You've probably heard that real estate agents make these large commission and that the seller of the property usually has to pony up the dough when it comes to listing and selling their property. But, what about the buyer? Does the buyer need to pay an individual agent or must they go with the listing agent in order to purchase the property?
In a typical real estate transaction there are two agents; the listing agent and the selling agent. Often times, that agent can be the same agent, the agent that first set up the listing and the same agent brings the buyer and sells the property. When a listing agent takes a listing from a seller, that seller agrees to pay a specific commission split between the listing agent and the buying agent were selling agent. (I know that the term "selling agent" can be confusing but it's really the agent that sold the property, which is also called the buyers agent.)
If the same agent list of the property and sold the property to a buyer, that agent would receive the full commission. However, the buyers may not be fully protected since the agent has one main goal, to sell that particular property, not necessarily find the right home for the buyer.
The buyers agent gets paid once the transaction is closed from the commission offered by the seller. Regardless of what home the buyer chooses, the buyers agent should receive a set percentage of commission on the sale of the property. This means that it is completely free to the buyer to use a buyers agent.
Now, this is not to say that a buyers agent would necessarily go for a higher-priced home in order to get more commission. The buyers agent's primary and fiduciary goal and duty is to find the right home for the buyer and negotiate for the best terms and price for that buyer. Negotiating $10,000 or so lower than the asking price will really not deduct that much off of the commission. However, $10,000 to a buyer is quite significant and could affect their mortgage payment dramatically. This alone shows due diligence on the side of the buyers agent.
So, buyers agents are completely free for buyers and you definitely want to use a representation on your home the next time you purchase to protect the confidentiality of your finances, negotiating strategies and terms.
If you're ready to get started looking at homes in the Portland real estate market please feel free to contact our office at any time.