The Role of a Real Estate Agent
As the name suggests, Real Estate Agents are key in the world of real estate and it is important to understand their role in the transaction.
In it simplest form, the Real Estate Agent is engaged by the vendor (the seller) to sell their property for the highest price possible. Traditionally, agents are paid a commission which is a percentage of the total sale price for the property. For example, if the agent sold the property for $900,000 and their commission was at two percent, they would receive a sales commission of $18,000.
Each agency will have different variations on how their commission are determined and it is not uncommon to have an incentive commission for achieving a result over and above the vendor’s
reserve price. For example, the agent and vendor might agree a sales commission of two percent for a result up to $900,000 but on top of that, they may have additional bonus such as an additional $10,000 for any result over $950,000.
You need to be aware that the agent is always working in the best interest of the vendor as they are engaged to do so. However, in order to transact a property, a agent needs two things:
1. A property to sell
2. A buyer to purchase the property
Agents need buyers to achieve their ultimate goal which is why they take the time to conduct open homes, answer questions, complete follow up calls and get to know you. All these actions are a party of their process but as the buyer, you need to remind yourself that the agent is engaged by the vendor.
The Buying Coach is here to level the playing field for buyers and ensure you are educated to make a well-informed decision when purchasing your next property.