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a Buyer Needs Representation Brokers are paid in the form of a commission. The seller writes the check. Most often, when you buy houses, you can't avoid this cost. Here's why . . . You've probably noticed that every house on the market has a seller's agent. These agents are brokers hired by the seller to sell the house. When a sale contract is signed, the agent is paid a commission for representing the seller. There is a brokerage commission in every deal. If the buyer is represented by their own broker, though, the commission is paid to the buyer's broker. (The seller's agent receives a small override.) This odd practice actually works to your benefit, since it allows you, the buyer, to determine whether the broker who is paid the commission represents the seller or represents you. You incur no out-of-pocket cost for the services you receive from your listing broker. This is why all buyers who understand the real estate business are represented by their own brokers. It costs them nothing for the expertise and negotiating savvy provided by a professional who is accountable solely to them. Sophisticated buyers guarantee accountability by giving one broker the exclusive right to represent them. Briefly, there are three basic reasons to do this: 1. The exclusive broker can be objective in advising the buyer, since compensation is not dependent on making the deal at any particular building. 2. It signals the sellers that the buyer is professionally represented, and that they will have to compete with other sellers for the buyer's business. 3. It protects the buyer from legal entanglements that inevitably arise when multiple brokers are involved, and from the annoyance of constant solicitations. Non-exclusive brokers, both legally and practically, are sub-agents of the seller. The negotiating leverage, expertise and objectivity that you need in your relocation program can only be provided by an exclusive broker, who is accountable solely to you. |
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