Many people ask if working with a buyer agent when buying a home is free. It's very important to understand how buyer agency works and the benefits of working with a real estate agent that specializes in buyers.
When buying a home in Ohio through Cutler Real Estate and most brokers, there is no commission paid by you for using a buyer agent. At Cutler Real Estate, we believe buyers and sellers should each have their own representation during the home buying and selling process. Each side should have an agent to handle the paperwork, details and coordination of actions from beginning to close. Some real estate companies will make you sign a contract to work with them and some will even represent both parties at the same time. We don't bind our buyers and only represent either the buyer or seller, never both at the same time. In other words, I can work with you while selling your home but not the buyer buying your home and the other way around.
Most real estate brokerages will charge a processing fee ranging from $150-$250. This fee is included in your closing costs and it covers all handling and storing of paperwork for five years. Here at Cutler we are on the lower end with a Transaction Fee of only $175.
Many people think that they have to pay a commission to the buyer agent. Only the seller pays the commission when their home has sold. The commission they pay covers both buyer and seller agents. The seller's agent determines how much the buyer agent will receive. It used to be standard for buyer agents to receive 50% of the commission as they're doing half of the work in the transaction. In today's real estate market, many selling agents keep more of the commission and a 60/40 split is common. It's important for you to understand and know this if you plan to sell your home using an agent. You may want to insist that they give at least 50% if not more to the buyer agent as incentive and encouragement for them to show your home and help sell it. Get it in writing on the listing agreement. My agents and I believe that a 50/50 split is fair and equitable and in the best interest of our sellers. Unfortunately, most don't realize how the commission is split or paid.
Working with a buyer agent is a crucial part of buying a home. An experienced Realtor will:
- Best match you and your needs to properties on the market.
- Identify new homes coming to the market that aren't listed yet.
- Know the history of a property and its true value.
- Negotiate on your behalf to get you the best price and terms.
- Explain and guide you through all paperwork, steps and laws.
- Deal with the seller's agent and handle potential negotiation issues.
- Walk you through the home inspection process, escrow and close.
- Give you experienced advice on lending, insurance, taxes and title.
- Refer you to top, reputable industry experts in the area.
- Be your advocate when it comes to repairs and contract changes.
- Handle all follow-up on your behalf making sure all steps are completed.
- Make life easier for you during your move by coordinating the close.
One bit of advice - If you're out looking at homes on your own, be careful going to open houses, calling yard signs or ads. The person answering the door or phone on the other end will more than likely represent the seller. Once you are in their care, it's hard to now bring in your own agent. Some seller agents won't honor another agents involvement. If there is no buyer agent in the transaction, the seller's agent keeps all of the commission. It's best to pick a buyer agent in the very beginning of the process and have them work with you from the start.
View it as having your own attorney in court. You wouldn't want the other side's representation working with you or knowing your personal details, thoughts or plans. Anything you mention to the seller's agent can hinder your final cost, negotiations and ultimate outcome.
Feel free to me at JBraddock@Cutlerhomes.com or call me with any questions or to discuss the process further. Whether you've been actively looking for a home or are just starting, a good buyer agent will be able to fill you in on tips and ways to minimize your stress, costs and time. Email, text or call, we're always available and happy to help.