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With the Internet becoming popular as buyers' landing-place in real estate, the discount Realtor is thrust in the front line. Is this important for consumers? How Is a Buyer Agent Commission Amount Determined? To start with, who decides on the buyer's agent pay? Is the MLS listing a point of reference with regards to the fee of the buyer's agent? Without a shadow of a doubt, no. Many people believe it is, but the buyer agent commission is absolutely not decided by the amount a seller is willing to add toward a buyer's agent fee. The pay a buyer's agent receives (at least in Texas) is concluded entirely between the buyer and the agent he hires, as ordered in a Buyer's Representation Agreement. Practically saying that the buyer gives his agent his compensation. It is the Buyer Rep Agreement that dictates the buyer agent's compensation amount, not the MLS Listing. The buyer accedes to the 3% pay for our services as agreed upon on the Buyer Rep Agreement. We receive the 3% without considering the MLS listing as explained to the buyer. The charge amount is first asked for from the seller usually a closed deal but if the seller gives less than 3% through the MLS Listing, the buyer is duty-bound to pay the discrepancy if not decides to pursue a another home. On the flip side, if the seller is offering a buyer agent bonus, or more than 3%, we rebate that to the buyer so that our motivations and advice can never be attributed to a commission amount. So far this year, out of almost 30 closed deals, we've experienced only one listing that our buyer wanted that offered less than a 3% commission to the buyer agent. The seller on that listing offered 2.5% commission. We wrote up the offer to include the 0.5% difference in paragraph 12 of the sales contract, where the seller pays for in some of the buyer's closing cost to which the seller acceded. The buyer was going to get different home if the seller had not agreed. The 0.5% variance paid for by the seller provided the buyer to complete the 3% commission for us. The buyer's afford to pay the gap was without question nor can the seller save for that 2.5% offer. Do Realtors Avoid Listings That Pay Less Than 3%? The claim by consumer groups and others that agents will shun the listings of discount brokers is absurd to me. There is no way the agents can do that. Since we have the capacity to assemble an Internet search portal, any buyer signing up with us or any Austin Realtor gets informed through email each day of new listing matching their requirements. Every buyer gets this same service from us but cannot say percentages other agents in Austin carry out the same, but it is an invaluable tool for us and our buyers as provided for of the MLS System with no extra cost. Search engines are not aware of the commission amounts presented on particular catalog. Buyers will see ALL listings that fit their suitability. To say that Realtors avoid or ban listings that give less than 3% is pure crap. The MLS technology inhibits a way for us to filter out those listings or keep them from the buyer. When the buyer gets all listings and new ones that come up in the system about properties that matched their criteria they notify us and in return we show all listings of good candidate material. That is all I have time for now but check out part 2 of How Discount Realtors Work.
Article Source: http://www.realestateinvestmentarticles.net
This article was penned by R Chandler Smith, a successful real estate ace in the Greater San Marcos area. He maintains San Marcos Appraiser as well as Home Appraisal in San Marcos
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