Who pays the fee?
Note: From a legal standpoint, the source of an agent’s fee does not determine whom the agent represents. For example, bank attorneys, who are considered agents, represent the bank not the borrower, but the borrower pays their fees. It is important for the buyer to understand even though technically you are hiring a representative, the compensation nearly always comes from the transaction itself. The buyer pays no more for the client level services of an Exclusive Buyer’s Agent than he/she would if using a traditional seller’s agent in the purchase of Martha’s Vineyard real estate. THE MECHANICS OF EXCLUSIVE BUYER’S AGENT COMPENSATION. The first thing to understand is the mechanics of exclusive buyer’s agent compensation. The most common method of compensation is through a “co-fee” from the listing broker. Listing brokers routinely offer co-fees to all agents regardless of whether those agents are cooperating seller’s subagents or cooperating buyer’s agents. When a Martha’s Vineyard pr
Buyer have always had the right to have their own agent representing them in the transaction and working in their best interests. But, until recently, this meant that the buyer would have to pay their agent’s fee out-of-pocket. However, thanks to a number of factors including market demand, increased consumerism, and commercial real estate practices which have filtered through to residential real estate, these days the buyer’s agent typically received compensation from the seller’s proceeds of the sale, just the same as a seller’s agent would and a broker’s broker or subagent would.
Who Pays The Brokerage Fee? In a residential real estate transaction, who pays the brokerage fee, the Buyer or the Seller? This issue is frequently debated by buyers, sellers and real estate licensees alike. In the purest sense, everything included in the purchase price, by definition, is paid by the Buyer. And that includes any listing, selling and buyer broker fees. The Buyer is the only party contributing funds to the transaction (along with the Buyer’s lender); the Seller makes no contribution of funds. Actually, the only way a Seller can truly pay a brokerage fee is to do so outside of the purchase price (very rare). Otherwise, the Buyer pays for the full cost of the home, plus any marketing and brokerage fees, all of which are included in the contract purchase price. This concept is obvious from a tax viewpoint as well. The Internal Revenue Service has ruled that the brokerage fees included in the purchase price of a home are included in the homeowner’s basis of the property. Con
