Real Estate Facts

There are Sales Associates which are licensed as Real Estate Agents and there are Brokers which are licensed as Real Estate Agents. The difference is in experience and training. A Sales Associate must work under a Broker who is responsible to see that all of the Sales Associates transactions are properly handled with in the law.  A Broker is a seasoned real estate person who has practiced as a Sales Associate for a number of years and then took additional training to become a broker. A broker can sell real estate and supervise other agents. Each office has a Broker of Record and other brokers known as Associate Brokers. An Associate Broker is a Fully Trained Broker who is licensed as a broker but whom works out of a company.  

 Compensation For Realtors and Sales Associates and Brokers

Compensation is strictly on a commission basis. For each real estate transaction there is a Buyers Broker side and a Sellers Broker side. In most residential transactions the seller of the property pays the commission to selling broker. This broker commission is then split into 2 halves. One half goes to the Selling Brokers Office and the other halve goes to the Buyers Broker Office.

The broker in each office then splits the commission received with the Sales Associate and Listing Agent in accordance with a contract the Sales Person/Listing Agent  has with the broker. If the Listing Agent sells the home, they are entitled to both halves of the commission subject to the Brokers agreement.

 THERE ARE 2  IMPORTANT THINGS TO REMEMBER

 1) Typically no one collects any commission unless there is a sale..

 2) The Sales Person only gets a portion of the commission upon a completed sale.

 Your Sales Person/ Listing Agent should always be working together to get an agreement to sell the property, as neither will collect any commission if it is not sold.

 Realtors are Sales Associates and Brokers who have joined a local Board of Realtors, which has special guidelines and ethic responsibilities to uphold the high ethical standards applied to those who are members. The board also administers a MLS (Multiple Listing Service) where cooperating listings are found for all Realtors to show and sell. I am a member of the Saginaw Board of Realtors.

 In our state Agents may represent  a party in real estate transaction as Sellers Agent, Buyers Agent, Dual Agent or as a transaction coordinator. In most cases the agent is deemed to be representing the Seller unless a specific Implied, Oral or Written Contract has been executed between the Client and the Agent.

While it is different in some areas of the country, in this area it is common practice that the fees paid on most real estate transactions are collected from the seller.

The seller pays a REAL ESTATE fee to have the home sold and the sellers representative and the buyers representative split this fee as their compensation.

The buyers fees are simply his/her down payment and loan fees.

In our state a real estate associate can represent a buyer solely as a disclosed buyer’s agent and still collect the pay for services from the sellers fee paid for the sale of the home.

There are however, several different levels of Buyers Agency.

There is a simple disclosed Buyers Agency where the sales person simply says that they are representing you and the rest of the agency is implied but not defined.
 

There is a simple Non Exclusive Buyers Agency, where a contract is signed between buyer(s) and agent and the contract spells out what services will be provided. With a Non Exclusive contract the buyer can use the services of another sales associate and not be obligated to pay a fee for services rendered.

The third type is an Exclusive Buyers Agency where you are bound to that agent and may not purchase a home from another agent with out compensating the Buyers Agent for his/her work.  The agent is also required to perform the duties as described in the contract.

There is two types of Buyers Agents

1) A Real Estate Person simply agrees to act as a Buyers Agent. Any Real Estate Sales Person may do this regardless of experience.

2) An Accredited Buyers Agent, who is a seasoned Real Estate Professional, who has gone to school and been awarded the "ABR "designation, agrees to act as a Buyers Agent. 

As an Accredited Buyers Agent and  Associate Broker since 1980, I am experienced and trained to properly represent my clients in all Real Estate transactions.

How does “Buyers Agency” help Sellers?

When a Seller lists a home with a Real Estate Broker they sign a listing agreement and define how a broker is to market the home. One of the decisions to be made is how other Realtors will represent Clients whom they are showing the home to.

If the Seller accepts that the Multiple Listing Realtors will be able to represent the Seller and Seller will pay a fee to Realtors who are Representing them as Subagents of the Listing Broker, the Seller MAY BE HELD LIABILE FOR MISREPRESENTATIONS OF THE SUBAGENT. If the Seller designates that a cooperating commission will only be paid to a Cooperating Broker if the Buyers are represented by the selling agent as a Buyers Agent, the Seller has diminished the possibility of being responsible for the actions and/or misrepresentations of the Buyers agent in the transaction.

Further discussion of these items should be explored with the listing agent at the time of listing the property, and if they do not have a grasp of the legal side of these facts, the Seller should seek advice from an experienced Broker and/or legal consul regarding their rights and options when listing the property.

The above information is not intended as  legal advise. The author is not an attorney and makes not representations as to the legal ramifications regarding any of the information herein. This information is intended as informational only and should be independently verified.

 

INFORMATION PROVIDED COURTESY KEN TESKE

ASSOCIATE BROKER/REALTOR

Coldwell Banker Bellinger RE