Over 90% of home-buyers search online (at least at some point during their house hunt). With the Internet, and your ability to search online, how does a Realtor factor in? Can you save on commission? Who is it who pays the commission … and who is it who determines the amount of commission?
Professional ‘fees’ are determined by the seller, at the time the house is listed for sale. Whatever the commission “amount” or percentage can and does vary from one property to another, based on the agreement between seller and his or her listing broker. It is the SELLER who determines the commission amount… and that commission comes off the seller’s side of the closing statement.
But who really pays the commission? … Is it the buyer or the seller? The commission comes off of the sales price… It comes from the sellers side of the closing statement… And the buyer pays the purchase price. So the short answer is that really both have a hand in paying the commission.
And as the buyer then, do you need an agent to represent you when you purchase a house?
There are a few reasons for hiring a buyer’s agent, and perhaps a few for not doing so … and many of the the reasons FOR HIRING A REALTOR aren’t apparent until you have some sort of a hiccup. And at that point, if you don’t have a really good agent, you may wish you did!
Every buyer (and every purchase) is unique. Some buyers need lots of preliminary guidance, and information. Others have a very clear idea as to what they want and what they can afford. You may need information as to schools, neighborhoods, transportation…. You may want a comparable market analysis of closed recent (relevant) sales, and fair market value. You may want an abundance of input, and you may be anticipating submitting several offers before you settle on just the right house for you and your lifestyle. You may need help negotiating offers and terms, direction during the due diligence period, and with inspections, financing contingencies, making sure you have the right to back out or cancel if there are red flags that come up, and you will want to make sure your earnest money deposit is protected.
Commission is generally a percentage of the contract sales price. Since you are paying for the house, I would say that you are in fact, effectively “paying the commission” … but it does come out from the seller’s side of the closing statement.
As the buyer, your agent represents YOU… not the seller. YOUR Realtor prepares the offer and negotiates the purchase terms on your behalf … It is YOUR Realtor who will represent you and look after YOUR interests. Your agent gets paid only after you buy the home…and close on the property.
Due Diligence: You have a tiny window of time in which to do your due diligence. Within the first 10 -12 days after having a fully executed contract, you need to apply for a mortgage, and do your inspections (as stipulated in the contract). You want to determine whether there is any reason to cancel your contract and walk away… That very brief time-frame in which to do your research and bail if necessary (or renegotiate the contract in some cases) is one BIG reason for having a Realtor represent you … Time is of the essence in any real estate transaction, and if something arises during inspections to counter-indicate buying the property, you want to be able to cancel your contract, get your escrow deposit back, and walk away.
We look forward to helping with your next real estate transaction … and making it smooth and effortless for you! Call any time. We are always available for you. 305 793-1365 The Restivo Team.