Linda Cefalu, Real Estate Pro in Franklin, WI

If I hire a real estate agent, and I sign a buyer agency agreement with that agent, do I owe them a commission at the time of closing?

Asked by Linda Cefalu, Franklin, WI Thu Aug 5, 2010

Help the community by answering this question:


I thank all of you who responded. It is my hope to help otherwise renters to be home owners and try to educate them on the process of home buying.

In response to FSBO success. I understand you're feeling a bit perturbed about this question. So let me ask you another. Wouldn't you rather pay a small percentage of your sale to get it sold than to sit on it for a year or more. Agents like myself spend a lot of time and money promoting our services to find buyers for your home. Don't you think we should get paid for that service?

On the flip side....I have brought buyers to FSBO homes or homes for sale by limited service companies and ended up doing all of the work for both sides of the transaction. And usually when it is a For Sale By Owner that is exactly what happens because the seller, in most cases, has no clue how to move forward to closing. I do not mean any disrespect to you, however, as I know that there are a few home owners who have actually done their homework and are a joy to work with..............but that is extremely rare.

So back to your comment. Why would a seller expect a hard working agent to bring a buyer to their property and do most of the work in getting it closed but not get paid?? You think that the buyer should pay a commission to sell YOUR house? Hmmmm...........
Web Reference:
0 votes Thank Flag Link Mon Oct 18, 2010
Hi Linda, no it is the seller who pays -- virtually always. Now are you an agent who already knows this? Or an interested buyer? :)

For more information you can read my blog -- Top 10 Reasons to Hire a Real Estate Agent. Link below. Best of luck!
0 votes Thank Flag Link Sun Oct 17, 2010
No, the joy of real estate (and I am being VERY sarcastic) is that you can use a buyer's agent, have them spend multiple hours showing you a home and not have to pay them a dime! All of the "costs" falls on the seller.
0 votes Thank Flag Link Fri Aug 6, 2010

The reason for my question is simply this:

Today at my business networking meeting, I asked that same question and could not believe the response. More than a third of the people in the room thought the answer was yes. Of course, that gave way to an opportunity for me explain how it actually works.

My heart lies in first-time home buyers and there are far too many of them that go unrepresented into a transaction and then later they cry for help. I was hoping that by asking the question here that it would cause at least some buyers who visit Trulia, to give pause to the question and seek out the correct answer.

In my experience, I have only had one person decline to sign a buyer agency and the ones that do fully understand the consequence of a FSBO commission although thus far my buyers have never had to pay them.

It is my sincere hope that more buyers will educate themselves on how a buyer agency works and then go out and get themselves a good REALTOR® to represent through one of the most important and probably largest investments they may ever make in their lifetime.

Thank you both for your feedback.

Web Reference:
0 votes Thank Flag Link Fri Aug 6, 2010

98% of the time the answer is no. Commissions for agents are paid for out of the proceeds of the sale. But, there are circumstances in which you would be responsible.

1) You chose to purchase a for sale by owner property and the seller would not work with your agent (or any agent). I show FSBOs all the time and most sellers are fine with paying my commission percent. Some even put that right in their ads. However, those that don't will be limiting the number of buyers who see their property.
2) You go around your agent and see properties with another agent; work directly with a seller without knowledge of your agent: and any other violation of the contract.

I will admit that these issues are rarely pushed by the Buyers Agent. Feel comfortable signing the contract and knowing your will be in that 98%.

Polly Briley
Broker Associate
RE/MAX On The Water
0 votes Thank Flag Link Thu Aug 5, 2010
Linda I've read your posts here before, and I pretty much think you know the answer here since most of your responses are right on target, so I'm a little curious where this is going but here is my take on it.

It would all depend on what is written in the buyers agreement. The agent is paid from the sellers proceeds. The only way the buyer would have to pay an agent is if the deal fell through or, if the seller was not paying a commission, and the agent was looking for compensation for bringing a willing and able buyer

There would need to be some verbage in the buyers agreement that states something to the affect that the buyer will compensate the agent and for how much: flat fee or percentage.

Most buyers agreements are used to show that the agent has a relationship with that particular buyer and contain a provision should the seller not pay a commission, but most I know don't even use a BA or if they do do not use that part of the BA.

Funny you would bring this up, a similar conversation came up at lunch today on this subject.
0 votes Thank Flag Link Thu Aug 5, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer