There are many ways a Buyer Agent can be paid for their services. I will cover the most common here. In addition, there are hourly basis fees that are very expensive and are usually used for purchasing large commercial properties that are very time consuming and take months to negotiate. An hourly basis is NOT recommended for residential properties. You might want to CLICK HERE to understand what a listing broker is.
Here is what it used 99.99 % of the time for residential properties.
I have illustrated a mathematical example. BE ASSURED THAT 100% of
our fees come from within the purchase price of the home.
Purchase price of the home is $200,000.00 This is the final negotiated purchase price.
Seller Negotiates a Commission
With Listing Broker to Sell his home
for 5% of the Purchase Price.
5% of Purchase price is
$10,000.00 This goes to the broker who listed
the home for the seller. If he sells the home
he keeps the entire commission. Usually 50% goes to the listing broker
and 50%
goes the the selling broker. A selling broker does not exist if a
buyer agent is used.
Listing Broker contracts with
other listing agents to pay 1/2 of the
5% listing commission.
1/2 of the 5% listing Commission
$5000.00 This goes
to the broker who listed the home IF his office also sold the home.
IF his office
did not sell the home and another listing office sold the home, the "other"
office gets this
commission of 50% of the total listing commission which is $5000.00
BUYER AGENT FEE
$5000.00 Seeing that
we represented the buyer, We ask that the 50% selling agent commission
be
returned to you through your attorney representing you the buyer.
In turn the attorney
writes us a check at the closing equal to the 50% commission. its all included
in the
purchase price of the home. You did not use a conventional
seller agent. Thus no
$5000.00 commission is due to a seller agent, but due to the buyer agent.
Why would we negotiate a better price if we are paid on a percentage
of the sale price of the home??
GREAT QUESTION!
In the above example lets say the asking price was $210,000 and you
wanted it for $200.000. Here is the difference in our fees based
on a 5% listing commission.
Sale Price: $210,000.00 $200,000.00
5% Listing Commission
$10,500.00
$10,000.00
50% of the 5% Listing
commission to Buyer Agent
$5,250.00
$5,000.00
NET DIFFERENCE + $250.00 for a $10,000 price difference.
As you can see a $10,000.00 price change in purchase price results in a $250.00 commission swing for the buyer agent. Keep in mind that the Buyer Agent office gets 50% of the commission of $5,250.00 in this case, and your personal buyer agent who works for the office would get roughly half of that. So to your personal buyer agent the difference net result is about $125.00. I know that I for one would not be willing to sacrifice my reputation and career in real estate for $125.00 or $250.00 from bad publicity or bad word of mouth. We all know how bad word of mouth travels much faster that good word of mouth! WE WILL WORK TO GET THE LOWEST ATTAINALBLE PRICE FOR YOU.
For More Information Contact us at 781.279.3015 OR E-mail us at homebuyeragent.com