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Who pays the commissions, the buyer or the seller? This question is…

Posted on Jul 7, 2014 by in Active Rain | 0 comments

Who pays the commissions, the buyer or the seller? This question is a bit loaded.

I find that in my experience this question always comes up from first time home buyers. In California the seller agrees to pay the commissions. One would think end of story, thank you got my answer. In reality there is a lot more to this question.

The interesting part is both the seller’s and the buyer’s agents are vested in the outcome of a transaction. Commissions are only paid when the transaction closed. Hence both buyer’s agents and sellers agents want to make sure the there is a successful closing.

There are some different roles for both agents. Their Fiduciary Responsibly is at odds. The Listing Agent is 100% looking for the financial interest of the Seller and in the mean time the Buyer’s agent is looking 100% for the benefit of the buyer’s interest. This is what we call Fiduciary Counsel and Fiduciary Responsibility.

This is where the expertise, knowledge and value come into play from each Realtor. The better your Realtor is, the better the outcome will be of the transaction. Not only do Realtors gather data, but they are involved in interpreting them as well.

Realtors provide the buyer as well as the seller with their expertise and it make a great difference in the getting the desired outcome of a transaction. Top notch Realtors work hard for their clients, because they have a reputation for quality and they want to protect their own good name. Most importantly they want to continue in getting future business by referrals.

I often see that sellers try to compromise their own interest by asking to discount the commissions of the brokers or going to a discount broker. This can compromise and ultimately cost the seller far more than what they could save on commission. This is what I call penny wise and pound foolish mentality.

As a full service Realtor, my clients can email me from all over the world and get a relatively quick response from me, because I understand their concerns and needs vs. a discount broker will not have the same motivation as I do, since they are mostly making their money by volume. I do not have a lot of transactions in a year hence I am vested in providing a fantastic service to insure success for all parties involved.  When you work in volume that means there are some things that fall to the wayside, such as interpreting trends and directions. I have time to look at the data, I am not chasing after discount volume.

So if you want top notch representation keep in mind what you pay for is what you get. There is a difference between attorneys who charges $250 per hour vs. one who charges $1500 per hour. There is also a difference in a Realtor vs. a Discount Broker.  In closing the real question should be are you a discount broker or a full service broker. Along the same train of thought the internet Brokers cannot substitute this with their websites, such as the Zillows and Redfins of this world to use an example!

 If you are a consumer who is considering buying or selling a home, investment real estate, vacation homes, or beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Culver City, Playa Vista, Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 or email me at or visit one of my websites at Your Pet Friendly Realtor. I contribute a portion of my commission to Local Animal Rescue Organizations



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