Costs of Buyer Agency

In 95% of transactions, using a buyer's agent will not cost you any more than in a traditional transaction. You can have an agent fully representing you and looking out for your best interests and not have to pay any extra.

The closing attorney almost always pays both the seller's and buyer's agents' commissions from the proceeds of the sale. The commissions are still paid the same way, so the fee is a part of the purchase price and therefore factored into your loan.

Who pays?

Traditionally, real estate commissions have been included in the sale price of the property. This practice has been justified on the basis that the real estate agents provide a valuable service, which is a normal cost of the transaction. The seller brings equity to the table and the buyer brings money. Thus both contribute to the payment of the real estate commissions. Lending institutions include these commissions in the maximum limit of the loan.

Negotiation the lowest price

By hiring a buyer's agent, you will most likely SAVE money, because I will be negotiating to get the home you want at the lowest possible price and best terms possible. You're probably wondering, "If you're getting paid a percentage of the sale price, then would you really be fighting to get a lower price for me? Wouldn't it be better for you to sell me on a higher price?"

The answer is quite simple. In most buyer agency contracts, the commission is described as a flat fee (based upon your general price range) OR a percentage of the sale price, whichever is higher. This way you can be assured that I will in fact be trying to get the lowest price for you.

An example

If you're looking for a home in the range of $300,000, your buyer agency contract might have the fee written like this: "a flat fee of $9,000. or 3% of the purchase price". If we find a home that the seller wants $300,000 for, and I can get the price down to say $285,000, then you've just saved $15,000. Now - don't forget that in almost all cases, the commission is paid directly from the sale, so you don't need to pay a fee from that -you've really saved a full $15,000! Even in an extremely rare situation, if you needed to pay a portion of the fee at the closing, you still would be saving thousands of dollars.

In the odd event that there is a discrepancy in the commission pay out, then you might be required to pay an additional fee. HOWEVER, this fee is almost always added to the financed amount and included in the purchase price. So again, it is paid directly from the sale and you would still have the benefit of having me negotiate the best terms and price possible.

Charissa Pemper, Boston REALTOR®

Charissa Pemper
Lic. MA Real Estate Broker, REALTOR®
Charissa@HomesInBoston.com