This is because a $291,000 offer with no buyer agent commission is equal to a $300,000 with a 3% buyer agent commission. For example, you could make an offer of $291,000 on a $300,000 home and this would be equivalent to a $300,000 offer from a consumer who is using an agent. Sure, you'll have to make a downpayment of 3% - 20% of the home price, but have you considered the embedded cost of your agent? Since real estate agent commissions are rolled into a home’s asking price, as a buyer, you’re essentially footing the bill when it comes time to close on your home.Ī consumer could theoretically purchase a home for 3% less than the advertised price if the homebuyer negotiated directly with the seller and their listing agent, instead of hiring a buyer's agent. Source: The Balance - "Who Pays The Commission To The Real Estate Agent?" Agent fees are your single largest expense when buying a home Elizabeth Weintraub, Broker-Associate at Lyon Real Estate If the seller did not sign an agreement to pay a commission, the sales price might have been lowered. Why? Because it's typically part of the sales price. It can be argued and, quite rightfully so, that the buyer always pays the commission. "But you are the only one bringing money to the closing table." ‘The funds come off the seller’s side, creating the illusion that the seller pays,’ says Fred McGill of SimpleShowing. Typically, the listing agent and the buyer's agent split the commission from the transaction. Sellers factor in the cost of commissions when they price their homes. Source: - "Who Pays The Real Estate Agent When You Buy A Home?" In that sense, you could say the buyer pays the fees." But she also points out that "while sellers pay the fees, they usually wrap them into the price of the home. Standard practice is that the seller pays the real estate commission of both the listing agent and the buyer's agent, according to Ruth Johnson, a Realtor® in Austin, TX. Here’s what honest real estate agents had to say in articles on, HGTV, and The Balance about who pays the seller's and buyer's agent commissions: In other words, it comes from your mortgage/loan on the home. Since these fees get baked into a home’s listing price, and you’re the only one who has to pay money at closing, the buyer's agent commission gets passed onto you when you buy a home. And while this fee is technically paid by the seller, it’s factored in to how much sellers list their home for. (spoiler alert: it’s you - the homebuyer)Īs a buyer, your agent and the seller’s agent split a commission fee – typically 5-6% of the purchase price of the home. In this article, we'll debunk this homebuying myth and explore who actually pays the buyer's agent commission. "My Realtor friend told me that it's free to use their services. Isn't using an agent free when you buy? Well, this is one of the most common questions we get from new homebuyers:
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