Who Pays the Buyer's Agent in a Real Estate Sale?

Are Buyer's Agents Really Free to Home Buyers?

A question I’m commonly asked is are buyer's agents really free to home buyers? The services of a real estate agent, like any quality service, come with certain costs. In real estate, “quality service” is the name of the game, and the value of a great agent often exceeds any monetary fee. The trusted Ulster County real estate advisor is worth every penny, serving as a guide, aid, and resource of every kind. A good agent is a local expert and acts as your trusted real estate advisor. That being said, who is responsible for paying the agent representing the buyer’s side (known as the “Buyer‘s Agent” or “Buyer Broker”)? Is it the purchaser of the property, for whom the agent has been working to find a suitable home? Or is it the seller of the property, to whom willing and able buyers have been brought to purchase their property? Agent commissions, and who is required to pay them, can sometimes be confusing. Let’s explore the general make-up of who pays the buyer’s agent and why.

Buyer’s Agents – Bringing Qualified, Willing, & Able Buyers to the Table

Commissions are paid at the closing and come from the proceeds of the sale. In a traditional sale, it is generally accepted that the seller pays the buyer brokerage for bringing a qualified, ready, and willing buyer to the table. (In a short sale, where there are no proceeds for the seller, the bank hopefully picks up the tab - but that’s a completely different topic and we can address that another time). In some cases, since commissions are always negotiable, the commissions offered by the seller of the home may not cover the full fee that the buyer’s agent charges. So then what happens?

Most of the time the, buyer’s agent will simply accept what’s offered and be happy with that. However in today’s ever challenging real estate market, many hard working agents are not accepting anything less than their full fee. One might ask what a “full fee” even is today, and as we mentioned, it depends on the individual agent. Historically speaking, we have seen commissions ranging from as low as 1% all the way up to as high as 7, 8, 9 or even 10% depending on what type sale it is, residential, commercial, land, etc.

Both Buyers & Sellers Should Know What They’re Being Charged For

Having such a wide range, it is important for both sellers and buyers looking for Ulster County, NY real estate to know exactly what they are being charged for. Buyers and sellers should always do their research and have the right to negotiate the best and most fair rate for them personally. Be aware that not all agents and brokerages are created equal. It will become quite obvious that there are brand new agents and highly seasoned real estate professionals who have been in the business for a long time. What it all boils down to is value. The absence of value is what creates concern about price. Once a buyer questions value, they will wonder if they are over-paying or not. Most buyers who have doubts simply don’t buy. So it’s important for agents working with buyers to prove value to them and explain how the process works and who pays who. Managing the expectations of buyers (and sellers) is very important in real estate.

So who pays commissions? The Answer Isn't Always Clear...

In terms of real estate, when discussing real estate commissions and who pays, the answer isn’t always so clear. If the seller does not offer or is not willing to pay the buyer agent’s full fee then the buyer may be asked to make up the difference. As we said in the beginning, many buyer agents will simply accept what’s being offered to them. But buyers should be aware that if their agent is willing to flex on their hard earned fee, they may also be willing to flex when it comes to negotiating for that buyer. That’s why it is important for buyers and sellers to know what they are paying for. As the old saying goes, “you get what you pay for…” Personally, as long as I am comfortable with and trust the person I’m working with, and see value in the services they provide, I’d be willing to pay their fee if need be.

To learn more about trust and other real estate advice, take some time to read more about the most reviewed real estate agent in the Hudson Valley by visiting the most informative real estate blog in Ulster County NY.

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