This post started as a response to comments in another blogger's comment thread on the topic of how messed up the real estate industry is in the areas of representation and how compensation can tempt agents to do things that are not in their client's best interest.
The discussion started over whether or not buyers or sellers were getting true representation and loyalty from their agents, or if the agents were only looking out for themselves and/or the companies they work for. There was discussion over whether it was ever right to double end transactions (get paid twice as much by "representing" both the buyer and the seller in the same transaction).
Again, both traditional agents and single agents (agents who will only represent either the buyer OR the seller in the same transaction, but not both) argued over where the compensation for services comes from.
There are many agents in the industry who perpetuate the false idea that working with a real estate agent is "free" for buyers. You can find a good number of agents who fall on all sides of this argument.
Some argue that because most listing brokerages offer some compensation to buyer agents who bring a buyer to the table for a specific property, the money is coming from the listing brokerage. They say:
"The money comes from the listing brokerage"
Sellers take exception to this, of course, as they believe they are the source of the compensation. Most sellers are usually bound by the listing agreement to pay an amount that covers their agent's company's fee, as well as the portion of that fee that the listing brokerage offers to buyer agents. They say:
"The money comes from the seller"
And then, educated buyers and their agents understand that since NONE of the money would be paid out to a buyer's agent without the buyer bringing the funds for the total purchase price, it is ultimately the BUYER who is paying the costs of the transaction, and therefore, those costs are real costs to the buyer and are NOT FREE. (Yes, one could argue that the buyer even pays the listing brokerage's commission too.) They say:
"The money comes from the buyer"
Regardless of where the money ultimately comes from, the most important thing you need to know is that when you hire a professional, YOU are paying for those services in one way or another. So I say:
"The money comes from YOU."
If you are planning to buy a home, answer the following questions:
- Do you have excellent credit?
- Do you plan to purchase a $300,000-$800,000 home within 90 days?
- Do you have a good down payment, or are you paying cash for your next home?
If your answers are "YES", Hire a professional who is truly on YOUR side!
Call us at (801) 969-8989 or contact us today via the link on this page for a free consultation.
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