This morning I was reading Tom Ferry's blog about how knowledgeable agents believe that they are explaining something to their clients, but they really are not. The culprit of this miscommunication, as explained in the blog, is usually jargon (that age-old industry language that only people in the industry understand).
One such example the blog gave was answering the question of how agents are paid. While I may be mistaken, I believe that the explanation that I provide during every buyer's consultation is very clear. Nevertheless, correct me if I am wrong if it leaves you even more confused. Read on as I explain
How Do Buyers Agents Get Paid?
While going over the Buyer's Agency Agreement (which I never work without), this is what I say:
As your agent, in most cases the seller pays me. For homes listed in the MLS (explanation provided), it is stated very clearly who is paying the commission and how much. However, for homes not listed in the MLS, for example For Sale by Owner homes (FSBO), it may not be clear if the seller is paying the buyer's agent commission. In which case, I would reach out to the For Sale by Owner to see if they are willing to pay a commission to the buyer's agent for bringing a buyer that result in a contract and ultimately a successful close. (Note: close or closing refers to the day where we all meet at the attorney's office to finalize the sale and the seller transfers the deed to the buyer).
If the For Sale by Owner is willing to pay the buyer's commission then I will have both of you sign a disclosure form indicating who will be paying my commission and how much.
If the For Sale by Owner is not paying a buyer's agent commission, then you will be responsible for paying my commission at closing.
In either case, I will make it very clear to you who is responsible for paying my commission so that everyone is clear.
Am I making sense?