Gone are the days when a simple handshake could consolidate a working agreement between a buyer and his real estate agent. Instead of a handshake, the buyer`s agents present buyers with a document called a «buyer brokerage contract» – and you may not know what it is! Payment is described in this section and many buyers have questions about it. In 2019, the average commission rate was 5.702%, but can reach 3%. Some real estate agencies will accept a few hundred extra dollars, but don`t worry! You, the buyer, do not have to pay your real estate agent`s commission. Once the transaction is completed, the seller pays his agent (the listing agency) all commission fees. Then, the listing agency pays the buyers` agency what is due to them. But what if one day buyers call realtor® say that a friend of a friend who happens to be a real estate agent just passed them through a house that was perfect, and they made an offer. Since licensees regularly use buyers` brokerage contracts, it is important to understand when clients need to sign a brokerage contract. From 1 January 2017: if you are in a non-exclusive agreement, you, the buyer, can work with other agents and buy a property. However, brokerage first calculates a remuneration and two empty lines have been used for flexibility. Examples of what can be inserted are as follows: here is the amount of compensation that your agent earns in the event of a sale. This is usually 5-6% of the selling price and, like most things, is negotiable. The text of the document should also clarify that if the seller pays the compensation for the proceeds of the sale, you are not required to pay anything more.
It is very unusual for a buyer to be asked to pay the commission out of pocket…