Tahoe Real Estate – Who pays the Buyers’ Agent Commission?
Real estate is a local market. What may be typical in one area, or nationally may not be how things are handled here in Lake Tahoe.
In the Tahoe real estate market “who pays the buyers’ agent commission?” is a common question I’m often asked by my out-of-area buyers.
In our area, if the property being purchased is offered through the Tahoe Sierra Multiple Listing Service (TSMLS), then who pays the buyers’ agent commission is the Seller.
The broker representing the buyer becomes a Cooperating Broker since the property was listed in the TSMLS.
The Seller when they agreed to list their property for sale has agreed to pay the buyer’s agents’ commission by entering the listing into the TSMLS and posting what fee will be paid to the Broker representing the Buyer.
While commission rates in the state of California are always negotiable between the listing broker and the Seller, as part of that negotiation the Seller and Listing Broker will agree what the Buyers’ Agent will be paid.
In Tahoe, it is customary for the Seller to pay for both the Sellers’ real estate agent and the Buyers’ real estate agent brokerage commissions.
- That means that the Seller will pay for the buyer to be represented by an agent of the Buyers’ choice.
As the Buyers’ agent we never see the listing agreement between the Seller and their agent/broker.
Buyers’ Agents have no control over how much anyone is paid. Those negotiations were done between the Seller and the Sellers’ agent prior to the property being listed in the TSMLS.
What that means is each side of the transaction will be paid for representation, and those costs are on the Seller side.
Are there any situations where a Buyer may need to pay, or want to pay for the Buyers’ Agent Commission? Yes. Here are some examples:
1) For Sale By Owner (FSBO) – A Tahoe property that is listed for sale by owner and that seller is not willing to pay the Buyers’ agent a commission. A separate written agreement between the Buyers’ Agent and the Buyer will be needed for the Buyers’ Agent to be paid.
2) REO- Bank Foreclosure – Some REO/Bank Foreclosure properties offered for sale in our TSMLS have commissions so low, or identify that the Buyer is to pay all commissions (Seller and Buyer agents) that a Buyers’ agent will need additional compensation, or need to disclose this additional fee to the Buyer.
In these situations, if a Buyers’ agent will need for a Buyer to pay a Buyers’ Agent commission, they will let the Buyer know upfront and a separate written agreement is created so the buyer knows exactly what they are committing to pay their agent.
3) Short Sale – Short Sale commissions are also subject to reduction, even though the property is being offered in the TSMLS. Often buyers want to make sure they are getting good representation, and do not want their agent to be penalized due to the sellers’ situation. Buyers often agree to make up any commission difference should the lender cut the agents’ commission in order to close the sale. Again, a separate written agreement would be created to pay the buyers’ agent.
4) Exceptional Service – Buyers always have the option to pay their real estate agent/broker a bonus, or a higher commission amount other than what the seller has agreed to pay.
It’s always a good business practice to ask who pays for what in a real estate transaction, including the brokers’ commissions.
If you are a Buyer and are going to pay all, or part of a Buyers’ Agent fee, be sure to have all of the details put in writing and agreed to by everyone upfront.
In our area, the local Tahoe practice is for the seller to pay for all commissions, which includes the buyers’ agent fee, but that can always change, so ask if you are unsure as to who is paying for what fees.
Ready to start your Lake Tahoe Property Home Search?
Thinking about making Lake Tahoe, California your second home? Check out the homes that are for sale in Lake Tahoe, California here:
Want to see what condos are for sale in Lake Tahoe? Here are the current listings:
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For all of your Tahoe real estate needs –
Laura A. Allen | 530.414.1260 | Laura@TahoeLaura.com
BROKER ASSOCIATE, Tahoe Real Estate Agent
CalRE# 01473598
Coldwell Banker, Tahoe City, CA CalRE#01908304
All information is deemed reliable, but is subject to change, and/or correction without notice.
Tahoe Real Estate – Who pays the Buyers’ Agent Commission?