Home Buying in 92127>Question Details

Murali, Home Buyer in San Diego, CA

Commission for agent from buyer

Asked by Murali, San Diego, CA Thu Feb 16, 2012

In California

Help the community by answering this question:



Typically a buyer does not pay commission to the buyer's agent; the seller, through an agreement with the listing agent, decides on a commission rate of the sales price, say 6%. Out of that 6% the buyer's agent and listing agent each receive 3%. In effect the buyer's agent is free of charge to a prospective buyer.

-Christian Gallego
Realtor & Marine Corps Veteran
Coastal Premier Properties
1 vote Thank Flag Link Wed Aug 13, 2014
Should not be any commission charged to the buyer in a real estate transaction.

It's a great time to buy. For mortgage help, call or email for a free pre-approval in less than 10 minutes. We lend our own money and are licensed in 49 states and you can apply online at http://www.myccmtg.com.

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Brad Neumann
Sr. Loan Officer
Crosscountry Mortgage Inc.
Phone: (630) 639-1081
Email: bneumann@myccmortgage.com
NMLS# 948036
0 votes Thank Flag Link Sun Jan 5, 2014
Hi Murali,

Commissions are 'typically' paid for by the seller to their selling agent, and they authorize their agent to offer a portion of that commission to a buyer's agent.

There are some circumstances where a buyer may pay for professional representation. For example, a buyer finds a home that is not listed by an agent but by the homeowner and the buyer wants to be properly represented. In this case the buyer could hire an agent.

Hope this helps.

David Rudd
Kindred Real Estate
CA BRE# 01402946
0 votes Thank Flag Link Sun Dec 8, 2013
Hi Murali,

If the property was found by you, not on the Multiple Listing Service (MLS) but, you would like to have your best interests protected for this home purchase, you can talk to an Realtor about what they would charge as a "flat fee" to assist you with everything from documents, inspections, repairs, mortgage qualification,etc...all the way to closing escrow.

Just let the Realtor you talk to know what services you are requesting and how they can assist you with the transaction..

You can also hire a Real Estate Attorney for a flat fee as well to review (or even re-word the documents) and negotiate on your behalf. Our broker, Spencer Lugash, is a Real Estate Attorney, which comes in handy sometimes with tricky " legalese" !

However, if you need "in the field/onlocation" assistance, it will be less expensive (most likely) to hire a Realtor instead of a RE Attorney to carry you through to close of escrow.

If the property is on the MLS, the Seller and Seller Agent have already agreed in writing to the Buyer's Agent compensation for assisting the Buyer, which the other Realtors had already mentioned to you.

Hope this helps!

Best Regards,
Robin P Fournier,ABR
Big Block Realty - San Diego,CA.
0 votes Thank Flag Link Thu Nov 14, 2013
Hi Murali,

You don't pay the agent a commission. However, if you sign a buyer-broker agreement, there could be exceptions (which really hardly ever, ever, do they happen). Therefore I recommend you understand the document before you sign it.

But don't let this deter you from signing the agreement, because what it does essentially is protect you and the agent. It just shows that you have an agency relationship, and that for the term of the agreement, the agent will be working for you, looking at houses, scheduling viewings etc... In return, you will be working only with this agent. So if you don't want him or her to work for you anymore, you must let them know. It's just common sense.

Good luck in your home hunt!

Let me know if you want agent referrals for San Diego!

Web Reference: http://MimiDaviesHomes.com
0 votes Thank Flag Link Wed Feb 22, 2012
You will usually NOT have to pay a commission to a Buyer Agent.

YOUR AGENT will be given 1/2 of the Selling Agent's Commission. You don't have to pay them from your pocket.

YOUR AGENT will want you to sign a Buyer Agency Agreement. It will usually say that you agree to pay them about 3-percent. BUT, this is only if the Seller Won't Pay. AND,..... THE SELLER ALWAYS PAYS--- because they want you to buy the house.

As Agents we know the seller will pay because the have hired an agent for themselves. And they already agreed to pay their agent. And their agent promises to pay YOUR AGENT-- that's part of the Multiple Listing Service requirement. They MUST pay the agent.

Web Reference: http://www.natewolf.com
0 votes Thank Flag Link Wed Feb 22, 2012
Hi Murali,
What is your question? If you need assistance buying in 4S Ranch, let me know.

