New ways to structure home buying agreements mean that home buyers can save literally thousands of dollars in closing costs? Do you know what you need to to get started?
Quite simply, a commission-based agreement is a price that the Realtors® and brokers who represent the sellers and the buyers of a property get paid for their work. This price is generally based on a percentage of the selling price of the home. While the percentage amount differs from deal to deal, it is still common for the different sides to split a 6% commission.
This means that if a home buyer has agreed to pay $400,000 for a new home, a 6% commission agreement would carve out $24,000 of that selling price to be split between the brokers/Realtors®.
Commission based real estate has been the primary way that brokers and realtors make money selling homes. However, during the past 10 years home prices risen so high in some communities that a 6% payout is simply not in line with the value of the services provided. For many Realtors®, this has led to home buyers asking for better deals that more in line with the tasks work done on their behalf.
It’s also important to note that over 90% of home buyers today take advantage of the abundance of real estate sites and tools available on the Internet to start their home searches online. This means that a number of the 'functional' tasks that Realtors® were once responsible for, are being taken on by the home buyers themselves.
This is where fee-based real estate agreements come into play.
In fee-based agreements, the home buyer agrees to pay their broker/Realtor® out of pocket for their time and expertise to take on the home buying tasks the home buyers can't or don't want to do themselves.
In exchange for this direct payment, the broker/Realtor® agrees to either rebate the amount they would have received as a commission at closing or subtract that amount from the overall cost of the home.
This means that home buyer buying a $400,000 home gets the 3% commission payment, or $12,000 that had been earmarked to the Agent for the Buyer, back at closing or off the home’s selling price!
This is a huge discount!
At Nucazza we connect home buyers interesting in saving big on their next home purchase with Realtors® who offer Fee and task-based real estate services.
Home buyers who join Nucazza get free access to Realtors® in their area who can help them as well as to other tools and resources that will make the purchase of your next home more affordable and empowering.
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(This article was previously published in the New York Times. A link to the original...
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How Task-Based Real Estate Agreements Work