HAVING YOUR OWN BUYER REPRESENTATION FAQ: HOW DO BUYERS AGENTS GET PAID?
How Do Buyers Agent Get Paid
How Does a Buyers Agent Get Paid?
In the most likely scenarios, the Buyers Agent services are FREE and Buyers are not going to be paying for this directly.
There are some circumstances where a Buyer may pay their Buyers Agent for services:
- A real estate agent can charge a retainer
- A real estate agent can charge a flat-rate commission
- A real estate agent can charge an hourly rate
In most cases, however, a Buyers Agent is compensated at the close of a successful transaction through an “Offer to Compensate” from the Listing Broker/Brokerage.
Buyers Agents Get Paid Through a Commission From the Listing Brokerage NOT the SELLERS!
Let’s not get TOO technical, but here’s a summation:
- Listing Broker enters into a “Listing Agreement” with Seller(s) — in that agreement, sellers and listing agents agree to their terms and conditions, including (among other things), representation of the Sellers. The commission the listing brokerage charges to market, advertise, represent the sellers . . . is agreed to in the Listing Agreement.
- Listing Broker(age) is a Member of the RMLS
- Buyers Agent is a Member of the RMLS
- RMLS is a Membership Organization with their own rules and protocol
- Member Agents agree, when taking a listing, to co-op (cooperate) their broker commission (#1) with the agent who secures a buyer . . . AKA: The Buyers Agent, AKA: the Selling Agent
- The Co-Op Fee is OFFERED to the Buyers Agent via the Listing Agent in the RMLS as an “Offer to Compensate” and is a designated as a: “BAC” percentage of the sale, or a dollar amount — and both these amounts may/can vary. [BAC = Broker Agent Commission]
- After a successful close of the transaction, the Buyers Agent receives the commission set out in the BAC.
Bottom line: The Listing Broker OFFERS TO COMPENSATE the Buyers Agent for bringing their client (the Buyer) — to the listed property, as the procuring cause.
———–> If you are a BUYER and want to have your OWN REPRESENTATION . . .
Have a Buyers Agent, it’s FREE to you! <———
According to the National Association of Realtors®
- Standard of Practice 12-2
REALTORS® may represent their services as “free” or without cost even if they expect to receive compensation from a source other than their client . . . (Amended 1/97)