Sinead McAllister
McAllister Homes Real Estate
0 votes Thank Flag Link Thu Feb 16, 2012
It looks like this question was answered thoroughly. If you're agent is asking for you to pay a commission, ask why? If the percentage offered in the MLS isn't enough for your agent, you can always find a new agent - unless you signed a buyer-broker agreement. And, there are lots of agents who don't require that either.
0 votes Thank Flag Link Thu Feb 16, 2012
I am sometimes asked who pays my commission if a buyer wanted to hire me to represent them if they buy a house. Normal protocol in California is the seller's hired broker agrees to pay the buyer's hired broker a split of the commission that the seller has agreed to pay the listing broker per their listing agreement once they enter the property in the MLS (Multiple Listing Service).
So if a seller hired a listing broker to sell their home for a 6% commission the listing broker can agree to split the 6% commission with the real estate agent representing the buyer. Sometimes the split is in half, sometimes it can be more or less. It depends how the hired Realtor wants to do the split or how much of a commission he took in the first place.
A lot of buyers don't realize that they can have their own representation when buying new construction. In most cases the builder offers a commission or referral fee to the agent that registers the buyer. The key with new construction though is the Realtor must be there on your very first visit or the builder will not allow them to represent you and get paid. If you bring a Realtor to register you make sure they are willing to go through all the important steps with you. (i.e. contract signing, design center, loan meetings, walk through, home inspection etc.) I always want to be there for my client to protect and advise them properly to the best of my knowledge.
In some cases if a buyer wants to buy a FSBO (For Sale By Owner) and the seller does not want to pay a Realtor whatsoever the buyer can choose to hire a Realtor and work out a commission with them. For example; I had a client that wanted to buy a house from an acquaintance. The seller refused to pay an agent and really wanted nothing to do with one. My client had worked with me in the past and wanted my representation to protect her regarding contracts, escrow, proper disclosures, contract time frames, and all her rights. We worked out a deal (commission is negotiable) so I would only represent her.
When hiring a Realtor to represent you in your purchase you should interview a few agents first. It's not only about finding a house. That's only the beginning. Someone that is full time, well educated in the area, very knowledgeable about contracts, buying "as is" , and contingency time frames is important as well. I recently had a client call me from Sacramento asking me to help her get her deposit back because her local agent (a friend) let her remove all her contingencies and then she couldn't get a loan. She was told she would loose her deposit. Luckily I was able to help her get her $10,000 back but I know many times consumers get ill advised and loose their money.
When a buyer goes directly to the seller's Realtor that is exactly what you're getting.... the seller's Realtor, Yes, they have a fiduciary duty to you but they also have a relationship already established with the seller's. I hate representing both sides because I love fighting and protecting to the best of my ability for my client. If I represent both sides I can only advise both buyer and seller and it's between them.
In any case in this market you should have an experienced Realtor working with you throughout the home buying process. The seller in most cases pays the commission so there is no reason not to. Some will argue you pay for it in the price but I offer this. The market keeps that in mind, that's why there is appraisals to make sure you don't over pay. Also if you have your own Realtor they can possibly negotiate the house down in price more than a seller or seller's Realtor would for you. We are in a very challenging market right now and chances are you need someone on YOUR side.
Web Reference: http://www.laura4homes.com
0 votes Thank Flag Link Thu Feb 16, 2012
Depends...if you sign a buyer broker agreement with your agent for a certain % of the selling price but the MLS showsless than you agreed to, you could be liable for the difference, although you could ask for a closing cost credit to cover this...but your agent may be ok with the lesser amount and then you would owe nothing at that point.....assuming you dont have a contract with your agent, then the agent takes what is offered to them on the MLS. Buyers agents are paid from the commission paid to the selling agent from the seller, not from the buyer themselves. Your agent should be able to explain all of this to you.
0 votes Thank Flag Link Thu Feb 16, 2012
Commissions are always negotiable between you and your agent, there are no set standards. If you are a buyer, generally you pay no commission; the commission is negotiated between the seller and his/her agent, if two agents are involved in the transaction the fee is shared; if you have an agreement with your agent to pay above what is already being offered, then you would be responsible for that difference; therefore have a discussion with your agent, before beginning your search.
0 votes Thank Flag Link Thu Feb 16, 2012
I agree that we should stay traditional and the seller pays commission, but depending on the sales price, I may ask the buyer to contribute a fee to help pay for my transaction coordinator. Her fee is low and what she does is very important.
0 votes Thank Flag Link Thu Feb 16, 2012
Usually, the commission for the buyer's agent is covered through an arrangement with the seller's agent. However, there may be times when you would choose to pay for your buyer's agent. The commission rate on that is really up to you and your agent. It could be a flat fee or a few percent of the transaction.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Thu Feb 16, 2012
We do not discuss commissions, but normally the commissions are paid by the seller not the buyer so we are FREE to buyers.
0 votes Thank Flag Link Thu Feb 16, 2012
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