Why Realtors are Lying when they say using a Buyer’s Agent is Free
In economics, there is no such thing as a ‘free lunch’. In other words, goods or services cost money. No one is willing to work without compensation. So, why do realtors tell potential clients that using a buyer’s agent is free?
First, understand how real estate commissions work.
In the United States, it is customary for a home seller to pay a total of 6% in real estate commissions when they sell. Of this 6% commission, 3% is paid to the seller’s agent and 3% is offered to a buyer’s agent.
It’s important to note that all real estate commissions are negotiable by law and even though many realtors won’t budge from the 6%, it doesn’t hurt to ask. There are some firms that are willing to offer their services at a lower rate. Unsurprisingly, these modern-day brokerages are growing the quickest in most markets.
If the seller is paying for all of the realtor commissions, using a buyer’s agent is free, right?
Absolutely not! While most agents may try to convince you that their service is free, you are paying for it indirectly because their 3% commission is factored into the price of the home. Home sellers know that if they have to pay 6% in realtor fees when they sell, then they will make sure to take this into consideration when determining a list price and accepting any offers.
What’s the solution?
At Felix Homes Realty, we’re continually changing the status quo because we believe it’s important to offer clients a better solution. We brought you the 1% listing fee and now we are proud to announce our Buyer Savings Program. With our Buyer Savings Program, you can save up to 1.5% off the price of your dream home!
How does the Buyer Savings Program work?
When you work with a Felix Buyer’s Agent, we only charge the seller a 1.5% commission instead of the typical 3% commission. We can do this because our proprietary software makes the work easier and faster, reducing our own costs. We then reduce your offer price by 1.5%. This results in you getting your dream home for 1.5% off. Meanwhile, the seller still ends up with the same net proceeds after realtor commissions. It’s a win-win!
For example, let’s say you are interested in buying a $500,000 home. When you buy with Felix, we will offer the seller $492,500 and specify that as your buyer’s agent, we are only charging the seller a 1.5% commission instead of the traditional 3% commission most buyers’ agents charge. You are happy because you just saved $7,500 off the price of your new home. The seller is happy because they ended up with the same net proceeds as they would have gotten in the traditional scenario.
Is there a catch?
At Felix, we can provide this innovation because we specialize in leveraging the power of technology.
Today, over 92% of buyers start their home search online. You can view the latest listings on our easy-to-use home search platform. Once you find a home you love, you can schedule an in-person tour on our website, or you can see when the listing agent is holding an open house.
If you are someone that prefers to be chauffeured around by your realtor in their new Mercedes, then this program is not for you.
How will I make an offer?
Ready to make an offer? Great, click the ‘Start an Offer’ button on our website and fill out the necessary information.
Not sure what price to offer? Not a problem, request a custom home value report from one of our valuation experts. If you have any questions throughout the online offer process, you can click the ‘Chat’ button to instantly connect with a local real estate agent.
Is this offer final or legally binding?
No. This starts the process. Once you submit your offer, an experienced Felix Buyer’s Agent will reach out to you to set up a Zoom video call. During the video call, your dedicated buyer’s agent will review every step of the buying process and confirm the details of your offer. Once the details are confirmed, your agent will send you the official offer agreement for you to sign via DocuSign. After you sign the offer, your agent will send it directly to the seller’s agent. At this point, it becomes a legally binding offer.
What happens after the offer is sent to the seller’s agent?
Once your offer is sent to the seller’s agent, the seller can either accept, reject, or counter your offer. We’ll notify you as soon as we hear from the seller’s agent and help you create a counteroffer if necessary. Assuming your offer was accepted, we’ll walk you through every step of the closing process just as a traditional buyer’s agent would.
What should my first step be?
Your first step as a buyer should be to get pre-approved for a mortgage. This will help determine your budget. This is an important step to understand your buying potential and an easy way to narrow down your options. If you have any questions throughout the process, you can call us or send an email to firstname.lastname@example.org.