I. How much do you pay for a realtor?
II. What are listing fees and how does the seller pay for them?
The listing fee is just one side of the deal covering the costs of listing a house for sale in the MLS, marketing, advertising on social media sites, photos, virtual tours, signage, lockboxes, open houses, broker’s time, etc. The listing fees are paid at closing and are deducted from the sales price of the home hence they are paid out of the sellers’ proceeds.
III. What are buyer agent fees and does a buyer pay the realtor fees?
The buyer does not typically pay the realtor fees and unlike common misconception amongst new buyers, buyers don’t save by searching homes solo and unrepresented by an agent. Quite the contrary, they miss out on a free service that is offered to them and eventually paid for by the seller. The buyer agent fees are already baked into the commission paid by the seller on “used” homes or new construction. So going solo just makes it so much tougher on the buyers calling each individual seller agent to schedule a showing when in this day and age that is handled through an online scheduling service available for security and accounting reasons only to licensed Realtors. If you don’t have a buying agent assisting you in finding your new dream home, you are missing out on a great free service offered to all home buyers. With no buying agent, the selling agent would be put into a dual agency situation, assuming the firm he/she works for allows such contractual arrangement to represent both the seller and the buyer. If the selling agent does represent both sides of the deal, he/she will also get both sides of the commission. Generally, most real estate agencies only allow designated dual agency agreements where the buyer and the seller are represented by different individual brokers working for the same firm. In the end, the buyer agent fees are paid at closing and are deducted from the sales price of the home paid out of the sellers’ proceeds. If the buyers are not represented by a buying agent then that commission is paid to the selling agent. This is not a typical situation as most buyers do find an agent to represent them and to assist them in the home buying process. In situations where the seller and the buyer is not represented by an agent then the transaction is clear of any agent fees. I have sold my home in Strongsville, OH to a friend without either of us having representation by an agent. That is a very rare situation.
IV. Who pays for buyer agent fees?
As a seller, you want to attract buyers to your house by setting a reasonable compensation to the buying agent in the amount of 2.0% to as high as 3% fee. In the Triangle Raleigh area this is is set to usually 2.4%. All fees are negotiable and are narrowed down with the listing agent at the time a listing employment contract with the agent is established. See pricing of LIMIT Realty services here.
V. What are buying agents?
Most buyers are strangers to sellers and are commonly not trusted to enter seller’s home without presence of an entrusted party such as licensed and background checked real estate agent. The buyers don’t have the tools or authority to enter sellers’ homes themselves or without a trusted person. That trusted person to a seller is either the selling agent or the buying agent because having a seller being present for house tours does not usually work in their best interest. While selling agents don’t typically show up on house tours when buyers are represented by buying agents, they will certainly be willing to show you the listed house if you are not represented by a buyer. Their duty by law in North Carolina for example will then be to explain the Working with Real Estate Agents Brochure upon first substantial contact which happens when you attempt to start giving personal information related to your price range, terms and motivation to buy.
VI. How can buying agents help you?
Buying agents take buyers around on home scouting tours and show them homes available for sale in the desired area. A buyer agent is your trusted advisor when you have established an exclusive buyer agency agreement with them to work for you. However, without the agency agreement there is no fiduciary duty to keep your information confidential so anything you disclose to them prior can be shared with the seller’s agent and hence the sellers. Having a buying agent on your side early on in the process is the best way to get started looking for a new home.
VII. Are realtor fees negotiable?
Most things are negotiable in life whether it’s the car you are looking to buy or even the price you pay for your cable provider. Most full service brokerage houses set minimum rates their agents must charge and these range typically from 5% to 7%. The services they provide are typically all inclusive. For instance, for sellers that sign up with a full service listing broker should not expect to pay for any of the forthcoming services like professional photos, virtual tours, marketing, MLS fees, contracts, etc as all should be included in the broker commission fee and are deducted upon closing from the sale of the home. Fixed rate brokerage firms offer subset of brokerage services where you pick ala carte based on what you absolutely need. These fees are also negotiable subject to broker firms guidelines. Ask them to throw in a few services for free and always read the fine print and the list the flat fee provides then compare it to a list from a full service brokerage services to get an overall picture of the breakdown. In most cases, if you add up the flat fee services you will end up paying up as much or more you would for a full service broker.
Thank you for reading my article! My name is Livia Keesee and I’m a local full service Realtor® in the beautiful Raleigh, Durham, Chapel also known as the Triangle. I pride myself on working with great people every day that are relocating to this area, moving out or that are upgrading to bigger better homes. I spend time educating my clients on all their is to know about local real estate economy, market, neighborhoods, red flags, regulations and the transaction process. I look forwarding to working with you!