This is a question that almost every client asks. Who pays you? Who pays your fee? How do you get paid? All of these are forms of the same question. It just depends on which side of the closing table how you answer the question. The sellers might argue that they pay the fees because the title company disburses them from the purchase price at the closing and as a result they net less. The buyers might argue the same point by saying that the fees inflate the purchase price and are paid from the money they bring to the table.

The truth of the matter is that the amounts paid to real estate brokerages are costs that result from the transaction and they impact both the buyer and the seller. The real estate fees are large amounts of money and are almost always financed as a part of the purchase price.

There are several ways in which the buyer's agent can be paid and these are identified on the agency agreement. The one that is used the vast majority of the time is the traditional way in which agents have always been paid by having the fees disbursed from the purchase price at closing. This method maintains accurate records for accounting and tax purposes.

A very important point to remember is that who pays the buyer's agent's fees has nothing to do with whom the agent represents. In St. Louis the title company receives the funds from the buyer's mortgage company and disburses them to a lot of different people, which may include: the seller's mortgage company, the county tax office, the subdivision association, the building inspector, the surveyor, the listing broker, and the buyer's agent. All of these people are paid as a result of the transaction. Who pays and/or how we get paid are really not important. The important issue is representation.

Total representation can only be accomplished by the buyer having a clearly defined representation agreement with their broker or agent. That agreement should clearly state what the agent's responsibility is to the buyer, how the fee is determined, and how long the agreement will last. During an interview with you, your agent will go over the agency agreement with you in detail. This session will be done with no obligation to you.