Want to save some serious money on the home you purchase? It’s easy to do. Just learn these five simple words: “How much do you charge?”
Sellers have known that question forever. It’s often the first thing they say at a listing appointment. They understand that they are hiring a REALTOR(R) for representation and marketing, and they want to know how much it’s going to cost them.
Historically, buyers have not understood that they, too, pay for representation. REALTORS(R) have always insisted that the seller pays all sales commissions, even though every dollar on the closing table is brought there by the buyer.
Unless the seller is taking a loss, the buyer pays for absolutely everything. That’s true not just for houses, but everything.
When you buy a can of Coke, the marketing and advertising costs are not paid by Coca-Cola. They’re paid by you as a part of the purchase price.
In just about every other line of business, vendors roll out the red carpet for buyers because they know that buyers make the world go around.
Not so in residential real estate. We baby buyers, telling them tender, loving lies: “Buyer representation is free.” “I’m paid by the seller.” “My services cost you nothing.”
All of this is false.
The cost for buyer representation is rolled into the purchase price, just as the cost of marketing and advertising is rolled into your can of Coke.
There is a difference, though. If you would have bought the Coke anyway, you can’t ask Coca-Cola to scale back its marketing costs.
But if you’re hiring a buyer’s agent to help you buy a home you have already decided to purchase, you should practice those five simple words: “How much do you charge?”



