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  • Writer's pictureTerry Krejci

Who REALLY pays for ALL real estate commissions?

Forget what you read on real estate websites that advertise “…our buyer agency representation services are at no cost to you…” Really? At the closing for a real estate transaction typically the parties present are the sellers, buyers, and one or two real estate agents. Only one of those parties brings money to the closing. It’s the buyers. So who is really paying for the real estate commissions paid to the agents representing both the buyers and the sellers? It is the buyers. In a typical transaction where a property is listed through the Houston Association of Realtors, real estate commissions are built into the price of the house when it is listed. So the statement “…at no cost to you” is at best deceptive and at worst dishonest.

That begs the question …” why would you NOT have someone represent YOUR best interest in a residential real estate transaction if you are paying for all the commissions?” Unless your agent is an EXCLUSIVE BUYER’S AGENT then the buyer’s agent “representing” you as a buyer is either a dual agent (which is illegal in Texas) or they are an “intermediary”. Intermediary agency practiced in Texas reduces the level of fiduciary services provided to both (seller

s and buyers) in a transaction.

While you cannot control the level of services provided to the seller, you CAN maximize the buyer agency services provided to you, the buyer.

For more information on how Intermediary Agency in Texas benefits real estate agents and the common conflicts of interest that are inherent in Intermediary Agency see the separate blog on our website.

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