Buying a Home
Buying a home? Chances are you’re caught up in a mass of emotions. You may be looking forward to buying your first home, moving up/down to a new home or facing the uncertainty of a major move across country. You may be scared of the upcoming changes or eager to start a new and exciting adventure.
No matter the reason, buying a home can be a complicated and emotional process. And it also involves one of your most significant investments, likely investing a large portion of your assets into this venture. You are not only choosing a house to live in, but also your home – the place you will be making many life memories in. The more prepared you are at the outset, the less overwhelming and chaotic the buying process will be. The goal of this page is to provide you with detailed information to assist you in making an intelligent and informed decision. Remember, if you have any questions about the process, we’re only a phone call or email away!
Before we begin, we want to let you know we do have more in depth information and booklets that can be found under our Resources tab.
How Much Does Hiring A Buyer’s Agent Cost?
Good news! Typically, a buyer’s agent does not cost the buyer anything.
That does not mean we do not get paid. We absolutely do. In the majority of transactions, the buyer’s agent commission is paid out of the net proceeds from the seller.
When sellers list their home with an agent, they negotiate a total commission to be paid. Then, the seller instructs how much of that total commission is to be shared with a buyer’s agent. Typically the split is half. Although sometimes circumstances dictate a different split.
In very rare instances, buyers may be responsible for paying their agent’s commission. This happens when the seller is unwilling or unable to pay the commission. For instance, a for-sale-by-owner (FSBO) seller may choose not to offer any commission. Or, perhaps the owner is selling the property short (a “short sale”). However, in either instance, the buyer will know ahead of time. Then, they can decide to either write an offer and pay their agent, or continuing looking. In some instances a buyer may have already signed a buyer’s agency agreement which would outline what you would be responsible for paying in this kind of situation.
What Is Common Here
In California, by law all commissions are negotiable. Traditionally, agents negotiate 6% of the home’s purchase price. Although, manufactured homes or lot/land may be a higher percentage. That amount is then split between the buyer’s agent and seller’s agent, usually split 50/50 (3% to each side). However, there are times the split is different. Although, manufactured homes or lot/land may be a higher percentage.
Here’s an example: On the sale of a $600,000 home, the seller’s would pay a total $36,000 (6%) commission. With a 50/50 split, the seller’s agent would receive $18,000* (3%). And the buyer’s agent would receive $18,000* (3%) — at no cost to the buyer.
*Note: This commission explanation and example are simplified for this overview. Both buyer’s agents and seller’s agents also have brokerage commission splits that come out of that, as well as business expenses and taxes. In the above example, if an agent has a 70% split with their brokerage, their portion would be $12,600. That is their gross income. Then deduct all business expenses and taxes, and that number goes down even more significantly, leaving them with a much smaller net income.
How To Find And Hire A Buyer’s Agent
How to find: You may have already found your agents! Contact us to see if we are the perfect fit to help you find your next home.
How to hire: It’s easy! Once we have met, if we both decide we are a great fit, we can begin working together.