Home buyers are often nervous.
They should be. There’s a lot of factors involved and often times an overwhelming amount of details to consider.
A good professional buyer’s agent with relevant experience can make a huge difference in the end result.
That begs a question: how much should a buyer pay for this service?
Historically, the buyer’s agent has been paid by the seller. Commission to sell the home covers the listing agent and the buyer’s agent, split based on the listing agreement and published in the MLS.
Some of the giant real estate corporations are starting to break away from what has been a successful system for Realtor compensation. These corporations, often housing less experienced agents, are charging fees to the buyer at closing.
Last month, I experienced this for the first time. An agent with absolutely no experience in the given market charged her buyer’s an extra $500 on top of the commission paid by the seller. What was most frustrating for our agents was that the buyer’s agent had to be ‘baby-sat’ throughout the entire transaction. We work with many agents that are astute and competent, seeing them charge extra wouldn’t be nearly as hard to swallow.
The interesting thing is that many prospective home buyers don’t even know how a buyer’s agent is compensated, so seeing the ‘big corporate bonus’ isn’t as much of a suprise as it is to the agents.
Big corporations are a relatively new phenomenon in the real estate world. These corporations are building themselves up by adding income streams to the traditional real estate model to add to their bottom lines. Charging large fees to new agents and selling signs and other materials for a profit are things that typically don’t happen with smaller “boutique” REALTORS.
Word to the buyer: stick with the tradition and look for an agent with plenty of experience in your market BEFORE you pay a fee!
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