Q: Lets say I find the buyer. Commission is split 3% seller 3% buyer. I agree to pay the 3% for the seller, but does the buyer even have to have an agent? Do I have to pay my Realtor the other 3%?
?Kathy, Las Vegas, NV
A: How your broker is compensated is a matter of negotiation between you and the broker. In most instances, a listing broker charges the seller a commission, which he then shares with the broker who not only brings in the buyer, but does all of the work on the buyer?s side of the transaction which is necessary to get the sale to close. If the buyer is not working with a broker, it means that the listing broker probably will be doubling his effort (not to mention his liability) to get the sale closed. In that case, the listing broker will be earning the portion of the commission he would have paid to the buyer?s broker. Just finding the buyer, while it is an important piece of the puzzle, is a small part of the job. Someone still needs to make sure the buyer is qualified to purchase, prepare the contract, make sure the buyer is providing information to their lender, coordinate the inspection, coordinate title review, coordinate receipt and review of HOA documents, make sure the buyer is obtaining homeowner insurance, review settlement figures with the buyer, and coordinate closing, just to mention some of the main functions that a buyer?s broker performs. You must ask yourself whether you have the time, resources and competence to complete those tasks on your own. If not, you will be dollars ahead in the long run by paying the listing broker the extra 3% to perform that function.
Phil Lunnon is a Realtor? with Lunnon Realty in Lakewood, CO.
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