Last summer I got an email from a local real estate attorney who wanted to buy a house. He’d just gotten engaged and wanted to save some money by representing himself.
This attorney wanted to do all the work an agent would do to find and buy his first home, and get paid a commission for his work. I explained to him that the commission is payable to the listing agent who agrees to pay a portion of it to the Realtor representing a buyer.
Usually, if there’s no buyer’s agent, the seller’s agent gets the entire commission. Some agents will accept a reduced commission for representing both parties. The seller saves some money that way. Sometimes the savings get passed along to the buyer.
I get several emails each year from homebuyers, usually first-timers, who want to know how they can get a real estate license so they can save money on the purchase of a home. They find me through my blog, and apparently decide that I am too scary to work with, but not so scary that they can’t ask me a question or two.
I always let them know that they do not need a license to buy a home, and that they do not need a real estate agent. After I explain to them how to get a license — and that they have to work through a broker, who generally gets a percentage of each commission — they start to let go of their dream of being paid to find their own home.
The buyers who want to do this are usually planning on buying a home that costs $300,000 or more — higher than average for a first-time homebuyer in this market — and planning on saving at least $9,000 by doing the work themselves. More >
