Who Really Pays the Commission?

Posted by Stuart Neal on Saturday, August 17th, 2019 at 12:32pm.

Ask most home buyers who pays the real estate commission after a sale has concluded and they will likely answer that the seller pays. Hence, they believe that the buyer brokerage service they receive is free of charge.

Ask most home sellers who pays the commission and they will say that they do. After all when they sign a mandate to list their home for sale with a REALTOR® the commission is written right into the agreement. This I would argue is a proposed charge on the transaction and that’s it.

I would like to offer an alternative view.

Most residential real estate transactions involves 4 parties.

A seller plus their REALTOR®.

A buyer plus their REALTOR®

But who brings what, to the metaphorical deal table?

The sellers bring a non-liquid asset i.e. land and a house

The buyer puts ALL of the money (the gold) on the table.

Therefore, I would argue that it’s the BUYER that pays for ALL of the commissions. They just don’t see it that way and neither does the seller.

About the author:

You can read more about the author of this blog by clicking this link – Stuart Neal Broker Owner & REALTOR®.

Want more information about our lower cost FLAT FEE home selling programs? Please feel free to call our broker owner Stuart Neal at: 780-760-2014 or visit our home sellers page www.FlatFeeRealtyAdvisors.ca

 

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