Looking for a house or selling a house on your own is not an easy endeavor. There is a substantial know-how involved in listing your property at most favorable price and reaching the buyers on the market. The agent is able to advise you on the fair market value of the property, guide you through the bidding process and arrange showings. Your realtor will also negotiate and submit the offer. Without a doubt, the assistance of a realtor in the process is extremely valuable.
Many Connecticut sellers and buyers use the services of a licensed real estate agent. The fee you pay for the service, called commission, depends on the listing agreement (if you are a seller) or exclusive right to represent buyer agreement (if you are a buyer). You should read those agreements carefully.
Most commonly, the commission is a percentage of the final purchase price of the property and it is paid by the seller. The buyer’s agent is typically paid through commission split from the seller’s agent. In most transactions there is no cost to the buyer to be represented by a realtor, however, there are few exceptions. For example a buyer may have to pay his realtor in the following examples:
- some brokers have administrative fee payable by the buyer
- if you are buying property from unrepresented property owner (“for sale by owner” seller) and you don’t negotiate the issue of commission payment
- if you have express agreement with the seller regarding the payment
- if you find a home on your own or with a different agent during the time when you were still bound by agreement with your realtor
The last example was recently highlighted by Connecticut Appellate Court in a case William Raveis Real Estate, Inc. v. Zajaczkowski (172 Conn. App. 405 (2017). The buyers in this case signed exclusive right to be represented by real estate broker for a term of one year but before the term ended signed a contract for a purchase of a home with a different broker. The second broker was paid at closing by the seller but the original broker sued the buyers for three percent commission and won. You can read full text of this decision here: William Raveis Real Estate, Inc. v. Zajaczkowski et al.