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CA real estate practices: Buyers paying a commission
Old 01-25-2008, 09:58 AM   #1
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CA real estate practices: Buyers paying a commission

I had a conversation with my daughter who now lives in CA. She told me that when buying a house, you, as the buyer, have to pay a real estate agent a 2.5% commission.
I have never run across this in either IL or CT. Typically the seller pays (6% of the selling price) the commission on the sale.
Is this (buyer paying a commission) a common practice in CA, or was she just naive and run into a buyers agent looking for clientel? Thanks.
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Old 01-25-2008, 10:39 AM   #2
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It's the same here in CA as everywhere else ... standard practice is a 6% commission, paid by the seller.

Your daughter may be getting confused by the fact that the seller's agent and the buyer's agent typically split the 6%.

Of course, the 6% isn't universal. It could be 5%, which would explain the 2.5% idea. And at a certain level, you could argue that the buyer is paying for everything, since it's included in the price of the house!

But there's not usually any direct payment from the buyer to either agent.

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Paying a buyer's agent
Old 01-25-2008, 11:02 AM   #3
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Paying a buyer's agent

Generally you agree to pay the buyer's agent a percentage of the purchase price, say 2.5% or 3%. When purchasing a listed home, this payment comes out of the seller's agent fee, say 5% or 6%. When purchasing a for sale by owner or some other foreclosure or repo that is not offering a buyer's commission, the fee is added to the purchase price. It opens up the market of homes that the agent can offer the buyer, but also means giving up doing it yourself and possibly saving a fee. Don't worry though, anyone selling in this market is going to offer a fee or be so overpriced you are better off avoiding them.
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