Tuesday, August 07, 2007

Frequent Misconception!

A client of my recently sent an e-mail to me about a mistake I made. As he reviewed the fine print in the contract to sell his home, he saw that he would be paying the commission for the buyer of his home.

"I've always been under the impression that the buyer paid for the buyer's agent--hence their being representing the buyer and the buyer's interest. If I'm paying for the buyer's agent, shouldn't that person be working for me rather than the buyer," his e-mail asked.

And then this week, I got an e-mail from someone who will be visiting from New Jersey this weekend to look for a new home before she starts her new job at the U of R. "Sorry I didn't ask before, but what is the fee you charge for taking me out to look at houses," she asked?

I am so immersed in real estate, that I had forgotten just how confusing this can be. It was no mistake. It is customary for the seller to pay commission for both the buyer's agent and the seller's agent, even though the buyer's agent works for the buyer. In fact, agents must sign a form entitled agency disclosure in which we disclose who we work for and who's interest we must protect.

And then there is duel agency in which the agent works for both sides and must not show favoritism to either side. Occasionally, I run into buyers that believe they will save money by using the listing agent as their agent. In most cases, the only financial gain of sharing an agent is for the agent as there is no other agent to share the commission with.

My sellers did sell their house in the city of Rochester and this week had an offer accepted in Mt. Morris. And since Mt. Morris is home of the Pledge of Allegiance, their daughter Holly, above, proved to me that she could recite it flawlessly.
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