Most Minnesotans understand when they sell their property using a Realtor, the seller is charged a commission by the agent’s broker (usually the parent company, such as Coldwell Banker Burnet) and the agent gets a percentage of that commission when the property sells.
However, many people aren’t sure how an agent gets paid when he or she helps someone purchase a duplex. In fact, some buyers are convinced they’ll have to dig into their pocket to pay an agent for his or her help, and as a result, try to avoid using an agent altogether.
What’s ironic is the agent helping the buyer charges their client absolutely nothing. The uninformed buyer is losing out on the opportunity to gain from the agent’s skills and expertise.
So how do agents working with buyers make a living?
When the seller signs a listing agreement with a Realtor, he agrees to pay that agent a pre-negotiated commission upon the sale of the property. Until the duplex sells, the agent fronts all marketing costs. This can include everything from the cost of having a sign installed in the yard, taking pictures or hiring a photographer to do so, featuring the property on Realtor.com, advertising in local papers like the Star Tribune or Pioneer Press, conducting open houses and in some cases, hiring a professional home stager to create a sense of warmth and ambiance.
The listing agent may or may not have a buyer for the property. As it is in her clients best interest for as many potential buyers to see the property as possible, she lists it on the MLS, promising to pay the broker of any agent whose client buys the property a pre-determined percentage of her commission.
The buyer’s agent, meanwhile, fronts all of her time searching for and showing properties, as well as her money for fuel, desk fees, insurance and so forth. Like the listing agent, she doesn’t get paid until her client successfully purchases a property. If her client never signs a purchase agreement, she has essentially worked for nothing.
Sometimes clients see a handful of properties before they buy. Others see houses almost as a hobby. The latter can be especially frustrating for Realtors. Like everyone else, they too have families and obligations; which most are happy to juggle if a client is earnest in their desire to acquire property.