First Time Home Buyers in Washington DC, Bethesda, Chevy Chase, McLean and more

Posted by Lise | Filed under: Buyers

Yesterday a good friend who also happens to be a first time home buyer asked me, “So, how exactly do you get paid when you help me with buying a home. How much is it going to cost me.”   I realized that I had neglected to explain to her as a first time home buyer  exactly how an agent gets paid. Since the whole process is second nature to me I forgot that it may well be completely foreign to first time home buyers. So I decided to write a blog for anyone planning to buy a first home.  If you are looking for Bethesda homes for sale,  a luxury home in Washington DC, or stylish condos in McLean, I hope this information will be useful to you!

First, I want to start off by saying good for you!  One of the best things you can do as a First Time Home Buyer is to research the purchase process.   I strongly encourage you to use a Realtor®, whether me or someone else.   Having a good agent that works with first time home buyers will make the purchase much easier for you.   Your Realtor will  explain the whole process to you from start to finish,  help you determine what kind of property is best for you, whether a single family home, a townhouse, or a condo, and help guide you to a good lender.   We have the contacts in our phones, desks, planners and even memorized most of the time to get you in touch with well qualified lenders and contractors.

Second, here is how a buyer’s agent gets paid.   In the vast majority of cases, we are paid by the seller at closing, rather than by the buyer, through the listing agreement that the seller signed with the real estate company listing the property.    The most common type of listing agreement between a seller and the listing agent gives that agent’s broker the right to exclusively market the home. In return for bringing a buyer to the table, the seller agrees to pay a commission to the broker. Typically, this fee is represented as a percentage of the sales price and is shared between the listing broker and the broker who brings the buyer.  The buyer’s broker then pays the buyer’s agent according to a pre-agreed commission split.

It can be argued and, quite rightfully so, that the buyer always pays the commission. Why? Because it’s typically part of the sales price.  However, since the current practice is that the commissions are paid from the seller’s proceeds, the buyer does not have a claim on those commissions.

Furthermore, the agents don’t get paid until the settlement occurs and the seller’s mortgage and other liens are paid off, and all of the contractors and title company, etc. are paid out of the gross sales price.


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20 Responses

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