In the state of Pennsylvania, an oral agreement in real estate is not legally recognized.  Therefore, in order to be represented by a real estate agent as a buyer you must have a signed buyer's agency agreement.  

So what does this Buyer Agency Contract entitled you as a buyer to.  First, it ensures that a real estate professional is representing your interest, and not only the seller's interest.  You will have someone to explain and walk you through each step of the process, assist you with the lending process and getting connected to a lender.  You will have someone to help you find the home you are looking for, as well as help with negotiating the right price and terms for you.  You will have an advocate with lenders, appraisers, and the seller's.

This may all sound great, but with anything else the question becomes how much will it cost?  To answer that we need to look at how a real estate agent gets paid:

A listing brokers commission is usually 6% of the sale price.  The listing broker will then advertise to their own brokerage, and other brokerages that they will give 3% to the brokerage that brings the seller a buyer. When a buyer is found, the listing broker will pay the selling broker (or buyer's broker) the 3% on the settlement day.  Your buying agent is paid from a portion of that 3% that the buying broker collected.  

In most real estate sales today the listing broker will agree to give that buying broker the 3%.

So in most cases, you the buyer, do not owe any commission to your buying agent.  Though, there is a buyer broker fee that must be paid at the time ot the time of settlement.  For Berkshire Hathaway Homesale this fee is $295.00.

Now I know what you are thinking! Wait a minute! The seller pays your paycheck?  Doesn't that mean you work for the seller? 

No, even though my broker has collected a 3% fee from the seller when you buy a home, my broker is paying me out of that 3% for the purpose of representing you. If you are purchasing a home, our broker will accept a 3% fee from any seller, so there is no loyalty to a seller (except in Dual Agency See this entry). In addition, our agency contract clearly states that even though we (Berkshire Hathaway Homesale) may accept a fee from the seller we represent the buyer's interest.

So for representation, assuming you have a buyer agency contract, you will pay no commission other than the aforementioned broker fee.  It is really in your best interest as a buyer to find an agent that will help you through the process and help solve the problems that arise in a real estate transaction.

A Few Other Highlights:

• Your Information remains confidential.
• Expertise of Real Estate. (You have someone to walk through the process with you.)
• An Explanation of how the Earnest Money Deposit will work.

It is always a good idea to have an agent acting in your best interest.  If you are thinking of a move give me a call for a free consultation.