How Much Does It Cost To Become A Real Estate Agent – What You Should Know Before Signing Buyer’s Agent Agreement


July 13, 2017 Facebook Twitter LinkedIn Google+ Online Auction


How Much Does It Cost To Become A Real Estate Agent

Does it cost the buyer anything extra to use a buyer’s agent?

Briefly, it is not going to cost you anything extra. If you compare buying a house to buying a plain pizza, working with an exclusive buyer’s agent is like the pizza sauce: it’s included in the price, it doesn’t cost you anything extra. Also, you don’t get a “no sauce” discount if you want to eat your pizza without the sauce. Similarly, if you don’t use a buyer’s agent, you will not get a “no buyer’s agent” discount.

In case you don’t like pizza, let me explain it another way.

The way your buyer agent will be paid is included in your buyer’s agent contract. In Colorado, these are the options included in the contract:

1) Success Fee
2) Hourly Fee
3) Retainer Fee

The most common way is a Success Fee, also known as “commission,” also known as “cha-ching.” If this is the method used, the buyer’s agent will only be paid if you successfully buy a house. If you don’t buy a house, the agent does not get paid.

An hourly fee is pretty self explanatory. There would be a set amount, determined in the contract that you would pay your agent per hour. This is pretty rare. How Much Does It Cost To Become A Real Estate Agent

A retainer fee would be a dollar amount set in the agreement that you would pay when you sign the contract. I think of it kind of like putting a deposit on something. Again, not common.

How much is the success fee?

In the Colorado Buyer’s agent agreement, there are two options: A flat percent of the purchase price, or an adjusted amount. The most common is a percent, which is typically 2.8% of the purchase price of the home.

Who pays buyers agent?

As described before, this is usually (almost always) paid by the listing broker, or the seller. In other words: you do not pay the success fee, the seller pays buyers agent success fee.

Let me repeat that.

You do not pay the buyers agent! How Much Does It Cost To Become A Real Estate Agent

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