Typically it is the seller who pays the agents that sell the home. Having your own agent representing your best interests is going to help you out tremendously in the long run. When you call on the listing agent (the one who has the sign in the yard) he/she has already contracted with the seller to represent them. It is sometimes very difficult for agents to remain neutral in situations like this. The only way you would be responsible for agent fees is perhaps if you bought a home that was For Sale By Owner. Then you would have to try to negotiate with the seller to pay the commission, or negotiate your own deal with the agent.

Thu May 8 2008, 10:09

If she is acting as a 'Buyers Agent', she should have provided you with a form to sign stating how she would represent you and be compensated. If you did not sign anything, she is probably representing you as a 'Transaction Broker'. In either case, she can not charge you any fees unless you agree to it in writing. Typically, an agent representing a buyer collects their compensation from the seller of the home. If differs in areas but your agent should be able to tell you this.

Thu May 8 2008, 09:35

I'm curious if this agent has sat down with you and disclosed agency and have you signed a Buyers Contract? When I meet with potential clients, I have a wonderful Buyers package that I put together that helps explain the whole process. From the beginning to the closing. This usually takes about an hour of their time. It is well worth it, as I believe it's just as important to have a buyers presentation as it is to have a sellers presentation. This also covers the most important part and that would be talking with a mortgage rep. regarding your financing. Then I ask if there are any questions and if not, I suggest to go home and read through everything that they are given and write down any questions that the buyer may have. At our next meeting, which is usually the house hunting stage, we go onto having more questions answered and it is a wonderful learning experience for my clients, whether you're a first time home buyer or not! I would suggest if you don't feel like you've had everything answered, ask for an appointment at the agents office to go over all of your questions and concerns. I hope this helps! Good luck and Best wishes!!!!

Thu May 8 2008, 09:22

In most cases the buyers agent and listing agent commission is paid by the seller.

Thu May 8 2008, 08:54

She is working on commission that is paid by the seller, not by you. She does not get paid unless you purchase a home. Typically she is splitting the commission that the listing agent is earning from the seller. Her services to you are of no cost to you.

Thu May 8 2008, 08:54

Ask your Realtor for a copy of her Buyer's Agency contract, it will explain how she gets compensated as your Buyer's Agent. It is very typical that her commission is paid by the seller or the seller's listing agent.

Thu May 8 2008, 08:52

The TOTAL commission which is normally attached to the Seller's side is what usually pays for both Buyer's and Seller's fees. So, this is very helpful for a buyer like yourself because the seller will pay for your realtor fee. The commission is generally split between and Listing(sellers) Agent and Buyer Agent. Your agent meant that there is a fee, but that the seller will be paying for it.

Thu May 8 2008, 08:48

There are are a few ways agents can work with people. She should sit down with you and fully discuss Agency and how you would like to be represented. If you do not have a Buyers Agent working for you, the agent is representing the Seller. It is best for you to have someone on your side, that can help with the negotiating of the offer to the closing. The Agent can be paid by you or be paid at closing from the Sellers Agent. Find an agent and make sure they know you are a first time Buyer. Sit down and really discuss the whole process. We get paid to do this. Never be afraid to ask questions. Good Luck and happy house hunting.

Thu May 8 2008, 08:36

If she is not charging you any fees, then that simply means that she will be collecting the commision from the listing agent.

Thu May 8 2008, 08:27

The commission on the Buyers side is paid by the seller usually. Sometimes a Buyer has to pay a Transaction fee at closing. Your Buyers agency contract should specify that the Seller pays the commission on th Buyers side for the Buyer.

Tue May 6 2008, 12:45

There is much confusion about buyer's agency. When I meet with clients I usually go over Michigan agency guidelines. What's important to understand is that the agent who has a property is obligated to represent the best interests of the seller. So while they can write up an offer, they legally represent the seller UNLESS they become a dual agent and have you sign the dual agency form. In that case they represent both parties. This part can be tricky. Personally, since I would legally be representing both parties, I summon a "conference" where we can hash out all the details. I would obviously know the sellers bottom line, and the buyer's top price point so it works to get everyone together.

A buyer's agent obviously represents and looks out for the best interests of the buyer. In Michigan, commissions are split between the seller's agent and buyer's agent. The seller offers a buyer's agent commission to draw those agents that work with buyers to their house. By the agent getting paid a commission, he has the incentive to sell that house. So, YES the seller does pay the buyer's commission in order to get their home sold.

