Brought to you by Scott P. Rogers, Funkhouser Real Estate Group, 540-578-0102, scott@HarrisonburgHousingToday.com
Brought to you by Scott P. Rogers, Funkhouser Real Estate Group, 540-578-0102, scott@HarrisonburgHousingToday.com
Wednesday, August 28, 2024
So you're buying a home, and you have a real estate agent representing you in that purchase? Excellent. Some of the roles that agent will likely fulfill include...
- assisting in your home search
- providing data about each property
- explaining financing options
- creating a negotiation strategy
- drafting and presenting offers
- researching restrictive covenants, etc.
- coordinating property inspections
- coordinating property appraisal
- conducting final walk-through
- preparing for settlement
- answering questions and providing counsel and guidance as needed
But... this agent that is representing you in the purchase... who is paying for their services to you?
Since I started representing home buyers back in 2003, most people would have said "the seller" and here's why...
The sellers of most homes listed for sale agreed in a listing agreement with their agent to pay a brokerage fee (commission) that would end up (in most transactions) being paid in part to the company and agent representing the seller and in part to the company and agent representing the buyer.
So, most home sellers would likely say that they were paying for the services that the buyer's agent was providing to the buyer.
And most home buyers would likely say that the seller was paying for the services that the buyer's agent was providing.
Since a buyer now has to sign a buyer brokerage agreement with their agent before touring even a single property, a buyer will likely have more conversations about their agent's compensation earlier in the process.
Most buyers will hopefully understand that they are paying a specific brokerage fee to compensate their agent for their services.
That said, many (or most?) home sellers may still offer to and plan to pay the buyer's agent's compensation. If they do, it's less clear how to answer the question of who is paying for the buyer's agent's services.
If a buyer agrees to pay ___ for their buyer agent's services...
...and the seller of the house they plan to buy agrees to pay ___ for the buyer's agent's services...
...then who IS paying for the buyer's agent's services!?
In this scenario, while the buyer agrees to pay for the services, the seller agrees to deduct that cost out of the purchase price of the house.
Or, alternatively...
If a buyer agrees to pay ___ for their buyer agent's services...
...and the seller of the house they plan to buy does NOT agree to pay for the buyer's agent's services...
...then clearly, the buyer is directly paying for the buyer's agent's services.
In that scenario, a buyer pays a price for the house and pays for their buyer agent's services as an additional fee.
Have we gone around and around in a few circles here? :-) Email me with any follow up questions that you might have.
