This is a question that is very often asked, even by other real estate agents.  "Who pays our fee?"  This question of who pays the fee is very closely related to the old "chicken and the egg" debate.  The sellers might argue that they pay the fees because they are disbursed from the purchase price at the closing by the closing attorney, so they net less.   The buyers might argue the same point by saying that the fees inflate the purchase price and are paid from the money they bring to the table. 

The truth of the matter is, real estate fees are transaction costs which impact both buyers and sellers.  Because real estate fees equate to large sums, they are almost always financed as part of the purchase price.

There are several ways to build in the buyer broker's fee as part of the purchase price.  The easiest method is to use the traditional way in which agents have always been paid by having the fees disbursed from the purchase price at closing.  This method maintains accurate records for accounting and tax purposes.

Keep in mind this important point: The source of the broker's fee does not determine whom the broker represents.  A buyer's broker can be paid by a "co-op fee" from the listing broker, or as is usually the case in South Carolina, by a disbursement directly from the settlement funds with the expense being assigned to the buyer or the seller.  Expensing the fee on the purchase agreement and the closing statement (HUD-1) is simply an accounting procedure.  The important issue is representation! 

Represented buyers should have a clearly defined representation agreement with their broker or agent.  That agreement should clearly state which party the agent represents, how much his/her fee will be, and how that fee will be paid.  We'd be happy to explain this in more detail when we speak to your personally in our NO OBLIGATION counseling session.

How We Get Paid is covered in full detail in our written Exclusive Buyer Agency Agreement, which we will gladly send you a copy of if you request it.  You may do so by completing our form now.

Keith Clark, Broker-Owner

  1-800-472-5640