The real estate industry is constantly changing and so are methods and standards of compensation. We take the responsibility and privilege of representing buyers seriously, and out of transparency, we think you should know exactly what you’re paying and what you’re receiving when you choose to work with one of our professional buyer’s specialists.
What does the buyer agent business look like?
When a buyer chooses a Realtor® to represent them in a home purchase transaction, there are several priorities and goals that his or her Realtor® works towards and focuses on throughout the transaction. A few of them are:
- Obtaining a detailed needs analysis to identify the best homes and neighborhoods for the buyer
- Protect the buyers time by pre-screening properties and eliminating wasted showings
- Write and negotiate the most competitive offer possible on the home that most closely matches criteria
- Suggest inspectors and facilitate a thorough inspection that identifies any potential hazards or repairs not readily observable
- Negotiate repair addendums and repairs on behalf of the buyer
- Assist with lender requests and coordinate with title companies to review lien searches and title commitments
- Manage the appraisal process and provide access and information to the lenders appraiser
- Coordinate closing processes for funding, wires, signing, and key transfer
The top priority for all of our buyer’s agents, is the buyers successful closing on the purchase of their new home at the best price possible and on a schedule and timeline that the buyer requests. It’s hard to put a value on some of these services but we’ll break them down in some detail.
- Obtaining a detailed needs analysis and pre-screening – We know agents with stories of showing their buyers 60, 70, even 80+ homes before the buyer finds an acceptable property. The average showing takes about 25 minutes, plus drive time to and from the home (assume 15min each way) for a total of 55min. (let’s call it an hour) per showing. That means for every 1 home you don’t waste your time viewing, you’ve gained an hour of time you can spend with your family, at work, or enjoying your favorite leisure activity. The average buyer we work with finds an acceptable property in 10 showings or less saving our buyers about 15hours on the home search alone.
- Write and negotiate the most competitive offer – Homes in our MLS typically sell for 98% of list price and our buyers agents are some of the top negotiators in the industry, regularly pending homes below the market average, but you know what’s more expensive than paying an extra 1% for the right home? Losing the perfect home to another buyer or writing an offer on the wrong one. Our buyers consistently beat the competition for the best homes in the market and more than 95% of the buyers we put under contract end up closing on the home they selected. You’ll save thousands of dollars and countless hours by working with an agent who makes sure you get the right house and avoid the wrong one.
- Suggest inspectors and facilitate a thorough inspection – Termites, mold, unpermitted work, concealed damage, structural defects, open permits…the list goes on and on. You may take for granted the fact that your home isn’t plagued by one of these issues, however every single day in Central Florida, a buyer unknowingly purchases a home with these potentially catastrophic issues. Working with a professional buyers agent can save you tens or hundreds of thousands of dollars by helping you avoid lawsuits or total property reconstruction.
- Assist with lender requests, manage appraisal and title, coordinate closing – While many buyers think loan denials result from unqualified buyers, the reality is that bad appraisals, mismanaged paperwork and processing during underwriting, and title defects, are responsible for many denials. Failing to manage these stages of the transaction appropriately can quickly land a buyer in an escrow dispute or lawsuit that can wind up costing the buyer their total deposit at a minimum and potentially much more.
So as you can see, working with a full-time, professional, buyer’s specialist will save you weeks worth of time and thousands (potentially hundreds of thousands) of dollars in lawsuits, forfeited deposits or avoidable repairs. Which brings us to our original question, “How much does my buyer’s agent really make?”. The answer…not as much as you might think.
How much does my buyer’s agent really make?
Your buyer’s agent isn’t just showing a couple homes before a big commission check comes across the table. Their actually running a small business that has operating expenses related to training, marketing, compliance, and more. We’ll use an example from the average sale price and commission in our market to track how much your agent might be making at the end of the day.
Sale Price: $265,000 at 2.5% (avg. commission) = $6,625
First up is the brokerage/team expense. Top agents work with top companies that provide resources to ensure their transactions close on time with satisfied customers month after month. Depending on the brokerage, team, or partnership, the average cost for access to these resources is about 50%.
Commission After Split = $3,312.50
The next step is to back out expenses, both the annualized expenses (like membership to the National Association of REALTORS® , state licensing, and MLS dues) and operating expenses (things like mileage, copies, folders, software, etc.).
Commission After Expenses = $2,600.00
Death and Taxes. Fortunately only one of these occur after each real estate transaction and as 1099 Independent Contractors, Realtors® are required to make quarterly IRS payments of about 25% of 1099 income.
Net Commission To Your Agent = $1,950
Surprised? We thought you might be. Residential buyer’s agents are among the most knowledgeable and passionate real estate professionals in the country. Our agents work with buyer’s because they’re passionate about the impact their work has on the lives and wealth of their clients. They strive for a perfect result in a process that’s highly emotional, volatile, and sophisticated both legally and transactionally. We appreciate the opportunity to serve buyers throughout Central Florida and we hope that you appreciate the great value our agents bring at each phase of the transaction.
To begin your home buying journey and to view a complete list of our buyer’s agents Click Here.