Real Estate Agent Questions.

[NetworkDad]

I'll be starting home shopping here soon....I have a question about the real estate agent i decide to go with though. They're working for me looking for a home - Do they normally charge a flat fee for their service, or take a percentage of the home sale price ?

Thanks,
Jason

 

[FeathersMcGraw]

Originally posted by: NetworkDad
I'll be starting home shopping here soon....I have a question about the real estate agent i decide to go with though. They're working for me looking for a home - Do they normally charge a flat fee for their service, or take a percentage of the home sale price ?

I believe that a commission percentage is negotiated when the property is listed, and that the selling agent receives that commission at closing.

If you're using a buyer's agent, the selling agent and your agent will typically split that comission.

 

[Scarpozzi]

It's a percentage of the sale. The only houses that real estate agents can sell are within their networks. They usually have a selection of houses that are considered the ones they represent, but any othe agent in that network can show the house to get a small percentage of the commission. The costs to you will be primarily closing costs and if you have already selected an agent, I would ask them what you'll be charged and when to clarify it. Don't worry about anything because they can't charge you for looking.

 

[vi edit]

Numbers that I've typically seen are 6% or 7% of selling price goes to realators. Selling agent gets around 3-3.5% of the 6 or 7, and the buying agent gets the leftovers.

 

[ObiDon]

Originally posted by: vi_edit
Numbers that I've typically seen are 6% or 7% of selling price goes to realators. Selling agent gets around 3-3.5% of the 6 or 7, and the buying agent gets the leftovers.

Does that actually come out of the selling price or is it tacked on top as a fee?

 

[Red Dawn]

Does that actually come out of the selling price or is it tacked on top as a fee?

Comes out of the selling price.

 

[vi edit]

Does that actually come out of the selling price or is it tacked on top as a fee?

I can't really answer that question reliably. In all the situations that *I've* witnessed, buyers don't ever have to cough up any other money than the negotiated selling price, and the closing costs to the bank. The fees are built into the selling price.

I'm not really familiar with the selling end of things so I couldn't in good faith give you an answer to that.

 

[NetworkDad]

Thanks all! That answers several of my questions...

 

[kranky]

Let me encourage you to ask pointed questions of the agent to make sure you understand how he/she is compensated. There's too much money at stake to not be crystal clear.

One question to ask is "Do you disclose to the seller or seller's agent any information that I discuss with you?"

 

[vi edit]

One other piece of advice...never ever EVER! work with a dual representing agent. A dual rep agent is one who represents both the seller and the buyer. In this situation there is only one person they are actually looking out for - THEMSELVES. Steer far and clear of them.

 

[ObiDon]

Originally posted by: vi_edit
One other piece of advice...never ever EVER! work with a dual representing agent. A dual rep agent is one who represents both the seller and the buyer. In this situation there is only one person they are actually looking out for - THEMSELVES. Steer far and clear of them.

I was just about to ask that very question!

 

[denali]

I would suggest that you find an exclusive buyer agent they work for you any other agent by law has to work for the seller.

 

[Woodie]

What vi_edit said. Been burned by that myself.

The AGENT represents the seller, and has a contractual obligation to act in the best interest of the sellers (ie, get the highest price).
A BUYER BROKER represents the buyer, and has a contractual obligation to act for the buyer. If you get one, you must sign a contract, and you must work through the broker in order to see any property. Do NOT have an AGENT show you a house w/o checking w/ your broker.

Sales Commission is usually 6%, and is paid by the SELLER (so it's built into the price of the house). The commission is traditionally split 3% to selling AGENT, and 3% to the BUYER BROKER or agent who brought the customer to the house. Note: A buyer broker defines a very specific legal relationship, and is not the same as working through a particular agent.

What the RE folks recommend, is that you work through a single AGENT, who will work with you to identify properties that might be of interest to you. The properties may be listed by the same agency, or a different one as the one you are working through. "Your" AGENT will get the 3% commission on any property you buy, that they showed you. This is why you have to be very careful about who shows you the property! Obviously, if "your" AGENT sells you a property that is being listed by their own agency, the agency gets the whole 6%. Be aware, even if the "your" agent is not from the listing agency, they have more of a responsibility to the seller, rather than to you.