Please see our page “How Colorado Buyers Agents get Paid” for the latest 2024 changes as a result of the $418M NAR settlement, set to take effect in mid July, 2024
The way your buyer agent will be paid is included in your buyer’s agent agreement. These can be:
1) A commission paid at closing to the buyer’s agent based on the total sales price of the home
2) Hourly Fee
3) A Flat fee
The most common way is commission fee. 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 dollar hourly amount, determined in the contract that you would pay your agent. This is pretty rare. For the past 30 years, real estate buyers have grown to expect a commission at closing arrangement.
A flat fee would be a dollar amount set in the agreement that you would pay either up front, or as a minimum-maximum and may be worked in with other types of compensation. Retainer fees are a type of flat fee that can be worked in as refundable or non-refundable.
There is not a “no buyer’s agent discount.”
Usually, if the buyer does not have their own agent, the listing company will select a “designated buyer’s agent” within the firm who is different than the listing agent. The real estate company likes these kinds of arrangements because they can make money on both sides of the transaction.
The alternative that we recommend is for buyers to interview at least 2 buyers agents from different firms, and pick one to work with. When you do your interview, that agent must put in writing how they will handle the “in house transaction”. An in house transaction may happen If you fall in love with one of the properties listed by that firm and decide to put a bid on it. This creates an inherent conflict of interest because naturally the listing company would prefer to make twice as much money on that transaction–both the seller and the buyer side. An educated buyer will be prepared for this sort of scenario.
