I’m Buying a House… Who Pays the Realtor?
If you’re looking to buy a house, the cost of hiring a Realtor is free and at no point in the transaction will you need to pay the Realtor any money for services rendered, whether you end up making a purchase or not. First Time Home Buyers are often confused by the nature of this business relationship and aren’t sure whether they were going to use a Realtor or not because they didn’t think they could afford it. When they finally understand that an Agent’s services for helping them find a home will cost them no money at any point they light up and accept their good fortune before sometimes asking how the agent will get paid. Here’s how it works:
When a homeowner decides to sell their home, they often hire a Real Estate Agent to help list their home, known as the “Listing Agent.” The seller of the property pays the Listing Agent a percentage of the final price tag of the home for services rendered once the home finally sells. In addition to using these funds to reimburse himself the out-of-pocket marketing and advertising expenses, the Listing Agent will use a percentage of his percentage of the selling price of the home to attract other Real Estate Agents representing prospective buyers. These agents are called “Selling Agents.” The Selling agent, whose client is the Buyer, will show the Listing Agent’s property for sale and help present a buyer to the seller. Ultimately the role of the Real Estate Agent is to match prospective home buyers to home sellers and to guide each- and in some cases both, which is known as a “Dual Agent,” through entire transaction process.
There is no mandatory percentage taken by the Listing Agent nor is there a standard percentage given by the Listing Agent to the Selling agent; commissions are always negotiable. The commission is partially for payment to the agents, but part of that percentage goes to advertising and marketing, to the Brokers of the Agents, and of course to Uncle Sam as the commission is pre-tax.
In short, again, there is no reason to house hunt alone because as a Buyer, your Real Estate Agent is free. There are a lot of resources out there for potential buyers to better understand the market and to get an idea of what’s out there (such as Trulia, Zillow, HotPads, etc.) and that’s encouraged. You should always also consult your local Real Estate Agent- it’s FREE!
Here’s a good one: http://www.nolastyles.com/contact/