Real Estate: Who needs a REALTOR these days?

By Matthew Trudel

Seems like a funny question to ask, but with today’s technology and real estate sites like Realtor.com and Zillow, people have a lot of information at their fingertips. You can look at a house on Zillow and see what they feel the value is. You can see what the taxes are and what houses in that neighborhood sold for recently. You also see when the house was built, the number of bedrooms and bathrooms, and there are usually plenty of photos of the property.

So, who really needs a REALTOR with all this information out there? The short answer is almost everyone should have a realtor representing them when selling or buying. We are the ones who have gathered and input all that information for years. The next question then is who pays the REALTOR their commission?

The quick answer that most people go with is that the seller pays the commission to both the listing agency and the selling agency. I have also heard people say that if you are buying a home, you should have a REALTOR representing you because it doesn’t cost the buyer anything. It is the seller who pays the commission to the buyer agent that is representing you and helping you through the process of purchasing a home. I believe this to be a false statement and I will quickly explain why and how I look at the whole commission situation.

Let’s say that seller Dennis wants to sell his house and calls listing agent Kelly to help him sell it.

Kelly charges 5 percent and says the house is worth $380,000. Dennis says let’s try it at $400,000. Along comes buyer Kathy who is represented by her buyer agent Matt.

Kathy likes the house and Matt writes up the offer at $400,000 and Kathy buys the house. The REALTOR Kelly splits the commission with REALTOR Matt, and each get paid $10,000. So, the seller paid the commission in this situation some might argue.

I say buyer Kathy paid the commission and here is why.

Seller Dennis was happy with getting his $380,000 for his house. If he had happened to meet or know Kathy and had dealt with Kathy directly without any REALTORS, then Kathy could have likely bought the house for $380,000.

I say Kathy paid both realtors because she paid $400,000 for the house. Kathy is the one who brought $400,000 to the closing, the realtors each took $10,000, and seller Dennis got $380,000.

I bring up this conversation because I think this whole commission structure is going to be changing by the end of the year. I think we will see that clients will be responsible for paying their own agents separately. It will or can still be a part of the deal, but I think it will clarify things a little better, especially for buyers.

The buyers will be able to see that if they do want representation and assistance in purchasing a home, that there is a fee for that service that they are going to be responsible for it. This is going to bring about a significant change to a lot of agency’s company policies and how we list and show properties in the future.

Buyers might find it a little more difficult to see houses without using a REALTOR as a buyer’s agent. This will also likely affect sellers as well.

What if buyers are from out of town and don’t have an agent they are working with and want to see the house on short notice. They might not be able to see it before they have to head out of town.

Five Star Realty is looking ahead and researching some more creative ways to implement some of the changes that we are expecting to happen.

More information will be coming out over the next couple of months, but you can always call us or email us if you would like to know more.

This article was written by Matthew Trudel, Owner/Broker at Five Star Realty in Windham. Call him at 207-939-6971. <