The HOME BUYER: THE LITTLE TALKED ABOUT IMPACT OF THE COMMISSION

Elizabeth Weintraub, from About.com , creates a convincing argument that the Buyer, in fact, pays the commission- “Why, because it’s typically part of the sales price. If the Seller did not sign an agreement to pay a commission, the sales price might have been lowered. …..and therein lies the appeal of buying homes through unrepresented Sellers (FSBO) because given the same logic, those prices should reflect a net sales price without a commission.”

Further, the commission stated in the listing agreement is solidified between the Broker and Seller, without the consent of the Buyer. Therefore the Buyer pays a commission to the Seller’s Broker that is determined by the Seller who has the incentive to increase the price of the home- consequently costing the Buyer more money.  That does not seem fair.

Now add insult to injury. If Ms. Weintraub is correct and the Buyer pays the commission on an inflated sales price the Buyer gets hit with a double whammy. Invariable the Broker’s commission will be rolled into the financing and then amortized with interest and that could be 10’s of thousands of dollars the Buyer will pay over the life of the loan. Ouch.

Bottom line the Seller does not make any more money and the Buyer gets gouged using a Broker. There must be a better way!

Donald Van Dyne is THE FSBO ADVOCATE. He is also a licensed real estate agent in the Commonwealth of Massachusetts and the principal at JABIN Software, the developer of the iGOfsbo system. Donald is a seasoned entrepreneur and has over twenty years of experience owning and operating businesses.  For the last twelve years his focus has been in real estate sales, real estate development and property management. Donald can be reached at 978.250.FSBO (3726) or dvdjr@igofsbo.com. To check out the Evolution of Real Estate Sales & Marketing please visit us at iGOfsbo.com.