“How much is the commission on that house?” That question is one of the many reasons that I choose to use Buyer Broker agreements with my buyer clients. (and why ending cooperative compensation would be a boon to the real estate world).
1 – The Seller and the Sellers’ Realtor are going to do whatever they can (legally and ethically) to induce a buyer to look at the house … and hopefully buy it.
2 – The Buyer’s Agent is going to earn a fee …
3 – Somebody is going to pay that fee. I like to think that the Buyer is paying the Buyer-Broker fee … they’re the ones choosing and hiring their representation, anyway.
And then there’s this -
… this highlights the conflict of interest inherent in the “seller paying” the Buyer-Broker commission.
As a buyer – when do you negotiate the fee you are paying your buyer’s agent? I do so very early on the process.
I’ve heard the arguments time and time again:
- “It’s FREE to use a Buyer’s Agent! The fee is paid by the seller!” (this argument becomes much harder when the seller has no or negative equity)
- “It’s none of the Buyer’s business how much I’m being paid!” (as argued by the Buyer’s Agent who ostensibly is seeking to “represent” said buyer)
Look, I’m not begrudging Realtors earning livings what I do encourage is for buyers to be aware of what may be going on behind the scenes.
** Disclaimer: The above represents the opinion of Jim Duncan, Charlottesville Realtor and author of RealCentralVA.com, and are not necessarily shared by my partners or agents at Nest Realty in Charlottesville or by the Charlottesville Realtors’ Board of Directors (of which I am currently a member) nor perhaps the majority of members of the Charlottesville Area Association of Realtors.