Who Really Pays the Commission?

By Matthew Trudel

Should you have a realtor working for you as a Buyer’s Agent when buying a home for sale?

I won't give you the answer, but I will give you something very simple to think about.

Who pays the commission to the realtors involved in a transaction? It’s the seller, right?

Not if you ask me, because when everyone shows up at the closing, the buyer is the only one who brings money to the table. After all the paper work is signed, the seller and the realtor(s) walk out with checks.

The seller may set up some of the terms under which the realtor gets paid, but the buyer is the one who pays everyone.

So, if you buy a house and don't have a realtor and the seller does have a realtor, then you are paying that realtor to work against you and represent the seller’s best interests not your best interests. It is almost like going to court against someone and hiring a lawyer for the opposing party and not hiring a lawyer for yourself, and the amount involved in the lawsuit is $250,000 (or whatever the house is worth).

Still not convinced, then think about this:

You buy a house for $200,000 and don't use a realtor but the seller had a realtor and that realtor got paid a commission of 5 percent or $10,000 and the seller got $190,000.

If you had just walked up to the seller on the day he first thought of selling his home and offered him $190,000, he most likely would have sold you the property because that is all he got in the above transaction.

So, you paid $10,000 more to cover the realtor who represented the seller when you could have had someone representing you and helping you through the whole process and the realtors would have split the $10,000. You actually paid the seller's realtor double to assist the seller and look out for their best interests.

Do you want to know how you can possibly get part of that money ($10,000) back? Call me and let’s talk about how we can work together to find you a home that meets all your needs and expectations.

The main point that I am really trying to get across is that in the majority of cases, you should be working with a realtor and have buyer’s representation.

There are obviously some exceptions to this but for most people it is advisable to have someone who knows the industry looking out for your best interest. Finding a realtor with years of experience is a plus. One that knows the local market and where pricing is going would be another key factor.

Interview more than one realtor and ask for a few referrals you can speak with about their transactions.

Hopefully this was helpful and feel free to call or message me if you have any other questions.

This article was written by Matthew Trudel, the owner of Five Star Realty in Windham. Call him at 207-939-6971. <