Buying a Home in Salt Lake City, UT

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Buyer's Agents are NOT Free

Many buyers have heard agents say that it doesn't cost anything to have professional representation as a buyer. This is simply not true. While the cost of NOT being represented in a real estate transaction is certainly greater, nearly every buyer's agent is compensated with money that, in a roundabout way, comes from the buyer.

For a listed home, a seller often contracts with a listing brokerage to pay a commission when the home sells. Usually, the listing brokerage offers to split that commission to compensate a buyers agent who brings a buyer for that home. If a buyer comes without representation, the listing brokerage usually keeps the entire commission.

Some agents will say they are paid "from the proceeds of the transaction." But where do the proceeds come from? That's right, usually from the buyer. The buyer gives the seller money for the home and the seller then pays their agent, who then, usually. pays a buyer's agent if there is one.

What happens if a client of a buyer's agent who says their services are "free" comes across a For Sale By Owner who is unwilling to pay any fees to any agent? According to the paperwork that many agents have buyers sign, the buyer will likely be on the hook to pay those fees themselves. So, is representation free? Obviously not. For this reason, many of the agents who advertise their services as "free" will highly discourage clients from considering For Sale By Owner homes or other properties with low or no compensation being offered to the buyer's agent.

We are clear up front that representation costs the buyer money. A buyer is responsible for our fee. In every case, and per our agreement with clients, we credit any compensation received from any party to the transaction toward what the buyer owes, which in some cases, means nothing, in other cases, it could be a decent sum.

In general, we believe that a buyer gets what they pay for with regard to representation. If an agent won't even be clear about their fee, can you really depend on them for honest representation?

  • Do you have excellent credit?
  • Do you plan to purchase a $300,000-$800,000 home within 90 days?
  • Do you have a good down payment, or are you paying cash for your next home?
  • Do you want an agent who will act in your best interest throughout your transaction?

Homebuyer Representation, Inc. - Exclusive Buyer Agents

Don't work with just any agent. Get YOUR OWN agent!

Call us at (801) 969-8989 or contact us today via the link on this page for a free consultation.

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Salt Lake City, UT - Exclusive Buyer Agents (EBA)

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Comment balloon 3 commentsBenjamin Clark • September 06 2013 11:41AM

Comments

It's semantics.  The listing agent has the BAC off their listing commission, but the point of the buyer bringing in funds to buy the home, is the other school of thought.  Either way, its in the best interest of the buyer to have their own buyers agent, better yet, an Exclusive Buyers Agent!

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) over 4 years ago

I hear what you're sayin, but I am just not a big fan of using a buyer/broker agreement.  I have not ever had a problem keeping the buyers that I wanted to keep, and actually don't feel like the agreement would hold up in court.  I could be way off, even wrong.  But a lot of agents DO use them, and they seem to work for them.

Posted by Jean Hanley, Specializing in Folks Who Want To Buy/Sell Homes (Coldwell Banker Kivett Teeters) over 4 years ago

Well, the proceeds come from money the buyer has paid but it actually comes out of the Sellers proceeds.  Aside from a FSBO situation, the cost to the buyer is generally no different than if they went without a buyers agent.  The Listing Agent has a contract with the Seller for a certain amount. That amount is due contractually whether a Buyers Agent is involved or not.  

But the cost of NOT using a buyers agent.....well, it could be very pricey.

Posted by Christine Smith, Exclusive Buyer Agent & Attorney, Canton, MA (Buyers Brokers Only LLC - www.BuyersBrokersOnly.com) over 4 years ago

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