The buyer’s agent commission is always paid by the seller, with rare exceptions. In California, all real estate transactions are handled by an Escrow Company, which is a neutral party in the transaction. The Escrow Company role is to make sure that all of the documentation on the transaction is in order and then process the transaction towards a close. The sales commission is paid by the seller as one of the closing costs expenses on the seller side. The Escrow Company then disburses the commission to the selling broker representing the buyer. A maxim in real estate is, “No matter how it’s set up, the buyer always walks away with the house and the seller always walks away with 94% of the purchase price.”
MORE ACCESS TO THE REAL ESTATE MARKET
A real estate agent will have better access to the market, and a special knowledge of local conditions. The agent is a full-time liaison between sellers and buyers. An agent will have ready access to other properties listed by all other agents. Buyers’ and sellers’ agents know how to put a real estate deal together. A real estate agent will track down homes that meet your criteria, contact sellers’ agents, and secure appointments for viewing the homes. On their own, buyers have a more difficult time with these things. This is even more so on the case when a buyer is moving due to relocation or employment opportunity and engages a “buyer’s agent” to handle matters.
NEGOTIATING IS HARDER ON YOUR OWN
A real estate agent will keep the transaction “at arm’s length,” such that personalities and emotions do not become involved. Price negotiations take a special skill and understanding of the psychology of offering and counteroffering.
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