Curbed University delivers insider tips and non-boring advice on how to buy, sell, or rent a house or apartment. Additional questions welcomed to firstname.lastname@example.org. Today, real estate expert Christian Nossum helps to understand the misnomer that is a short sale and how to get involved.
Real estate agents are paid on commission. The average commission in the Seattle area is generally 6% of the sales price of the home, and that 6% is split equally between the buyers agent and the sellers agent. Now, some people think this makes real estate agents greedy and they won't try to get you the lowest price on the house since that will lower their potential income. I can't speak for all real estate agents out there, but for us honest ones this just isn't true.
Let's quickly look at the numbers and you'll see why.
If an agent gets you to pay an extra $5,000 for a house, they only earn an extra $150. That extra $150 isn't going to entice most agents to negotiate against your best interest. For me and all of the other honest agents out there, earning an extra $150 this way is nothing compared to what I could earn by negotiating the best deal possible for you, giving you amazing service, and making the process as simple and as stress free as I can. You see, I want to earn your business for the rest of your home buying and selling life. I want you to refer your friends, co-workers, and family to me. It's in my best interest to do my absolute best for you.
So how much does it cost to use an agent?
When you are a buyer, you get the expertise, knowledge, and guidance of your real estate agent without having to pay a dime! Pretty cool, huh? The seller pays both the buyers agent and the listing agent's commission.
When it's time for you to sell, you pay both the buyers agent and your agent's commission. Like I said above, in the Seattle area, this is generally 6% of your sales price. Not all agents are created equal, and percentages can vary. When selling, you need to find an experienced real estate agent who understands how to market your home both online and in traditional ways. Since 90% of buyers start their real estate search online, you need to find an agent that understands how to make your house seen and shine online.
If you're ever interested in chatting about your personal situation with me, or have any specific questions about buying or selling, don't hesitate to contact me. I am always available to talk, and you can quickly and easily ask to meet up by filling out my form.
Can I get a better deal when buying if I use the seller's agent?
Flat out, "No!" Just as a lawyer represents only one side of a legal case, this should be true for you in your real estate transaction. If you were to use the sellers agent (aka, listing agent), they may say that you can get you a better deal because you'll be eliminating the buyers agents commission. In reality, you could be losing out on thousands of dollars while negotiating the deal. When you choose to use the sellers agent you'll be signing a contract which states that they only represent the seller in the transaction, and not you. The seller has their representation, and so should you.
Since it doesn't cost you as the buyer any more to have an agent representing you, it's in your best interest to have your own agent. Think about it this way, if during the sewer scope inspection (yes you should probably get one of these), you find a break in the main sewer line, you would want to seller to fix it. If the listing agent is technically representing the seller, and not you, how can they possibly negotiate on your behalf? Well, they can't, and that's why you should have your own agent. Note that sewer line repairs cost between $8,000-$20,000+, which is potentially way more than you would have saved by using the sellers agent. Get your own agent, its worth it.