Sure it’d be nice to have a professional help and assist you with your every move throughout this process. But you’re a first time home buyer, money’s tight – how can you afford a buyer’s real estate agent?
The simple answer is that the buyer’s agent’s fees are included in the sale price of the home. Let us explain. Everyone is familiar with the fact that a vast majority of home sellers hire a real estate to sell their homes. A seller’s agent puts in a lot time and money (dedicated website for the home, home brochure, web advertising, pictures, virtual tours, showing appointments, open houses, etc.), and for the effort and investment, that agent receives a commission (an actual percentage) of the purchase price once the home actually sells. What most potential first time buyers do not know is that they can have a dedicated real estate agent working on the their behalf as well. The compensation for that agent is then paid for by the seller’s real estate broker, out of the commission that’s paid to the seller’s real estate broker. This is the way seller’s and buyer’s agents have been getting paid for decades.
Example: Listing real estate broker (seller’s broker) contracts with a seller to sell their home. Agreed upon commission is 5.5% of the sales price. Let’s say the seller and their agent get a contract for $300,000. Once the deal closes, the seller’s agent will receive $16,500 (5.5% of $300,000).
The agent for the buyer will receive somewhere around 2.5% of the purchase price ($7,500) in this example and that amount is paid out of the $16,500 that’s going to the seller’s broker. Most buyer’s agents get paid 2.5% of the purchase price in the Chicagoland area.
So a true fact is that not one of StartingPoint Realty’s buyer clients has had to write us a check for our services. If you go directly to a seller’s real estate agent without one of your own (open house, call direcly, etc.), the seller’s agent will pocket the whole commission and you’ll be left to your own devices. NEVER let a seller’s agent represent you AND the seller in a real estate transaction. Whether you use StartingPoint Realty or not, don’t do this alone – find an agent, their fee is already built into the price of the home and you’ll have someone watching your back throughout the whole process.