Home Buying in Vero Beach>Question Details

Jack, Home Buyer in New Jersey

Buyers Agent Fee

Asked by Jack, New Jersey Mon Dec 1, 2008

What is the standard rate for a buyers agent (% of sale price or fixed fee) and is this amount offset by splitting sales commission with selling agent?

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All of the real estate agents on this thread are correct ...

Commissions and fees are negotiable at all times. To suggest otherwise is to make an antitrust accusation. The agents' response here is prudent and correct.

The seller pays the listing broker a commission. The listing broker may offer to share a portion of that commission as compensation to a broker that secures a buyer for the property. The amount of the compensation for a cooperating broker is specified in the multiple listing service.

A buyer's agent may have a contract with a buyer where the compensation is spelled out. There may be a charge that is a fixed percentage of the sale price or a fixed dollar amount that is not tied to the sale price. There may be a line in the buyer broker contract stating that the buyer agent will accept whatever compensation is offered by the listing broker in the multiple listing service. Buyer agent compensation does not necessarily involved the monies specified as cooperating agent compensation.

Occasionally companies that are involved with relocating employees will hire buyer agents and negotiate fees for their services that are not tied to seller-paid commissions because they want clear boundaries for loyalty and representation.

There are numerous other scenarios involving other business models, including flat-fee MLS where the seller pays a fee for specific advertising vehicles and which may or may not include an offer of compensation to an agent who brings a buyer to the property.

There are no STANDARDS. Agents and brokerages have fixed costs in various business models. Fees and commissions are calculated to cover costs and return an income.

Finding a home is not the most expensive and time consuming part of a real estate transaction. It is silly to think that finding a home on the Internet accounts for a large bulk of time or that a consumer's ability to zero in on a home is evidence of wisdom or ability to complete a transaction satisfactorily without professional help.

I will agree with Asher that the industry would be better served with a higher threshold for entry ... and more stringent continuing education requirements.

Frances Flynn Thorsen
Community Manager
Trulia.com
2 votes Thank Flag Link Mon Dec 8, 2008
Don't believe the lies these agents are telling you Jack. As a buyer, you are paying all the commissions. Usually this will be 6% of the final sale price of the property. The listing agent keeps half, while the buyer's agent takes the other half. If you know the neighborhood you are buying in, can find homes online and see them yourself, you would be wise to use a real estate attorney to close your transaction. They charge a flat, or hourly, fee only. The attorney will take the 3% and refund it to you (or apply it toward your closing costs, if refunds are illegal in NJ). All MLS listings are readily available online and you have no need to use a real estate agent to find the perfect home for you. Who knows your needs better than yourself? Agents on this site are constantly telling unsuspecting consumers that they are worth every penny of the 6% commissions they take from you, often comparing themselves to doctors and lawyers. this coming from a group of people with no formal educational requirements.
2 votes Thank Flag Link Mon Dec 8, 2008
No standard rate or fee. The seller in most cases pays the fee. You hire a buyers agent to find a home. The written agreement signed stipulates the minimum amount I would get. I charge 3%.
This opens the door to foreclosures, short sales (bank approved) and for sale by owners.
A percentage of agents look at how much they would get paid to sell the home. Wouldn't You?
A buyers agent will not care nor direct you to another property.
Before you would make an offer on a home, you would be notified by me of any overage you would be asked to pay (if any). You then base your offer on that fact, or if priced low enough factor that into the purchase.
To view about buyers agency and the rest, http://www.sunnyspotrealty.net/BuyersagentFlorida
I have earned my fees times ten for buyers. I saved them thousands for each purchase.
Hope this helps.
Exclusive Buyers agent,
Owner/Agent Joseph Beauvais
2 votes Thank Flag Link Mon Dec 8, 2008
Jack -- exclusive buyer's agents and brokerages have different ways in which they can be compensated. Some agents call themselves "buyer's agents" but they and their brokerages also take listings; they are not exclusive buyer's agents. Exclusive buyer brokerages do not list. They only work with buyers. Some exclusive buyer's brokerages require their clients to sign buyer representation agreements that specify the amount that they will be compensated as in a set fee arrangement or percentage of the sale and other buyer brokerages, like ourselves, normally accept the compensation that is set forth in the listing agreement for the selling agent. Often times, in order to get the best deal for our client, the compensation terms are modified. If you would like more detailed information on using an exclusive buyer agent and how we are compensated, please contact me. I will be glad to discuss our office policy with you.
1 vote Thank Flag Link Wed Dec 3, 2008
Jack - we're consistent.. no "standard" across the board. HOWEVER, each agent and each brokerage has a standard - so ask the people you're looking at hiring. Also, since buyer's agents are largely compensated by the listing agent as a split of that fee, you can determine what is competitive in your market place by asking any agent to look at similar properties (type, area, price point) and run the listings and see what compensation is being offered by those sellers/agents. That will give you a "range" of normal within your geographic location. My experience is that compensation is higher for land and commercial than residential, but only up to a certain price point and then the % drops. Let's face it 1% of 12 million is a lot of freakin' money...10% of $10,000 is not, especially when split with brokerages, and deducting expenses like the computer, mls fees, realtor association dues, electricity, auto, insurance, gas, paper, pens, phone - all things that your agent needs to be able to conduct business with you.

