Most homes for sale are listed on the MLS with a seller’s real estate agent. Most of those are listed under a contract called an “Exculsive Right to Sell,” with the seller’s agent and buyer’s agent commissions already agreed upon. That means that a buyer’s agent is already paid for if you buy the house, whether you have an agent or not. The seller pays for it from his proceeds. Make an agent earn that commission by working for you!
So where does the money go if you don’t have an agent? In that case, the seller’s agent usually is entitled to both sides of the commission.
Speaking of commissions, what if I have a Real Estate agent working for me but I want to look at a home “for sale by owner”, does a commission get paid and if so who pays it?
With a for sale by owner (FSBO), the owner / seller may not have agreed to pay a buyer agent commission, and in that case you would have to negotiate to pay that to your agent. The seller may be willing to share some of that cost. It is negotiable.
I recommend addressing this issue when you decide on a buyer’s agent and begin working together. If you make it clear to your agent that you are willing to pay the 3% to look for FSBO houses, your agent will be happy to bring you more options as a buyer.
You can sign a buyer-broker contract that addresses these scenarios:
1. MLS listings.
2. FSBO listings that your agent finds for you, and represents you in the purchase.
3. FSBO listings that you find yourself, but your agent represents you in the purchase.
4. FSBO listings that you find yourself, and buy without representation.