A Very Basic Explanation of How Real Estate Agent Compensation Works
If you have never owned real estate before, it seems reasonable to conclude that having an agent could be expensive for someone looking to buy; I thought that myself before I purchased real estate. However, California real estate transactions are, in most cases, structured so that neither the buyer or the seller should have to pay their agent before the close of the transaction. Even at that time, the compensation is generally paid from the seller’s proceeds to his or her agent (the seller’s agent is also called the “Listing Agent,”) and that agent will split his or her commission with the buyer’s agent.
Dual-Representation Is Alive and Well
However, the Listing Agent can act as the agent for both the seller and the buyer. This is legal in California, and happens frequently, although not in the majority of transactions. Whether or not you as a buyer are comfortable with this is a matter of personal choice, but you should know that while an agent representing both sides of a transaction has an ethical responsibility to be honest to all parties, that agent’s primary affiliation is to the seller. So you don’t have to have your own agent, but if you want the full benefit of honest advice and experience, it is a good idea to work with one – it costs you the same either way!
So, If I’m a Buyer Who Wants To Find An Agent, How Do I Find One?
There are thousands of real estate agents who would be very happy to do business with you. They can be found on google or similar search engines, advertising on bus benches, sometimes even knocking door-to-door. Many people find a real estate agent by getting a referral from a friend or family member, and some find an agent by going to local Open Houses. In fact, I would be happy to refer you to an agent if you want to email me – I have access to a network of some of the best real estate agents in the country. Whatever method you feel most comfortable with, though, don’t be shy about asking questions – even though you won’t be paying your agent directly he or she is still working for you!