How real estate agents get paid
The home seller pays agent fees for both their agent and the buyer’s agent at closing. The total commission is typically 5%–6%, with half paid to the seller’s agent and half to the buyer’s agent.
This fee is negotiated upfront with the Seller and a written contract is signed. Once this fee is signed around and entered into MLS… it cannot change.
If you are the buyer, you don’t pay commissions.
Why You Need a Real Estate Agent to Buy a Home
If you’re thinking about buying a home, you may wonder whether you need a real estate agent. There are plenty of resources for a buyer these days, from online search sites to how-to guides. But an agent has something no buyer – particularly a first-time buyer – does: a wealth of experience. An agent will work as an advocate on your behalf and, in most cases, will get you a better deal than you could get yourself.
Real estate agents have first-hand knowledge of the real estate market. You likely don’t know exactly what the market is like right now in your area. Are homes generally selling for 97 percent of asking price? Can you expect to compete against multiple offers? Do you know what it takes to win against other bidders? If you want a three-bedroom detached home, what should you expect to pay? What’s the inventory like? Your agent will be able to counsel you on these topics. The best way to get an offer accepted at a price that’s in your favor is to know the market intimately – and a local real estate agent does.
Access to Homes
Without an agent, getting into a home will be difficult. Sellers are happy to let a buyer’s agent have the code to their lockbox to show their home. However, they’re not willing to allow an unlicensed stranger total access to their home. This means that you’ll have to visit the property when either the seller or the seller’s agent is available, making scheduling showings both time-consuming and difficult.
Because of this, most individuals who choose to go it alone tour the majority of their homes during open houses, when the home is open for anyone to tour, without an appointment. This puts you against strong competition since you likely won’t be the first person to see a home (a problem in a tight market). On top of that, the agent hosting the open house represents the seller. Any questions you have for them about the house will produce answers that have the seller’s best interest at heart, not yours.
When you tour a home with your agent, you not only have access and privacy, but you also have an advocate whose fiduciary duty is to look after your best interests.