Most buyers do not understand how a realtor gets paid. They might think that he/she gets a paycheck from the company they work for? They might think that there’s a pool of money for realtors to draw from as they help buyer clients.
It’s actually quite simple. The realtor owns his or her own business, but he must have his license on file with a brokerage so his work can be overseen. If the realtor is not involved in a sale, then he does not get paid a commission. Even if the realtor writes a contract for the buyer and it gets accepted by the seller; if the sale does not close (change ownership), he does not get paid a commission.
If a buyer goes into a new home developement, the buyer’s agent cannot represent the buyers unless the builder allows it. There’s no incentive for the builder to allow it though, because commission is already built into the sell price. If the builder does not have to pay a buyer broker commission, then they just make more profit, and they are not going to give it to the buyer in a reduced price or incentives.
If a buyer goes into an open house and ends up writing a contract with the listing agent; the buyer’s agent does not get a commission.
So what does a buyer do?? Call the realtor you’re working with and ask before you act. Don’t go to the new home builder without contacting your agent. Many times, your agent can make arrangements with the builder even if he can’t accompany his client.
If you go to an open house; have your realtors card handy so you can tell the listing agent that you’re already working with someone. Whatever you do, don’t believe the unscrupulous agent who might tell you that you get a better deal if you cut out your agent. Not true. The agent gets more commission because he’s “representing” the seller and the buyer. Nothing comes off the price because the seller is still going to pay commission like there were two agents involved. It can be a tricky situation for a realtor trying to represent both sides. He’s not allowed to give either side an advantage. The realtor can’t even suggest a price for you to offer because he might know what the seller’s bottom-line is. Either side might call foul if they feel they’ve been wronged.
If your realtor is loyal to you, then you owe it to him to honor your word and stick with him. If you aren’t satisfied with your realtor, fire him! If you are satisfied with how he’s helped you; he deserves to be paid for his work.
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