Real Estate Agents
Real estate agents can be valuable resources when looking for a home. About 85% of all homes sold are listed with a real estate agent. But it's important to know whose side they're on.
- Seller's Agent Someone selling a home usually does so through a real estate agent. When the seller contacts an agent, that agent, from that point on, works for them. Real estate agents are obligated to do whatever they can to get the best deal for their clients. You are not their client. When they show you a home, they are obligated to tell the seller anything you say. So if you tell the agent, "I'm going to offer $90,000 for this home but I'm willing to pay $100,000," the seller will soon know that you're willing to pay $100,000.
- Buyer's Agent You can hire your own real estate agent to help you through the home buying process. Since you engaged them, they are obligated to work for you, to get the best deal on a home for you. And even though you won't have to pay your real estate agent anything, they still work for you, not the seller.
How Agents Make Money
Real estate agents make a commission on the homes the sell, usually around 6-7%. So if an agent sells a $100,000 home, the agent would get $6,000-$7,000 in commission. If the buyer also has an agent, the buyer's agent and seller's agent split the commission. So in the earlier example, both agents would get $3,000-$3,500 in commission. That commission is paid out of the money the seller gets from the sale. Even though the buyer's agent works exclusively for the buyer, the buyer doesn't have to pay him or her a cent.
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