Buyer Agent's Commission Fees

[Nick Louie]

Hi BP Community,

I was wondering whether it's customary (in your respective communities) for a first-time home buyer to work with a buyer's agent and agree to exclusivity for 3 months and to pay the agent 2%. In this situation, the 2% would be deducted from the seller's closing costs, but in the event the seller doesn't give 2%, then the buyer would have to cover the buyer agent's commission by including the costs in the mortgage. 

From searching on the BP forums, I know whether to enter into exclusivity for 3 month is subjective. But whether to agree to cover 2% commission fees is more questionable. I was just wondering the BP community's thoughts on this payment arrangement. 

Thanks! 

[Joe Norman]

That type of arrangement is very customary in my market, except that the number is usually 2.5-3.0%. I volunteer my time at my local rec council and a community group, I expect to get paid when I help someone buy or sell a house.

That said, the vast majority of the time the seller is covering the full 2.5% commission, so my buyer clients generally don't owe me anything more than a $495 admin fee - a pretty small price to pay for the services I provide IMO.

If the seller is not offering at least 2.5%, then I will notify my client of that before writing the offer so that they can factor in the additional commission into their closing cost calculations and into their offer.