Also, many buyers wouldn't be able to qualify to buy a home if they had to pay a commission or fees to an agent plus the mortgage fees. By the seller paying this fee, it allows more buyers to qualify for more of a home.

Mon May 5 2008, 18:35

Jc: You are correct to be confused about Buyer's Agency commission. This is really like looking at "which came first the chicken or the egg". Some agents also get this confused.

Let's start with Agency Disclosure. Hopefully you understand that the State of Michigan requires all agents to work for the home seller (including everyone answering this question, aunt Maude, uncle Joe, and any agent you call) unless they are working under a signed Buyer's Agency Agreement. Here is a sample copy. http://michiganlakefronts.com/account/4611e10d0e5900a0/pdfs/… Copy will enlarge.

Most BA contracts will be similar. I would like to direct you to sections #3 and #4. First, you are agreeing to pay the Broker (company) for their services, and then the Broker will attempt to obtain payment from the sellers Broker. If the sellers broker is offering the compensation you agree to pay then you pay no money, If the seller (FSBO) does not offer compensation, you may be required to pay. In general, all fees are rolled into the purchase price of the home.

Now that you've had a chance to read a sample contract, you will need to make up your own mind about the agents response. Additional sample forms are available on the website below. Please read them before proceeding to get a general idea about what's involved. Most forms will be similar but not the same.

If you have any other questions, feel free to ask someone privately for an answer or submit another question on Trulia.

Fri May 2 2008, 09:46

Hey JC,

It is true here in Grand Rapids, and most places, that the commission of the Buyer's agent is paid for buy the home seller.

If you are looking at a For Sale By Owner, however, that MAY be a different situation. Feel free to contact me if you have any questions.

Fri May 2 2008, 07:13

Hi JC, your answers are all good here! I just want to add, you can interview buyers agent for the job, just like any other job! You work closely with your agent..........find one you like and trust.

Fri May 2 2008, 07:06

Hi JC -

Using a Buyers Agent is the best option when purchasing a home. They have a duty to represent only your best interests. Most agents here have answered your question but I will add one more thought.

When you sign a Buyer's contract, you sign that you will pay the Buyer's Agent a set % to help you find the home that best fits your needs. Most homes that are listed on the MLS will meet that percentage and be paid by the seller, on your behalf. As others have mentioned, a For Sale By Owner will have to agree to pay that % but make sure you let your agent contact the owner first so they can clarify that before showing you the home. The exception to this rule of thumb are foreclosure homes. If you are also considering that market, please be aware that not all "bank owned" properties pay the standard/accepted commission amount to the Buyer's Agent. Clarify, in writing, what your agent will accept from you if you purchase a home that does not cover the percentage amount initially agreed upon in your Buyer Contract. For example, if your contract states 3% but the foreclosure home will only pay 2%, will your agent accept the 2% or will they expect you to pay the 1% difference out-of-pocket?

I just want you to cover all of your bases so there are no surprises. All agents handle things differently. Happy house hunting!

Nicole Sleeva
nsleeva@cbpreferred.com

Fri May 2 2008, 06:56

The commission to the buyer's agent comes directly from the seller at closing. The buyer does not pay any fees when a listing agent is involved. If the Owner is a For Sale by Owner and the buyer wants an agent , then you may have to pay a commission if the seller does not want to involve an agent on his behalf. And the seller may want you to add the commission to the price of the property.

Fri May 2 2008, 06:34

The only thing I'd add is that generally the contract has a stipulation that they will be paid by co-brokering with the seller's agent. If the house is For Sale By Owner, and there is no seller's agent, you may have to pay the buyer's agent.

Fri May 2 2008, 06:02

Jc:
A Buyer's Agent Commission is paid directly by the seller. When a seller places their home for sale, with a Realtor, the seller agress to pay a commission upon the sale of their home. The total commission is then dispersed, at closing, between the seller's agent and the buyer's agent.

When a seller contracts with a Realtor, that Realtor works for the seller. Buyers need to have representation too that is why we have Buyer's Agents. A buyers agent will assist you through the entire process of home buying all the way to the closing table and some even take the extra step and continue to stay in contact with you. Since you are a first time home buyer a Buyer's Agent is your best way for you to purchase a home today.

Fri May 2 2008, 05:41