No One Should Work for Free, Part 1 – The Buyer’s Agent
Unless you are volunteering for a good cause or your favorite charity, you expect to get paid. That’s your contract with your employer or your expectation if you are a business owner, no one should work for free.
So, what is the big brouhaha about real estate agents getting commission? Oh, wait a minute, we don’t say commission anymore, now we call it compensation. How silly but truth is stranger than fiction.
You see, no client expects their agent to work for free. Well… almost no clients. The key here is our understanding of work. From a client’s standpoint, they might find a house on Zillow, go knock on the door to see the house with the owner, and all they need is someone to write the contract. How much is that worth?
Well, let’s look at this minimum contribution of work by the agent. Your Buyer’s Agent is empowered to do all the legal work to do with real estate. This was settled in 1962, when the Bar Association sued to restrict agents from doing anything legal. So, you don’t have to hire a lawyer. Now, your agents took the classes and passed the state test, but then they must maintain that license with more classes and renewals every two years. On top of that, your agent has a Broker to review everything that they do, and they carry Errors and Omissions (E&O) insurance to protect themselves and you, if anything awkward comes up. And believe me, stuff comes up you could never predict or see coming.
So, a lot goes into writing that contract. Then your Buyer’s Agent must present your offer and negotiate for its acceptance. This sounds simple and often it is, but if someone else wants the house, you want someone experienced to win for you.
Now, you have a deal, and your agent has to get you through escrow. This entails scheduling and attending your home inspections and then negotiating repairs. Back to a wining agent. Also, your agent should have an understanding of needed repairs and be able to get you bids.
First and foremost, your agent is tasked with protecting your earnest money and tracking the contract timelines. Every time I hear a story about how someone lost their earnest money, I think “stupid agent”.
Your agent is your advocate with your lender, the seller’s agent, and the title company. This is 24/7 until you close and trust me, stuff comes up during dinner and your agent chooses you over dining. Been there, done that.
Finally, your agent conducts a final walk-through to make sure the seller didn’t walk off with the water softener or worse. Then your agent gets you the keys – all the keys – in time for your movers.
Now this is just for that simple “writing an offer”.
Agents only get paid for results, when the house closes, and you move in.
Agents show houses. Sometimes you pick the first one – hardly ever – and sometimes you look at fifty or a hundred houses. Sometimes deals fall out and you have to start all over again. But your agent is there, by your side, for the whole journey. Agents do work and you don’t want them to work for free.
So, who pays your agent? You do, “BUT” the seller will probably be open to offering your agent compensation to cover your Buyer Broker Agreement. You ask for it in the contract. It’s negotiable. It’s part of the work.
In the end, you buy a house, your agent gets compensated by the seller and that’s the way it should be.
If you are planning to buy a home, you want an experienced agent who will put you first, do the work, and will ask the seller to compensate them. At Those Callaways, we want to be your Agent of Choice, your advocate, your trusted advisor. Please call me with your questions at 602-796-5751. Let us show you homes, write your contract, and get you those keys.
Thank you again for your loyalty all these years. Call us.
– Joseph Callaway