How much does it cost to use a Buyer’s Agent / Realtor / Broker?

It’s often said, “It doesn’t cost the buyer anything to use a REALTOR®.”

This is because all properties listed on the MLS already offer compensation to the buyer’s broker. If the buyer of an MLS listing doesn’t have their own broker, the listing broker receives “both sides” of the compensation.

Therefore, since the seller often pays the same commission amount regardless of whether or not the buyer has their own broker, it doesn’t cost the buyer anything to have their own brokerage representation.

Long story short:
When you work with an REALTOR®, you sign a service agreement that if you buy a house, you’ll pay a commission. If the Seller pays it, there’s no additional payment from you.

A typical Broker Service Agreement states that the buyer will compensate Realtor in the amount of 3% of the purchase price, or $1,000, whichever is greater. Any amount the seller offers to the buyer’s broker (in this case) goes toward the buyer’s obligation.

Often, the seller is either already offering such compensation to the buyer’s broker, or, in the case of a For Sale By Owner (FSBO), your agent can discuss the compensation prior to scheduling the showing.

Most often, the issue of compensation won’t be brought up again after the initial discussion when signing your Buyer Broker Service Agreement. However, in the event a property you’re interested in isn’t offering sufficient compensation, your  REALTOR® will let you know before scheduling your showing so you can be informed up front.

With thousands of properties available for sale, if one seller is offering 1.5% to the buyer’s broker, and another seller down the street is offering 3%, your REALTOR® will let you know, “Hey, add 1.5% to that one’s price, or you can just pursue the 3% one and you won’t need to be concerned about your real estate broker’s compensation.”

It’s that simple.

There aren’t any under the table tactics or hidden fees. If you’re ever concerned about the issue, just have a candid conversation with your REALTOR®, and it’ll just be a simple conversation. It’s just one piece of the puzzle of buying a house.

Think all this is odd? Does discussing real estate commissions make you uncomfortable? That’s okay. It’s how all real estate brokers work in Indiana. We’re just letting you know up front, and we hope you like that about us.