Belt Auction

Who pays the buyers agent when purchasing a home?

The home is being sold by Coldwell Banker Real Estate. The agent who is showing us the home says she is a "buyers agent working for Coldwell Banker". Does this mean that we are responsible for her fees or is the seller responsible?

Public Comments

1. generally, the seller pays. especially in this market
2. I love this question. Technically, the buyer's agent is paid a portion of the selling agent's commission. But look at the situation more closely. Who is bringing money to the table? You are, the buyer. You pay the owner (seller), who pays his selling agent, who pays the buying agent. So by following the money, we see that you, the buyer, are actually paying for both agents. Without a buyer, nobody gets paid.
3. Cardinal is partly correct in his simplistic explanation. Without a buyer, no money passes hands. The REALITY of the situation is the fees are typically paid by the seller-some state laws administer this process, and the fees are reduced from the amount paid by the buyer, reducing the net funds back to the seller. An educated review of the HUD statement will show the reconciliation of funds. In a buyers market especially, the real estate commissions can always be negotiated- from the seller perspective.
4. Let me try to simplify how it works When a seller wants to sell a home they enter into a listing contract that specifies the commission that is to be paid to the listing broker, the agent that gets the listing is the subagent of the seller and the agent of the qualifying broker who is the agent of the seller. Your contract as principal is with the qualifying broker who is your fiduciary agent, unless a contractual relationship is defined in the listing agreement that the relationship is not fiduciary, such as; what is called a transaction broker who does not represent only one party but is more like a mediator to all transactions between buyers and sellers. Once the broker receives the listing he makes an offer to all licensees including the licensees in his/her office to split the commission they will earn at closing, with a licensee that brings the buyer. In the offer made by the listing broker to all these licensees, the representation of that agent to the buyer is addressed as, representing the buyer only, representing the seller only, dual agent, or transaction broker and what percentage of the commission to each of those representations will be made. The agent who told you that they are a buyers agent probably meant that they can help you with the transaction as a licensee but if you do not have a written contract with that agent specifying the fiduciary duties to you then they are going to be identified as dual agent, or transaction broker. This issue will be spelled out by the agent in your disclosure part of the offer form when the offer form is completed. The agent will receive the commission percentage through his/her qualifying broker that was offered by the Listing broker to all licensees that bring a buyer who closes, in this case in-house. However if you have a contract to have a licensee represent you as your sole buyer's agent those particular contracts might require the buyer to pay additional costs and or fees to the buyer's agent depending on what additional work that agent is required to do. Simply ask the agent: "how can you be my fiduciary buyer's agent without a contract?" I'll bet you get a quick explanation that should look like the above. Buena Suerte
5. If you didn't sign a buyers agent contract, she is not a buyers agent. That's a whole different conversation. Anyway she gets paid by the selling agent. He will split his commission with her for bringing you in. RE Agent, Remax