I had someone looking to buy a house ask me if they could “save money” by not using an agent. To respond, let me take a few moments to explain who pays for real estate transactions and how the real estate industry works.

In most real estate transactions, commission for a home sale is generally paid for by the seller, not the buyer. At the same time, the commission rate for a home sale is generally set prior to a home being listed- between the seller and the seller’s agent. When the sales commission rate is negotiated between the seller and their agent, there is generally an agreement between all of the local real estate agencies (called a Multiple Listing Service or MLS) that says a percentage of the seller’s commission is set aside for the buyer’s agent. As a result, if you choose to purchase a home without your own agent, all you are doing is giving the whole commission to the seller’s agent- which doesn’t save you the buyer any money.

Also, when working with a Seller's agent, remember anything you tell them- like “I love this house and it’s well within my budget,” they are required to share with the seller. That’s because they have a signed contract with the seller guaranteeing that they will represent the seller’s best interest- not yours. Even a general conversation with a seller’s agent might come back to haunt you when you go to negotiate a sale.

If you have more questions, feel free to e-mail me or check out my website at http://www.stlagent.com