How do Buyer Agents get paid?
A buyer's agent or in our case, an exclusive buyer’s agent, is a real estate agent who represents the interests of the buyer in a real estate transaction.
So who pays the buyer agent fee?
It's not as straight forward as it appears.
The buyer's agent fee, cooperative commission, is listed on all properties for sale in the Multiple Listing Service. It is shown on the settlement sheet as a debit from the sellers proceeds. However, it is the buyer who finances the transaction with a loan or cash.
The cooperative commission is paid from the sellers proceeds however, it is the buyer who funds the entire transaction. If you are buying a home listed in the Multiple Listing Service, there will be a cooperative commission offered as payment to the buyer’s agent. This fee will vary and it's negotiable. At HomeBuyer Brokerage, we accept the cooperative commission as full payment for our services.
On October 31st 2023, in a class-action lawsuit, a jury found the National Association of Realtors and several large real-estate brokers guilty of conspiring to keep commissions high. They awarded home sellers $1.8 billion dollars in damages. There are more class action lawsuits today. While the first case was successful, no one knows how these will end.
How will this impact the buyer agents commission?
No one knows. Many companies will go bankrupt if these additional cases go like the first one did. It would be great if Congress could end this before the housing market slips into chaos but that is not likely to happen with this Congress. My concern is what happens to the good guys? The members of the National Association of Exclusive Buyer Agents who chose to only represent home buyers?
Many home buyers don't have the financial means to pay out of pocket for representation. This would drive home buyers directly to the listing brokerage and dual agency agreements.
For now, we are here and paid by the cooperative commission. We are committed to exclusive buyer agency and the full fiduciary commitment to home buyers.
Top things an exclusive buyer’s agent will do for buyer clients
Listening to you: Your agent should hear you and accommodate your needs. Where you start to look for a home may not be where you end up. You may discover the house style you thought you’d like doesn’t really work for you. Or after touring several properties, you may realize you want more privacy in a backyard. And so on.
Buying a home is a process. Your buyer’s agent should tune in to your needs. Listening is a top skill your exclusive buyer agent should possess.
Explaining the entire process from start to finish: Your buyer’s agent should walk you through each step from house tours to the settlement table and beyond. We teach a free online home buying class several times a year. Check our website or contact us to learn more about the home buying process.
Negotiating the purchase price: A buyer's agent will negotiate the purchase price on your behalf, helping you to get the best deal possible. They will provide a comparative market analysis to show you what similar properties sold for in the past 6 months. Evaluating the condition of other similar properties helps you determine the value of a home.
Writing the contract offer: A buyer’s agent will review the details of the contract, explain all contingencies, write all pertinent information on the contract and send it to you for electronic signature. This can take several hours as it involves coordinating with the lender, settlement office and meeting all your expectations and concerns regarding the offer.
Coordinating the closing process: A buyer's agent will help you navigate the closing process, including handling paperwork and communicating with other parties involved in the transaction. If you are buying a home in an HOA, co-op or condo association, there will be documents to review. In addition, your buyer’s agent will assist you as you review the disclosures from the seller, the home inspection report and other documents regarding the home.
Providing market expertise: A buyer's agent can provide you with valuable insights into the local real estate market and help you make informed decisions about your purchase. This is particularly important as you evaluate the location, lot and property to determine your offer price.
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How can we help?
If the exclusive buyer agents at HomeBuyer Brokerage can assist you in any way, please don't hesitate to contact us at firstname.lastname@example.org.