Hope this helps.
1 vote Thank Flag Link Tue Dec 2, 2008
Hi Jack,

As stated below there is no standard fee. As a buyers agent, I often get the majority of my fee from the seller side and the remainder if there is any is negotiated in the transaction. As a buyer in this market place, it is important to have someone looking out for your best interest who will help you to get the property at the best price with the least amount of anxiety. Best of luck to you!
1 vote Thank Flag Link Tue Dec 2, 2008
I agree with Lori however, you must read your contract with the Buyers Agent carefully because there may be a deficit between the commission paid to the Buyers Agent by the Sellers Broker and the amount or % that is in your contract. If that happens you would be responsible for the difference. We are here in Vero Beach and would be happy to help you!
1 vote Thank Flag Link Mon Dec 1, 2008
Hi Jack, This question seems to coming up a lot lately and buyers are often confused on how it works. Let me try to explain: First-there is no "standard" commission rate either on the buy or sell side. All commissions are negotiable. The most important thing is to find an agent who you believe and trust will work in your best interest from the beginning to the end of the transaction. Second-Yes, almost always the buyer agent fee is paid from the listing agents commission (usually a 50/50 split)-that would be something that you would definetly want to go over with your buyer agent, once you choose one before signing an agreement with them. I hope that helps! Let me know if you would like me to refer a buyer agent who specializes in your area. Good luck!.
1 vote Thank Flag Link Mon Dec 1, 2008
In Florida, seller is the one who pays commision. Split is 50/50 normally, it depends on percentage in listing agreement. For example if it is 6%, - 3% to listing agent and 3% to the buyer/s agent. But it can vary, case to case..

Thank you
Margo
0 votes Thank Flag Link Fri Oct 9, 2009
Jack,
Lucy is incorrect, every realtor does not work for the seller, every state is different and in some states the seller is only required to pay sellers agents buy may pay buyers agents. In other states sellers prefer to pay buyers agents and do not wish to work with sub agents at all. Sub agents leave them open to law suits that a buyers agent does not. In some instances the seller will pay the Buyers Agent and in some the buyer will and in others both will depending what your contract with the buyers agent is.
In Texas you really do not have a Buyers Agent unless you have signed a Buyers Representation Agreement and then it is spelled out what the agent expects and how the agent will be paid. Usually by the seller, even if it is a For Sale By Owner.
I would take the answer from a New Jersey Broker since I have noticed that even in Texas we are not always clear in the agency laws.

I hope this helps

Margaret
0 votes Thank Flag Link Fri Jul 24, 2009
Lucy Kam? Hmmm. A very good example of complete lack of knowledge.
I have no doubt she has an agent with no knowledge.
I will not take the time to reply to this person. To the rest needing to understand and to answer the question;
1. Laws are different in each state. Some states have yet to endorse an exclusive buyer agency relationship due to greed and lack of understanding. The listing agent wants all of the commission.
2. Any information provided by the multiple listing service is “deemed reliable but not guaranteed”. This information, even if in error, is populated to many many web sites.
Buyers assuming this is accurate and true information then goes to the listing agent, (now a buyers or transactional agent) is going to the agent that originally made this grievous and costly error in the “MLS” to buy the home. No check and balances.
3. An exclusive buyers agent has the experience and knowledge to know to check all information that is presented before making an offer.
4. The exclusive buyers agent checks to see the true value of the home on today’s market then presents this information to the buyer. I cannot possibly list all that has to be check on here. Some; Code violations, no permits for work done, liens not yet recorded, zoning for adjacent property etc.
5.If a foreclosure, you cannot expect an agent that tries to list property 30 days out of 31 to suddenly become an expert as a buyers agent and have the expertise needed to understand and give an opinion on the 3-35 page addendum drafted by the banks attorneys let alone be privy to each banks procedures.
I just had an attorney purchase a home from me from another state. He told me, “Joe I do not know what I would have done without your help with inspection results, interpreting the contract and handling all of the details of the closing” He as an attorney did not know the contractual laws in Florida. Even though he understood them, he did not know which items are of concern. Monday we close and you can shortly afterwards, look for his letter of recommendation on my web site. Sunny spot Realty inc..
As for buyers having done this through the listing agent for years and think they are savvy… I wonder how much money they have lost due to overpaying or through other contractual missed opportunities to get the best property at the best price. I hear only their side of the story and am not sure if this is really a buyer or a listing agent promoting their side. What do you think?
If you want to see how a Exclusive buyers agent handles foreclosures with complete details for buyers and agents go to; Buying forclosures/Reo’s
Let’s see if your agent knew this in truth.
Joseph Beauvais Owner/agent 26 years.
Exclusive Buyers agent (239) 770-0686
Covering S.W. Florida
0 votes Thank Flag Link Fri Jul 24, 2009
Zero. We are paid by the seller as per the mls listing.
0 votes Thank Flag Link Tue Mar 17, 2009
Jack,
As stated below, there are no standard fees and commissions are negotiable. A buyers agent is just that His or Her duties and loyalties are to the buyer.
I do not know about New Jersey but in Texas the Real Estate agents are very knowledgeable and retrained and tested every two years.
Our MLS in the Harris and Montgomery County area does not require us to share commissions with any one other than another MLS Broker. We do not pay your attorney - you must. The seller does usually pay the buyers Rep. It is not a requirement but it is a requirement for a commission split of some sort to be on the MLS. with Residential Property .
0 votes Thank Flag Link Sun Jan 11, 2009
There is no standard...commission and split vary broker to broker.
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Mon Dec 1, 2008
Cindi Hagley, Real Estate Pro in Pleasanton, CA
MVP'08
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