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Buyer Broker Fees Debut in Chicago

Date : June 14, 2012

There are several industries that charge a fee to become a part of their team. They have all kinds of things they call the fee. What of this became the case with brokers? What if brokers had to pay a fee every time they sold a home? Some real estate agencies are going to give it a try.

There are certain fine prints that go along with this. For example the renters, will be charged extra costs if an agent helps them find a rental unit that they later purchase. I need to be clear on the fact that this concept is not new to all brokers, but are definitely less common to the larger realty companies.

There are some of the larger realty companies that are taking the first leap on this concept. The other ones are playing it safe and waiting to see the response and how well the idea comes across before they try it. Of course if the idea appears to be going over well this will be a new idea all if the larger realty companies will grab hold of. If I had to make a guess I would say its not going to go over well, but I guess we just have to wait and see.

What does all this mean for the broker? This concept is going to impact some of the struggles a broker already experiences. Most buyers already want to look at several properties and even when they are qualified for a mortgage loan, the contract is still not signed. The there is those buyers who simply stop searching because they can’t seem to find what they are looking for. If a home has to be sold at a lesser price then the buyer first asked then the broker has to take a cut in commission.

This means that adding a fee on top of all this is going to drastically affect what the broker finally walks away with after each sale.

One thing that may work in the brokers favor is the fact that many buyers today realizes what a complicated world it is. This is why some are willing to pay a retainer to their broker. This money is credited back to the buyer or seller after the deal is closed. Of course if there is no deal the broker still walks away with something. This system pushes a lot of buyers to find something they are happy with because they don’t want to lose money and still walk away without buying a home.

Due to a large percentage of agents also handling rental properties, they are included in the new policy too. This means that if a tenant purchases the rental property within a year of renting, the new compensation structure also will apply.
Time will tell what all this will mean for the real estate industry and its brokers.

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