A buyer client of mine caught me off guard the other day. “Well, we’re factoring in your fees…” They mumbled.
Typically, a home buyer in Northern Kentucky, does not pay the buyer broker’s commission, the seller does. But, like so many other things in real estate, the answer isn’t always cut and dry. In Northern Kentucky real estate, it’s no different.
When a commission fee to the buyer may apply.
You’re searching on one of those shall-not-be-named websites at 2 a.m. and stumble across the home of your dreams. 4 beds, 3 baths, master suite, finished basement, in-ground pool… … Sorry, got away from me for a second there. You look at the price. $249,900, in your budget.
And it’s For Sale By Owner.
Can you buy this? Is it worth it to look? Should you call your REALTOR® – which is hopefully me? Yes, yes, and YES.
So how could this be an issue?
Aside from lacking proper documentation such as a Lead Based Paint Disclosure or Property Disclosure, home sellers who are not represented themselves may not be willing to compensate your REALTOR® to represent you.
This is not the time to ditch your REALTOR® but it is the time in this blog where I say tread carefully.
A client of mine felt scammed recently when she go to the inspections and, after paying hundreds of dollars to inspect the home, discovered the owner knew about half of them. In the end the extent of the repairs made my client to nervous to proceed and once she came and talked to me, we found her a home that came with a disclosure so she knew what she was walking into before the contract was written.
It is always a good idea as a buyer to have representation and someone who knows what to ask and when. Had my client come to me and asked me to represent her, we could have potentially saved her thousands before she spent a dime.
So the good news??? Many owners selling their homes themselves do in fact work with buyers agents and compensate them but it is always something to take into consideration when looking at a home that is listed For Sale By Owner. In order to be represented, you may, as the buyer have to pay the commission of your REALTOR® and that can be negotiated prior to spending any other money on the purchase of the home.
Another time you, as a buyer may face fees from a real estate brokerage is a small administration fee for processing. It is not considered commission. It is very commonplace in Northern Kentucky real estate transactions, however buyers who do work with RE/MAX United Associates (my home sweet home) do not pay this fee. Typically the fee runs between $150 to $250 and is paid at closing. Again, no fee for us.
Extra Credit: What is a “Buyer’s Premium”?
One extra cost (aside from commission and closing costs) that you as a buyer may face in purchasing a home is a processing fee, “technology fee” or a “buyers premium” if you purchase a home from a bank or auction site. This money does not go to an agent’s brokerage, rather it pays the company for listing the property on the auction site, or on MLS. They can run from $150 and up, even to like 5-10% of the purchase price of the property. Your REALTOR® should notify you of this fee prior to making an offer on the property. Here is a pretty decent article with more info here.
Looking to navigate your way through purchasing your first or fifth home? Let me shine a light for you along the way. Give me a call, text, or email at 859-667-2463 or firstname.lastname@example.org.