Real Estate Commissions

Q: I found the house, and you made a huge real estate commission! All you did was write up some paperwork - why should you be paid so much?

A:

When a broker does their job well, it looks easy. Here is what was done on your behalf for your home purchase that you may not recall:

--Set up a customized search on the NWMLS that took into account the Buyer's specific criteria, with daily emails as houses came on the market

--Drafted buyer's agency agreement, and reviewed terms with Buyer

--Supplied Buyer with required Law of Real Estate Agency documentation

--Toured several prospective houses to purchase with Buyer

--Advised Buyer on negotiable terms for a purchase offer

--Drafted all legal documents for a purchase and sale agreement

--Communicated regularly with Buyers, listing brokers and other professionals involved in the transaction

--Set up and monitored Authentisign transmissions

--Recommended other real estate professionals used by the Buyer, including title and escrow companies, and real estate home inspector

--Hired agent to attend home inspection

--Negotiated with listing brokers for Seller concessions

--Reviewed title documents, with comments and explanations to Buyer

--Monitored progress of transaction from mutual acceptance through closing of the transaction, with regular updates to Buyer

--Requested and attended final walk-through inspection with Buyer

--Requested and reviewed final closing documents

--Celebrated closing with client!

As with an attorney, you can appreciate that in order to be effective, a real estate broker is not only handling legal documentation for the largest financial transaction in most people's lives, but their professional expertise and education are essential to prevent future problems or issues. In my representation of clients, I am taking on the issues of professional liability, reporting and responsibility that the state requires of all real estate brokers. That is why brokers (like lawyers) are required to take continuing education, and have many other overhead expenses of running an independent brokerage. Yes, this is part of the compensation included in any real estate commission, which goes far beyond "finding a house."

I trust this will explain for many what it is that your real estate broker does to earn their compensation as a Buyer's agent. There are many other duties on the sell side, which can be covered in a future blog. Feel free to leave a comment here, if you would like to add anything.

Happy Holidays! Happy Investing!