How Do Real Estate Commissions Work? Do I Have to Pay Real Estate Commissions when I Buy?

How Do Real Estate Commissions Work? Do I Have to Pay Real Estate Commissions when I Buy?


This is Jeff O’Leary coming at you with
another episode of Keeping Real Estate Real! So how do real estate commissions work? If you google how real estate commissions work you’re going to get some
long-winded answers but I don’t find them very good especially when it comes to home buyers So I’m going to give you my answer and I hope this helps you in your
decision. So #1… Real Estate Commission’s are “normally”
but not all the time paid for the the seller. So what normally happens in our market is when
someone lists their home for sale the Listing Agent’s going to charge them a full commission which includes the Listing Agent’s services Plus any Co-operating brokerage commission which ‘aka’ means any buyer agent who comes will be paid form the listing agent. So that’s how it normally works However there are other situations in real estate where the buyer may be liable for the commission. So #1, if the home is privately listed for sale and the buyer brings their realtor and … the person selling their home refuses to pay a commission the buyer may be liable to pay a commission. Now the good thing is the
buyer’s agent should disclose this to the buyer ahead of time, before putting in any offer and a lot of times it can be negotiated into the price. So you’re hiring a buyer agent for his expertise and hopefully he’s able to get you such
a good deal that is even worth paying the commission. But again, that’s very rare most for sale by owners do actually pay commissions. The second is if someone’s offering a really low commission now you’ll notice when you
sign it sign a buyer representation agreement there’s a spot where the buyer
agent will put how much they do get paid commission. So when you’re signing agreements with buyer agents make sure you understand this number because if a listing agent is not offering that commission there is a chance that you could have to pay the difference. Finally the third reason you would ever
have to pay a commission as a buyer is if you were under contract with a
buyer’s agent… and you went to an open house and decided I’m gonna use another
realtor to get this deal done because he’s cut me a deal… Well if you’re under contract you have to honour that contract and you could be liable for that
commission. Now having said that I’ve been in this business well over seven years and I’ve worked with tons of buyers and I’ve never ever had one buyer pay me one penny. So at the end of the day most of the time it does work the way that everybody says but a lot of people don’t explain that and you should be aware that buyers could pay commission if the
situation arose. So there you have it, I’m Jeff O’Leary talking about how commissions are paid in real estate if you have any questions feel free to call
or email me… Keeping Real Estate Real and I’m out!

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