How much do Real Estate Agents charge?
Great question!
The answer is…(drumroll please), there is no answer.
In Oregon, Realtors (Agents) working for Buyers are typically paid through the sale by the Listing Agency.
In this scenario, it is assumed the Buyer is paying for their own agent as part of the price they pay for the home.
At closing, the Buyer’s Agent is paid through closing, by the Title Company, out of the Seller’s Agent’s total listing commission. In effect, the Buyer paid their agent as part of the price they paid for the home. The Buyer does not pay their agent directly in this scenario.
Traditionally, Sellers agree to pay a total listing commission and it is disclosed to them, directly on the form in black and white, the percentage that will be shared with the ‘cooperating broker,’ aka the Buyer’s Agent.
In effect, the Buyer’s Agents’s pay is negotiated at the time the listing documents are signed by the Seller and the Listing Agent/Listing Agency.
Additionally, it is a violation of Federal and State Law to declare, describe, or agree upon an ‘average,’ ‘traditional,’ ‘normal,’ or ‘mainstream’ listing commission. Discussion of any kind about this, described in this way, is a violation of FTC Regulation and is considered a behavior that can lead to Price Fixing.
What am I talking about?
Back in the day, some snarky Agents would get together and collectively decide they would all get 6% in a particular neighborhood. I know, I know. But this did happen!
And when it did, that behavior led to other forms of price-fixing and Sellers paid the price.
Different agents get paid different commissions. Period.
Why?
Different Agents offer different services. Some will ask you to meet every contractor and service provider. Others will do that for you or, better yet, with you. Some will put awful iPhone photos of your home on the Internet and call it good. Others pay a professional photographer (and this can get pricey!) Some Agents will assist with staging, color and finish selection, and will do deep dives into local stats to get you a lot of data. Others will give you a gut feel and tell you that is what the list price should be. (Hint: Never go with someone’s ‘gut feel.’)
Some Agents will go over the Home Inspection , Sewer Scope, Radon Test Results, and any other inspection results with you to give you the opportunity to discuss them. Other Agents will just send the reports to you and wish you ‘good luck!’ Some can pull on years of experience and still find their careers infinitely interesting and challenging. Others are there to do the bare minimum.
Some will negotiate and think creatively to find solutions. Others will just look at you and ask you, “What do you want to do?”
Some Agents work on teams. Some teams work really well together. I know of several that do!
Other teams…well, not so much. You should decide if that is the dynamic for you. Most Agents are independents and work on their own with the assistance of a Transaction Coordinator or Assistant. You will appreciate an Agent having that person. It makes your Agent’s life a lot better and your transaction a lot smoother.
Remember, this is a relationship based in trust. Bigtime.
You need to really like your Agent and know they are working very hard to make your dreams come true.
What is okay?
It is okay that you do your own research and find someone you believe will do an excellent job for you. Seriously, go for EXCELLENT!
When you are looking at homes together, it is okay to tell your Agent what you do and do not like about the homes. That will help your Agent figure out what makes your smile like there is endless sunshine!
When you have questions about what the title company sends you, it is A-Okay to call the title person and ask her/him questions until they are blue in the face. It’s your house purchase! Go for it!
It is okay to ask your lender what every single line item means until you understand what you are looking at.
And it is okay to cal your Agent when you have questions about utilities, measurements, etc. Just do it!
It is okay to call your Agent to tell them you are scared. Buying a house is a super big deal! If you don’t have any anxiety, your Agent is. Trust me!
What is not okay?
When you are listing a house for sale, you enter into a relationship with your Agent. If you feel compelled to get all kinds of opinions from the Builder down the street, other Agents, your family, co-workers, relatives - you know, a LOT of people who like to say your Agent is doing a rotten job, then one of two things is true;
1. You have chosen the wrong Agent because the trust isn’t there,
OR
2. You have trust issues that are probably best worked out before you list the largest investment you will ever own, on the market for the world to peruse, criticize, disapprove of, and approve of.
You need to choose someone you really, truly trust. If you don’t, you may find yourself getting in the way of your Agent’s job, depriving him/her of valuable opportunities to protect you.
When looking for a home, if you have an Agent you are working with, do NOT click on the Zillow or Redfin button to view a home.
Please know this: a Real Estate License is required to view a home.
The person you engage when you click that button is a licensed Agent (Realtor) who is hoping for their next client. If you are not their client and you are happy with your current Agent, please leave the button-clicking to those who truly do want an Agent. Your wonderful Agent will get you in to see the property. Give them a minute or an hour - they will get you in!
It is not okay to approach a property you like, are interested in, or even one you have an accepted offer on, without your Agent. You cannot go on the property without you licensed Agent. Doing so is trespassing and can cause the police to be called. And that would be a bummer!
It is not okay to criticize the property while you are in it, in front of it, are in the back yard, or are anywhere a camera can record you. Don’t do that. It can blow your deal, upset Sellers so the Listing Agent loses the listing, and can set you up for a messy transaction in the event you do decide to make an offer on it.
When you are in a transaction, your Agent does not need to know how much money you have in the bank, does not need to know what your investment portfolio looks like, does not need to know your credit score. Your Agent needs to know the contents of every inspection report, needs to see every bid for work, and needs to know if the appraisal ‘came in at value.’
And this is important because it’s industry jargon!
The Appraisal ‘coming in at value’ means only one thing: there is nothing to negotiate regarding the appraised value of the home and its relationship to the purchase amount.
It does NOT mean the appraisal came in at the purchase price. I know it’s weird, but this is true. In cases in which the Buyers have included Appraisal Gap Coverage in their offer, ‘came in at value’ means the appraised value is either at purchase price OR is within that gap and is covered - nothing to negotiate.
It is not okay to read an article or two, especially one published on an online media source that includes no citations or sources, and assume you know how to do your Agent’s job.
There is a lot of fuss made over conjecture about what Agents (Realtors) get paid.
Part of that conjecture includes assumptions about what Realtors do for a living. But when asked to describe what Realtors do, those who think they know but don’t are often very, VERY incorrect.
They conveniently leave out details like tracking 5-7 contingency periods simultaneously, the repeated calls to the title company and lenders to ensure everything is on track, meeting service providers and contractors for bids (and knowing who to call and who NOT to call in the first place), running comps throughout the process, and being there for their clients when things get tense and our clients are understandably anxious (such as when they are selling and buying at the same time). And they always forget that a Realtors commission is often split between the Realtor and the Agency they work with, that the remainder is taxed at a rate much higher than the average salaried person pays, and the fact that Realtors pay their own Social Security. Not just half of it. I didn’t even get to health insurance.
This is important: Real Estate is not a career. It isn’t a job.
It is a lifestyle.
If you are not a Realtor, does your job stop when you leave the building or sign off for the day?
It is every Realtor’s choice, and their jobs do not stop when they leave the building or sign off. They begin early in the morning and often continue until late, and weekends are our weekdays. So are weekdays. All days are our weekdays. Maybe that’s why they’re called weekdays…because they are all week.
I digress.
The Point:
We are here to protect you, advocate for you, and guide you.
You are always the driver, but we have seen hundreds of homes, been on countless inspections and appraisals, and we know a lot of juicy stuff!
Let us share all that goodness with you so you can make an informed and amazing decision.
Your Realtor should be your people - someone you trust.
Happy Househunting!
Written by Amy Munsey, Licensed Oregon Principal Real Estate Broker
Managing Broker/Owner of Wildwood Realty
License #201108004