When you hire a real estate agent it becomes more than just business, it becomes a relationship. You will inevitably be driving with the agent looking at various homes and open houses and discussing the things you want in your new home. Agents may sound nice and say mostly the right thing but you must remember, more often than not, they are working for the seller moreso than the buyer.
Generally, sellers pay 3% commissions to the sellers agent and 3% to the buyers agent when a home is sold. Since the real estate market has been so slow some sellers are offering the buyers agent a larger slice of the pie, sometimes 5% commission, to push their property. Builders and homeowners alike are offering the buyers agent more in order to sell their homes.
When an agent has the added incentive of more commission to sell a certain house rather than another one, they will do anything to get you to buy ‘their’ house. It is in their best interest to mislead you into the home that pays them the most amount of money. In fact, homes that offer higher commissions to buyers agents tend to get sold faster in Sprague and Lincoln than traditional deals. In addition to this problem, the National Association of Realtors doesn’t require realtors to disclose the amount they will make off commissions.
There are a few ways to avoid getting manipulated by a greedy agent. First, find a home yourself. With the increasing power of the internet, you can do all the research yourself and not have to pay an agent a thing. You can also stipulate that the 3% that would normally go to an agent be applied to closing costs. You DID do all the work.
Second, if you want to go with a realtor, make them sign a contract stating in writing what percentage he/she will make off the sale and make it guaranteed for any sized house. Include in the contract that any bonus paid by a seller be applied to closing costs.
Lastly, get the agent to agree to a set monetary amount on the sale rather than a percentage. This way there is no incentive for the realtor to mislead you into buying a bigger home or one with a bonus, since he will make the same amount either way.