However, it’s unlikely that both the buyer and the seller will reap the benefits of not paying real estate agent commissions. It works like this: An owner selling on his own (FSBO) will price the house based on the sale prices of comparable properties in the area. Many of these properties will be sold with the help of an agent; therefore, the seller retains the percentage of the home’s sale price that might otherwise be paid to the real estate agent (usually 3.5%). Buyers looking to purchase a home sold by an owner without an agent may believe they can save money on the home by not having an agent involved, so they look solely at FSBO houses. They might expect money to be saved and make an offer accordingly. Unless the buyer and seller agree to split the savings, they can’t both save the commission, and that’s if the commission amount did not already lower the listing price to make it more market-attractive. Here’s a short list of the advantages that using a real estate agent can bring to your buying experience:
• Education and experience • A buffer between you and the seller • Neighbourhood knowledge • Price guidance • Market conditions information • Negotiation skills and confidentiality • The ability to handle paperwork • The ability to handle closing questions • Relationships for Future Business
It’s essential to know the “ins and outs” of real estate agents before you bring one along to help in your search for a home, just so that you might know what to expect and what will be expected of you. 5
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