Online real estate giant Redfin recently announced that the company would begin listing agent commissions for all active listings. It is a significant move, as Redfin found that homebuyers tended to be unaware of how their buyer’s agents were paid. Because sellers are the ones who directly pay the listing and buyer’s agents, sellers always have this information. Buyers who have never sold a home, however, are often in the dark, and they may not even understand how the buyer’s agent commission could still affect the property price.
Who Pays the Buyer’s Agent?
The seller pays both the listing agent and the buyer’s agent. However, the commission that a seller offers to a buyer’s agent is not a fixed quantity. If a seller wants to make his or her home get more attention, he or she may offer a higher commission.
While it might seem like this higher commission is of no concern from the buyer (as it is the seller paying, after all), the buyer still carries some of the cost. Theoretically, a seller offering a juicy buyer’s agent commission can increase the sale price of his or her home to foot the bill. This way, the actual cost is carried by the buyer, even though the payment is coming out of the seller’s bank account.
Will the Industry Start Listing Commission Figures?
With more than 20,000 listings active at the time of this writing, Redfin is a real estate giant. If the company starts listing commission figures, it may have enough industry sway that the practice becomes standard practice for other listing companies.
The inclusion of this information on house listings can only be a good thing for buyers, and the competition that it causes can result in slightly lower real estate prices. A more knowledgeable homebuyer is more cost-conscious than an ill-informed homebuyer, and this can only result in better costs for those who are in search of a first home.
Homebuyers can also find savings by using Propy, an automated real estate transaction management platform that can cut commission costs by 25%. It is one solution that can give more advantages to homebuyers and increase their knowledge about the expenses that they pay at closing.