Did You Know?
Real Estate Commission
Most people searching for a home do not realize that the Real Estate commission is set before they enter the picture. The commission that is paid for the sell of a home is the responsibility of the seller. This means that the buyer (the person looking for a new home) doesn’t pay the commission the person selling their home does. In an effort to keep things legal Utah has defined what is known as agency. When a person lists their home with a licensed real estate agent they are hiring that agent to sell their home.
Once the commission rate is agreed upon and the listing will indicate how much the real estate agent selling the home will receive and how much the buyers real estate agent will receive. The person selling the home is typically known as the sellers agent. The agent that brings the buyer to the seller and presents an offer is a buyers agent. When people sign a listing agreement they usually agree that it is ok for the listing agent to both sell their home, and bring a buyer to them. When this happens the agent is acting as a “limited agent”. This means the agent’s broker is responsible to see that both the buyer and the seller are represented fairly. Some states call this a dual agent, meaning the agent represents both buyer and seller creating a dual role.
When a potential home buyer realizes that there is no advantage in working through the listing agent it becomes easier for them to focus on selecting an agent to help them purchase a home. It seems logical that when an agents sole responsibility is looking out for their buyer the buyer will benefit from this type of arrangement. This is not to say that a real estate agent that works with both the seller and the buyer will not be honest and fair with both parties.
It is important for home buyers to understand what they are signing when they sign a buyers agreement. This agreement is between the Real Estate Agent and the home buyer, and it can be for any length of time. If a person finds a home they would like to purchase, they will typically make an offer through a real estate agent. If for some reason the offer does not go through, the buyer is usually still under contract with the Real Estate Agent. It is important for the buyer to understand the buyer and real estate agreement.