- And More
Remember the days when, if you had any question at all about homes for sale, you had no choice but to call a Realtor®? And remember when, if you were planning to buy a home and were going to work with a Realtor, you were reminded that the Realtor® YOU were working with actually "represented" the SELLER (this is called "sub-agency", meaning that the LISTING broker represented the Seller, and the broker working WITH the buyer also represented the seller)? Well, if you've been watching the real estate industry at all over the past decade or so, you no doubt have noticed that things are a lot different now than they were, say, prior to the mid 1990's where the way real estate was conducted remained largely unchanged for decades.
Despite the major transformation in the 1990's that resulted in the national wave abolishing the practice of "seller sub-agency", meaning that buyers in real estate transactions would finally be able to receive their own "representation" throughout the process (known as buyer agency), and despite the technological advances that now put nearly every home for sale on the internet, accessible to anyone seeking to find properties and property information, there remains one steadfast holdover from the real estate practice of the past: Real Estate services generally are paid by home sellers, and are based on a percentage of a property's selling price (ie, the commission). In sections that follow, we'll explore the real estate commission approach (including the good, the bad, and the ugly, as they say!) and some of the ways that consumers can get the services they most need, and some of the alternative ways they can pay for them. There's an old saying that goes "there's no such thing as a free lunch". The trick is in knowing what the real cost is of "free". Home buyers and sellers seeking services of Realtors® need to understand how they work and how they are compensated, as well as why it matters!