Checking The Pulse Of The Kansas City Real Estate Market
After beginning a steady rise to prominence in real estate transactions over the past decade, Buyer’s Agents are now involved in more than 80% of real estate transactions I see completed. Yet many home buyers still don’t understand that my representation comes at NO cost to them. Many don’t realize that my commission is already factored into the list price of the home and they don’t pay me a dime for showing them all the homes that fit their needs and representing them throughout the Kansas City home buying process. I don’t even charge my buyers a transaction fee to cover my auto or gas expenses (like many Kansas City Realtors do to their buyers). My broker also doesn’t charge me any silly brokerage fees per transaction, so it’s not necessary for me to attempt to pass such fees on to my Buyers (like many Kansas City Realtors do). Nope, my representation TRULY comes at no cost to Kansas City homebuyers.
How does it work specifically? On any home you see listed on the Kansas City MLS, a Buyer’s Agent commission is factored into the advertised list price. This means it’s also already factored into the sales price when the home goes under contract and ultimately closes. Assuming your buyer’s agent isn’t charging you any transaction fees, then having a buyer’s agent represent you costs nothing and makes all the sense in the world. For those curious as to how a Buyer’s Agent actually gets paid, the commission is often handled as follows. When the listing agent lists the home with a Seller they agreed to a total real estate commission to be paid at closing – for the sake of round numbers, let’s throw out 6%. At the time of the listing, the listing agent lets the Seller know how the total commission will be split – say, 3% to the listing side and 3% to the selling (Buyer’s Agent) side. The listing agent would then split 3% with their broker at closing and the Buyer’s Agent would then split the other 3% with their broker.
Now I understand that there are some savvy Kansas City home buyers out there with enough ability to get a deal through to the closing table without a Buyer’s Agent involved. The question though, is at what cost? If for no other reason, it makes sense to have a Buyer’s Agent just to get into and view the homes in an organized and timely fashion. If I were buying a home in Sacramento California I would NOT head out there to buy a home without the assistance of a local Buyer’s Agent. I can’t imagine contacting multiple listing agents to get me into each home individually. If there were 10 homes I wanted to see, a Buyer’s Agent could likely get me into all the homes in the same day – if things went well maybe even in a 5-hour window. Try to get that done by contacting 10 different listing agents and I might not get in all the homes in a 5-DAY window.
There’s many other advantages to having a Buyer’s Agent on your side. The process of buying and selling real estate is much more complicated than it was just a few years ago and a buyer’s agent can simplify the process in a way that allows a Buyer to not have to oversee the many critical and often mundane tasks involved with the real estate process. A Buyer’s Agent could help save your earnest deposit if a deal goes wrong. Although agents can not provide legal advice, simply having a Buyer’s Agent involved who knows what they’re doing can steer their clients clear of potential pitfalls and potentially even legal trouble. In all my years, I’m not aware of any of my clients being sued or suing another party in the real estate transaction. While a lack of law-suits may not seem like the best way to rank success, it’s certainly worth consideration when you’re dealing with what’s likely the most expensive investment of a lifetime.
Now some buyers also think they can get a better deal if they go directly to the listing agent without a Buyer’s Agent. The problem is that the commission agreement is with the seller and the listing agent is going to be working to get both sides of the commission if there’s no Buyer’s Agent involved. If there’s no Buyer’s Agent involved, the listing agent is going to have to do twice the work, so the agent isn’t simply going to let a Buyer off the hook by giving away a large portion of the real estate commission. Even in a hypothetical example where a Buyer could save, say, 1% off the commission, the Buyer could have come out far ahead overall by having had a Buyer’s Agent represent their best interests, negotiate a better deal, avoid peripheral costly pitfalls like the inspection process, etc. It’s difficult to quantify because every deal is different, but the vast majority of home buyers would quickly lose more than they might appear to have “saved” by not having a Buyer’s Agent representing them.
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