discrepancy or small amount that keeps the deal from coming together, the listing agent might chip in or bridge a gap in negotiation to help all the parties work together. But most of the time that doesn’t happen.
I guess the logic here is if you think you’re going to go through the listing agent to save money, that most likely is not the case. So I just wanted to talk a bit about that.
So getting back to the summary here, summarizing this episode in 15 seconds or less. Does it cost you anything to have a real estate agent when you’re a buyer, the answer is no. Probably 99% of the time the answer is no. There is one case when it could, but again, when you’re talking to your agent and explaining how the process works, that’s when you want to talk over those pieces and make sure everyone is on the same page for those pieces for that one exception.
Thank you guys for tuning into this week’s episode of The Real. We will catch you on the next episode.