One questions I get asked most often from the buyers in my Direct Buyers Program is, “Do I pay you? Or who pays you?”
If you’ve spent any time watching Bravo or HGTV then you know that real estate agents get paid a commission based on the properties that they help sell.
But that’s TV. What does this actually look like in your life?
If you’re going to be working with a professional for anything, it’s fair to ask questions about how that professional is getting compensated, and whether you’re getting your money’s worth.
When a real estate agent like me works with a buyer like you, I get paid a percentage of the sales price of the home you buy. Generally, this is 3%, paid by the seller of the home.
That commission gets paid to my broker, JB Goodwin, who keeps a portion and I keep what’s left over. I use it to support my staff, support my family, pay for marketing, and enjoy life.
Real estate is unique because unlike most services, I don’t get paid unless you get what you want.
We can drive around looking at homes together for months, but I don’t collect a penny unless you sit down at the closing table and buy the home you want. Kind of cool, huh?
So the answer to “who pays you?”
The seller pays my fee in the vast majority of situations. In this marketplace, sellers usually hire a real estate agent to represent them, also called a listing agent, and they agree to pay that listing agent 6%.
If there is also a buyer’s agent involved in the transaction, then the listing agent splits that 6% in half, and pays the buyer’s agent 3%.
What’s important to note here is that the total commission the seller pays has already been negotiated. It’s 6%. So if you as a buyer decide to go directly to the listing agent to “save the commission,” you aren’t saving the commission.
Rather, you’re paying the listing agent to negotiate against you. And they’ll be more than happy to collect 6% rather than 3%, but you’ll have no one representing your best interests.
So in short, a buyer’s agent is a real estate agent whose job is to negotiate on your behalf and protect your interest out in the marketplace. And it doesn’t cost you anything!
Now, are you ready to talkabout buying or selling your next home? Book a free 15 minute “Austin Real Estate Consultation” here and I’ll offer some free pointers on where to start.