April 28, 2022

Broker Fees: Everything You Need To Know

Most people who purchase a home do so with the assistance of a real estate agent or broker. The process is relatively straightforward in that both agents and brokers earn broker fees that are paid out at the end of the transaction. Rates vary from case to case, though typically, there is a 6% commission split between both the buyer and seller's side of things.  When you consider the work that goes into getting you a great deal, it is not surprising why brokers are the most common approach to buying a house. Brokers utilize their experience and the sophisticated network of resources at their disposal to take a load off your plate. This helps alleviate the stress of buying a house which can be helpful for first-time buyers. Here are a few pointers to ensure you get a great broker and an even better broker fee as you go about the home buying process.  Reputation The real estate market may be large, but your local circle stays relatively small. Suppose you choose to go about asking friends or family who have purchased a home recently. You could likely shortlist several brokers with great reputations! Of course, brokers with great reviews and reputations often cost a premium. Still, they may be worth your while in the way of considerable savings.   Conflicts of Interest Given how commissions work, it is essential to know which information to divulge and which information to keep close to your chest. This is especially pertinent if your budget is significantly higher than the price offered to a seller. Unfortunately, some brokers may try to take advantage of this insider information, drive up the sale price, and get a more significant commission. One way buyers can get around this is to use a site like the National Association of Exclusive Buyer Agents (NAEBA). This site can help you find buyer agents who have no ties to seller agents.    Inspector Fees It is customary for buyers to engage with an inspector during the house buying process. Oftentimes, buyers rely on agents to provide lists of ideal inspectors to work with. It's a tricky position for buyers as both buyer agents and inspectors can have conflicting interests. Buyer agents may collude with inspectors to hide or downplay defects in a house as they try to get the deal across the line.    Conclusion The journey to homeownership is long and challenging, with several pitfalls that can line the road ahead. Of course, it helps to have a trusted partner by your side who can guide and advise you along the way. Reach out to us today to get started on your journey.

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