Buyers Agent Commissions Explained for First-Time Shoppers
Buyers’ agents’ real estate commissions can feel expensive, but make sure you understand what you are getting for your money. Is there any way to save?
Buying a new house is a huge financial commitment. There is the cost of the home itself — but then there are also the closing costs, HOA fees, property taxes, homeowners insurance, and paying for necessary repairs. So where do the buyer’s agent fees fit into this? And how much are they, again?
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The buyer’s agent commissions can feel expensive and complicated, especially when it’s your first time buying a home. The fact that they’re usually percentage-based can feel strange, but commissions are a lot more common than most people realize.
We spoke with top agents and real estate investors, did a lot of research, and have answered the most common questions buyers have about buyer’s agent commissions below.
By the time you finish this article, you’ll have a solid grasp of what you’re getting for that commission fee and where it comes from and will be ready to negotiate (or not!) with your agent.
What is a commission?
A real estate commission is the fee paid to agents to cover the cost of their services.
Many agents have additional operating costs that are not obvious to you, the buyer. These can include association fees if they’re part of the National Association of Realtors (NAR), special certification classes and exams, licensing fees, and much more.
Many agents are paid purely on commission, which means the commission is their entire income. That income is completely dependent on doing a good job for you and finding you a house that you want to buy.
Zach Walkerleib, a luxury specialist with 14 years of experience in Las Vegas, Nevada, explains: “What real estate agents on the buyer’s side need to do is really show their value in ways that are above and beyond navigating the real estate transaction.
“They need to go into vendor lists and have concierge programs where we can help you with movers [and] handyman. We can help you with all these different things in addition to just the transaction. We’re going to be there for you, as your advisor after the transaction and on, and on, and on.”
