Paying Through the Nose . . .

Audrey ... good point! Any agent can show houses, but a good agent can help a buyer find the right home. I can't think of a good answer as to why buyers aren't more particular. I'm parked to see the responses. Good post.

I've always been of the opinion that the buyer is the one paying the commission...It works that way in every other commissioned sales business...cars, appliances, insurance etc...The commission is part of the price of the product just like homes.

Audrey, this is a thought provoking one for sure. The seller thinks that they are paying everything but you are right the buyer is also paying but with interest.

Audrey,

It is not simply the fact that the seller pays the fee, unfortunately it is how too many agents sell their service with buyers, "oh it doesn't cost you anything, the seller pays my fee, etc." Too many agents go that route.

That's my take.

Jim

Good points

good point, Audrey.    

Audrey,

I firmly believe that part of the role of salesperson is to educate your client...whether it is the seller or the buyer.  The buyer is the cheque writer and therefore the buyer always pays the commission.  Buyers and Sellers don't know the rules unless they are taught.  Once explained, most will understand.  As long as there are salespeople who continue to tell a buyer that they aren't paying the commission, the seller is, this issue will never be resolved.  We can't be afraid to do this because sellers and buyers only do what other sellers and buyers have told them they've done and were successful at !  They don't know any better.  Other areas of education should include commission cutting and overpricing a home.

Kimberly

It is kind of a chicken vs egg argument, but not really.  Yes, without the buyers funds @ closing, the seller wouldn't be paying a commission... but... the commission is being paid from the sellers equity (in most cases). We would see a much different attitude from the majority of buyers if the mechanics flipped and the buyer had to bring funds to closing to pay for the commission in the transaction.  Buyers would be (and in fact are) MUCH more diligent if that were the case.

If the buyer hires an incompetent agent and they bumble a couple of offers the most the buyer would be out is the cost of a couple of inspections, if it got that far.  The cost to the seller for an incompetent agent bumbling two offers could be tens of thousands or more.  Buyers don't get shop worn, if you will.  Sellers have a more tangible asset to protect.

The funny thing is that without the assistance of a skilled professional buyers could end up (and do) walking into a property that is a financial disaster.  I see so many folks here that don't do what I consider to be routing testing and inspections.  When the buyer discovers something post closing it's their problem.  I would rather know and address any issues up front.

The BUYER pays the commission (maybe through the seller's lawyer, here, but no doubt, from the proceeds of the sale... the commission is built in to what the buyer paid for the house). 

It is our responsibility to educate our sellers and our buyers, and show them exactly how things work, and how they can work to benefit both parties.  Our job is not to sell homes. The homes sell themselves.  Our job is helping people find what they are looking for, and educating them all along the way, about every single aspect of that search, and the costs involved - all the costs, including commission. Isn't that what looking after your client's best interests means?

I completely agree -- the buyer needs to make sure they are well represented because we aren't just keepers of the keys who get paid by the seller. We have to negotiate the contract and professionally guide them through the process. A mistake at any stage of the game can be costly.

Audrey, the buyer does pay the commission!  I remember the old days in cases where the seller paid the agent directly, the amount of the buyer broker's fee was always subtracted from the sales price (or put in as a seller subsidy). 

Audrey.  I agree that it could end up costing the buyer money in the end.  When I do purchase again, I will use a real estate agent who is not only local to the town that I choose to buy in (or county would be o.k. because I live in a resort community where the towns are small) and is familiar with the needs of a young family. 

Years in the business won't be as important to me IF the agent came from a crossover field (like finance) and IF the agent knows the neighborhoods and has done the research.  It will be the knowledge that will sell me AND the attitude:-)

Audrey, in my area, we are still dealing with a strong market, and multiple offers.  Things have slowed down a little bit, but the prices haven't come down.  I don't know what they will be like if and when the market changes.  I guess I will report back when that happens (hopefully not in the near future). :)

A-men Sister...  I have a listing that is currently under contract.  The buyer is local, but the agent is from 2 hours away... he doesn't know a think about the area, prices, etc.  I just don't understand why you would let someone who isn't familiar with the area represent you. 

P.S. - I think the buyer brought the house to the agent's attention...  I don't get it.