StraightTalk Home Buying Guide

Chapter 2. Shopping for a Home

Types of Agents

 

An agent is typically paid a percentage of a home’s selling price by the seller. Even if an agent didn’t list the home but brought in the buyer, the agent is still paid by the seller. Usually the commission is divided between the agent listing the home and the agent who found the buyer. What this means is that unless you have a contract with an agent to represent you as a “buyer’s agent” or “exclusive buyer’s agent,” the agent isn’t really working for you but for the seller. Since the agent is paid by the seller, a conflict of interest exists. How can you expect the agent to help you get the lowest price possible for the home?

You can hire an agent to represent you. This is called a buyer’s agent (or broker). A buyer’s agent is looking out for your best interests not those of the seller. The contract between you and the agent should specify what services the agent will provide you and how the agent will be paid. A buyer’s agent can be paid in several ways: by the seller on behalf of the buyer (the usual commission split), an agreed set fee for the services, or by the hour. Depending on how you choose to pay the agent, this may cost you more out of pocket, but may save you in the long run.

A dual agent serves both the buyer and the seller by acting as an intermediary between them. In this case, the agent is still paid a percentage of the sales price. Using a dual agent may be okay, if you are knowledgeable about the real estate market and have very good negotiating skills.

 

 

 

 

 

Prepared for Corning Credit Union by Remar Sutton & Associates, July 2004. Reviewed and updated May 2007. All rights reserved.

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