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The buyer does not pay for the costs of using real estate agents in upfront money. They pay the cost of using agents by paying a higher price for the property,
by syops 5y ago
The buyer does not pay for the costs of using real estate agents in upfront money. They pay the cost of using agents by paying a higher price for the property, all other things being equal, if no agents are used.
- aj7 5y agoThe buyer pays the costs of EVERYTHING. This does not mean that the deal isn’t good. The seller does not bring money to the closing. He brings the house title, figuratively.
- fshbbdssbbgdd 5y agoLet’s imagine that two identical homes are for sale, and it’s a buyer’s market. The owner of home A has contracted with a real estate agent to pay a 1% commission if there’s a sale, and the owner of home B has contracted to pay 2% to a different agent. Both homes have a market value of $1 million. The buyer will pay $1 million for either home, and won’t be willing to pay more for home B just because the seller has agreed to pay their agent more. We can see that the incidence of the agent’s fee is on the seller in this case. Put differently, increasing the agent fee decreased the net worth of the seller after the transaction, not the buyer. Given different facts, the incidence could be on the buyer. The fact that the buyer is supplying the cash doesn’t tell us who the cost falls on. The buyer could pay by adding more cash or the seller could pay by gaining less cash. I’m cribbing from the concept of tax incidence here: https://en.m.wikipedia.org/wiki/Tax_incidence https://en.m.wikipedia.org/wiki/Tax_incidence
- aj7 5y agoIndeed, various actions by seller can affect his yield. Nevertheless, all funds in a real estate transaction COME from buyer. Once you get this, you've learned something.