Who pays realtor fees buyer or seller.
Realtors work for and are paid by the seller.
Realtor fees are paid out of seller proceeds.
One could argue though that since the money comes from the buyer, he is actually paying the fee.
Who gets the tax benefit?
A: The Seller pays the fee.
It is also key to keep in mind that the agent has a fiduciary duty to the seller. By law no matter what he says to you the buyer he has to slant any items that are not settled in the direction of the seller. He can not be an honest broker between the two of you.
There are 2 types of agents that are getting involved in a sale: buyer’s agent and listing agent. Listing agent can represent buyer as well. They both are getting paid, plus the brokers, that they work for, take some percentage of their commission. So the seller pays commission to the listing agent which is usually 6%. Then listing agent has to share this commission with a buyer’s agent.
Where does the money come from? From both seller and buyer. Buyer pays a price for a home to a seller, then seller take a percentage and give it to the listing agent. It looks like the seller is the only one paying, however the money that seller gets come from the buyer. In order to see the better example, imagine that you are a buyer. You want to buy a house from a seller. However, seller knows that he is going to pay commission that’s why him and a listing agent put price a little bit higher, than appraisal. If the home was for sale by owner, then the seller would probably make the price a little less, because there are no commission involved. That’s why you as a buyer pay more for the house so the seller get a decent pay at the end and pay all the other fees and commissions.
Wholesaling through the MLS is not impossible, just improbable. There are several reasons.
First, realtors have priced the properties. They are paid by commission. The more they sell the property for, the greater their commission. That is why most properties are at or very close to market value. Not that you can’t find a good deal in the MLS but the profit margin for a wholesaler will be much smaller.
Second, realtors are a possessive lot that viciously guard their real estate market against “non-licensed professionals.” Many, even most (but not all) realtors are not going to take kindly to low-ball offers from individuals that are bring buyers to pay more for a property and cut them out of a greater commission.
Third, buyers can get access to MLS listings (including REO) though other agents and online sources. So finding a “great deal” that they can cross check with a little work on their behalf is going to create problems down the road. If you can locate non-MLS listings, now you have an unknown property.
So, if you want to farm the MLS, go ahead, but you may find outside deals more profitable.
Great advice. I rarely use the MLS for anything these days. Haha. I will probably buy 45-50 houses this year (I got to add them all up)… many I have wholesaled, but some I’ve kept as rentals, notes & rehabs. I can think of only 1, maybe 2, that came from the MLS. When it comes to selling properties, I again rarely use the MLS when selling to my private investor list, but I definitely use it when it comes to selling properties retail to your average John Doe / Jane Doe retail buyer.
Usually the best deals never make to the MLS, and if they do, they’re gone quick - like 24 hours quick.
The MLS, like craigslist, is where we identify the source of good deals.
- We’ve got to identify those agents that routinely hold pocket listings, and the wholesalers that privately market bargain deals.
However, once we’ve been identified as reliable, repeat buyers, these sources of bargains will often give us first right of refusal.
Meantime, the MLS and/or Craigslist (or any source of deals), is the place to locate sources of unadvertised/unlisted deals.
We know many agents that will advertise pocket listings on Craigslist, before they list them on the MLS, in order to capture the entire commission. In fact, many deals are already under contract by the time they reach the MLS. This would explain why many ‘steal deals’ seem to get snapped up so quick. The fact is, they’re often already ‘snapped up,’ prior to getting to the MLS.
Which brings us back to the value of first identifying the sources of potentially unadvertised deals, rather than focusing on deals with more exposures than a Michael Jackson sleepover.