"It's a standard clause in a buyer agency agreement that you'll pay 3% to your agent IF the seller doesn't pay it. "
I'm sure the commission is a blank to be filled in and the NWMLS would not make an absolute percentage par of the "standard" language.
While I don't readily use buyer agency agreements, I don't think it's possible for any standard form to include a set commission amount.
In general the 3% is a standard practice by most realtors.
I am assuming that you have been given one of the pre-printed forms from the NWMLS or a specific company form.
Odds are it is the form 41A, In which case the buyer is agreeing to pay the broker/buyers agent 3% of the sales price on the home that they purchase.
Typically the listing agent has an agreement with the seller to split their 6% commission with any co-broker/ or buyers agent, thereby, according to the contract, eliminating the commission due from the buyer. In that type of contract the buyer may have to pay an amount if the listed buyersâ€™ agent commission is less than 3% or if your agent finds a FSBO and the seller doesn't agree to pay the commission. I hope this helps.
You should also be given Law of Real Estate Agency Pamphlet (Rev. 1/98) which will describe in detail the different types of agency in relationship to you as a buyer.
Most brokers representing a buyer do not have them sign the buyer broker agreement.
If you have further questions, I'd be happy to discuss them with you.
Columbia Real Estate Group
In a market so crowded with inventory I am utterly amazed when I see people still trying to offer 2% or 2.5% in an effort to save a few bucks.
With the way the market has slowed down some there are special incentives that sellers are offering to buyers, and buyers agents. For example: Trips, buyer bonuses, even cars. If an agent is getting something other then a typical commission 3-4% or any bonuses, this needs to be disclosed to the buyer.
The buyer needs to be aware that there are special bonuses that the agent is getting. A good agent will also explain any bonuses that they are getting.
So what it boils down to is if you sign the mls buyers agreement and you say yes to a 3% commission that you will pay. If your agent showes you a property like new construction and they only offer 1.5% commission then the agent could ask you to pay the diffrence. So it is good to say on the agreement that the agent will only get what the seller is offering you and you are not responsible for anything else.
3% is generally what I charge my buyers unless there are some special circumstances. Commission is absolutely negotiable. I am always willing to talk to buyers and sellers to see what their situation is.
Your buyers agency agreement should also have other terms like length and scope - make sure to look at each one of these to be sure that they apply to your specific situation.
Personally I have never used a buyers agreement for this reason. I think it scares clients and raisies concerns just like this.
You need to ask what happens if the house you pick is offering less than 3%.
As to "standard practice", all commission are negotiable and there is not supposed to be a "standard" fee. It depends on the sale price. At $250,000, 3% is reasonable IMO. At $900,000 it is not. Look at the dollars and "sense" and not just the percentage.
I hope that helps...
Assuming that the acquisition price and the purchase price are the same thing then, yes, 3% of the purchase price is the industry standard paid by the seller for low to upper mid priced homes in Seattle. However there are some exceptions especially if you are looking at homes outside of the Seattle area where commissions ranging around 2.5% are more common.
If the agent is using the Northwest MLS Buyer Agency Form 41A, there is no reference to "acquisition price" in that document. It refers only to the commission which is based on the sale price (puchase price). Depending on what the agent writes in to that document would indicate if, and what amount, the buyer would be liable to pay buyer agent if the seller was not paying a full 3% commission to the buyer agent.
If the agent is using a document other than the form 41A, I would need to know more specifics on the phrasing.
Buyers rarely will actually pay any commission to a broker. However that being said there is still a chance that you may have to pay something when you do sign a buyers agency agreement. The commission is usually paid by the seller at closing. However if the seller were only to pay 2.5% or 2% then you would have to pay that difference at closing.
In other words if the Sales office commission was 2.5% and you greed to the standard 3%, you would be liable to pay your agent the difference of 0.5%. I personally have never seen a Buyers Agency agreement that cost an additional percentage on top of what they are getting from the Sellers.
Hope this clarifies things better for you. Best wishes in your housing search.
Some agents regardless of who they work with require that this agreement be signed. Three percent of the sales price of the home is the usual commission that the buyer's agent receives as a part of the sale.
When you agree to a buyers agency agreement make sure that you are comfortable with the terms and ask your Realtor to explain all the facts.