Are buyers agents more costly for the buyer than sellers agents? How do they get paid? Do you need to come up with additional money to pay them?

Asked by Les, bklyn Sun Jan 23, 2011

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14
Mitchell Fel…, Agent, Brooklyn, NY
Sun Jan 23, 2011
Dear Les:

No, buyers agents are not more costly than seller's agents. As a matter of fact, here in Brooklyn, most of the time even the buyer's agent gets paid by the seller as a sub agent to the seller's agent. I have come across times when the buyer may want to pay their own agent (buyer's agent) themselves. The thought being that if the seller's agent does not have to split their fee with the buyer's agent it will further motivate them to make the deal.

In the end who an agent represents does not determine who pays them. The bottom line is that either party (buyer or seller) can pay the agent, the difference is that a buyer's agent has a fiduciary responsibility to protect the buyer's best interest and a seller's agent has the fiduciary responsibility to protect the seller's best interests. Who an agent represents and who pays them are based on the written agreement that the agent has with his or her customer/client. As per New York State law, all agents when working with consumers must disclose to all parties they work with exactly who they work for. There are even occasions whereby an agent can represent both the buyer and the seller, this is called dual agency.

Either way, you do not need to come up with extra money even if you have a buyers agent represent you unless you decide that you want to pay your own buyer's agent. In addition, if you sign an agreement with an agent to be your agent as a buyer, you may have an obligation to work solely with that agent and it would prohibit you from working with other agents as a buyer. So just make sure you know exactly what you are getting yourself into. You should discuss all this with your agent and/or attorney.

If I can be of further assistance please let me know. Good luck!

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
1 vote
David Rogoff…, , Brooklyn, NY
Fri Feb 25, 2011
We don't think you'll need a buyers agent.

We must concur that Mitch provided a very comprehensive answer.

Bonnie Chernin and David Rogoff
Fillmore Real Estate Branch #19
2926 Avenue J
Brooklyn NY 11210
917-593-4068 (David’s Cell)
646-318-5031 (Bonnie’s Cell)
davidrogoff@fillmore.com
0 votes
allan erps,A…, Agent, Pearl River, NY
Thu Jan 27, 2011
Hello Les, Here in Rockland County(another foot of snow!!), with very few exceptions the Seller pays the Commission. An ABR(Accredited Buyer Representative) was a Continuing Education Course geared to help specialize in that field. Think that is something for you to consider. Best of Luck, Allan
0 votes
First Last, , 90002
Thu Jan 27, 2011
When reading out-of-NYC-area answers, remember that local business customs vary widely on this, and that everything about commissions is negotiable.

In some states (Hawaii comes to mind) buyers do sometimes pay their buyer's brokers a significant commission, but consider that a search in Hawaii might mean flying from island to island!

Here in NYC we have subways :) and by custom the seller's attorney writes the commission checks for both brokers, unless some rather unusual arrangement is agreed to in advance. If you're in any doubt at all, just ask.

It's worth remembering that no matter who writes the checks, ALL cash ultimately comes from the buyer or the buyer's lender, one way or another. Only the buyer puts money on the table and there is no party without you ;)

Karla Harby VP
Charles Rutenberg Realty
kharby@crrnyc.com
0 votes
Charles D'Al…, Agent, Brooklyn, NY
Tue Jan 25, 2011
Mitchell Feldman very good answer! There you have it Les
0 votes
Fajardo Dela…, Agent, Flushing, NY
Mon Jan 24, 2011
Les
Very good question. The buyer agent will work only for the best intres of the buyer. In most cases negotiationing on your behalf saving you time and money
Web Reference:  http://www.desire2own.com
0 votes
Sarah Klamm, Agent, Wellsville, KS
Sun Jan 23, 2011
One more thing in addition to the other great answers. Make sure you ask the agent who shows you homes if they charge extra fees. Some will ask you to pay extra if the listed commission % doesn't meet their requirements. There are others who will charge you "documentation, administrative or brokers fees". We would never charge our buyers, but there are some who do.
0 votes
Bill Ley, , Austin, TX
Sun Jan 23, 2011
Since “your” agent gets paid by the seller, is he really “your” agent? There’s an inherent, not readily admitted conflict of interest here you must be mindful of. There are Buyers’ Agents who will agree to be paid by you, usually by the hour, and not be paid anything by the seller. The advice of such an agent would be more independent, whether or not it’s better. The big catch is you have to pay this fee even if you never succeed in buying a property.

You might negotiate a variable fee, just for example: $50 an hour for computer research, $75 for opening houses you want to see, helping you decide how much to offer and for drawing up offers and counter offers, a flat $250 to attend the closing. You should put ceilings on each of these.

Paying your own Buyer’s Agent can save you money. Your written agreement with him should include a prohibition on his acceptance of any other compensation. So he’s prohibited from accepting part of the listing agent’s commission. So he can rebate that (typically 3%) back to you at closing. What you paid by the hour will surely be less than the rebate.
Web Reference:  http://BlackSheepRealty.com
0 votes
Anna M Brocco, Agent, Williston Park, NY
Sun Jan 23, 2011
Keep in mind that the commission is negotiated between the seller and his/her agent; if two agents are involved in the transaction the commission is shared; it is paid at closing out of the proceeds of the sale--therefore as a buyer you pay no commission, unless you have an agreement with your agent to pay above what the seller is already offering, in that case you would pay your agent the difference...discuss your question with your agent as it relates to your specific situation.
0 votes
Dallas Texas, Agent, Dallas, TN
Sun Jan 23, 2011
GREAT QUESTION:

Thank you for asking !

When you purchase a property the owner pays the agents at closing via their proceeds from sell of the property.

And when you go sell the property you will also be held responsible of paying all Realtors fees

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes
Jack Menashe, Agent, Brooklyn, NY
Sun Jan 23, 2011
One way or another it all comes from the same place - the buyers funds. Sellers brokers already negotiated the commission and work primarily for the seller.

Buyers brokers work for the buyer and should be compensated accordingly for the better a deal they make for the buyer less of a commission % they earn so an agreement should be structured on a scale where they are compensated more for saving the buyer monies.
0 votes
Phil Rotondo, Agent, Melbourne, FL
Sun Jan 23, 2011
Les,
In most cases the buyer's agent's company is paid a percentage of what the owner is paying to list and sell the property. So in most cases there is no cost to the buyer for this service.
Web Reference:  http://www.321property.com
0 votes
Spirit Messi…, Agent, Tucson, AZ
Sun Jan 23, 2011
No. Sellers agree to what they will pay a brokerage up front. Here in Arizona working with a buyers agent will cost you nothing, as the sellers pay for it. Find a good local Realtor, ask for referrals. Good luck.
0 votes
Nathan Hill, Agent, Williamsburg, VA
Sun Jan 23, 2011
TYpicallly, the answer is no. Some buyers agents and brokers charge a retainer fee; however, I realize you are buying in New York, but usually the seller pays the commission on the transaction to the listing agent. It is up to the listing agent to determine the fee that will be "shared" with the buyers agent. I can't speak for the laws and customs in every state, but if I were you, I would always ask the question if there is a retainer fee when you are presented a contract for buyer representation which should outline how the buyers agent gets paid.
0 votes
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