With more and more people turning to the Internet for substitute sources for ways to sell their home, the discount is becoming a larger player in the real estate industry. The question is, is this really a good thing for consumers?

How Is a Buyer Agent Commission Amount Determined?

Let's start with the question of who decides how much a buyer's agent is paid. Is the buyer's agent recompense determined by the amount presented in the MLS Listing? Definitely not. Many people think it is, but the buyer agent commission is definitely not settled on by the amount a seller is willing to put on toward a buyer's agent pay.

The fee a buyer's agent receives (at least in Texas) is resolved entirely between the buyer and the agent he hires, as set forth in a Buyer's Representation Agreement. Practically saying that the buyer gives his agent his salary. It is so ordered in the agreement that buyer compensates the agent a particular amount, not the MLS Listing.

In our Buyer Rep Agreement, a buyer accedes to pay us 3% for our job done as buyer agent. We get the 3% without considering the MLS listing as made clear to the buyer. We will endeavor to get payment of the pay first from the seller, and have always succeeded in doing so, but if the seller is offering less than 3% to buyer agents via the MLS listing, our buyer will be responsible to pay the discrepancy or decide to pursue a different home. On the flip side, if the seller is offering a buyer agent bonus, or more than 3%, we rebate that to the buyer so that our motivations and advice can never be attributed to a commission amount.

So far this year with only one MLS listing out of 30 closed deals where a seller offered a 2.5% commission for the buyer's agent. The seller on that listing offered 2.5% commission. We updated the offer to contain the 0.5% difference in paragraph 12 of the sales contract, where the seller pays for in some of the buyer's closing cost to which the seller acceded. The buyer was going to get different home if the seller had not

consented. The 0.5% variance paid for by the seller provided the buyer to complete the 3% commission for us. The buyer's afford to pay the difference was without question nor can the seller save for that 2.5% offer.

Do Realtors Avoid Listings That Pay Less Than 3%?

I find silly the statement that agents will shun of the discount brokers' listing by consumer groups and others. I don't see how they can. When a buyer signs up with us, or any other Austin Realtor, we have the ability to set up an Internet search portal that informs the buyer via email each day of new catalog that go with that buyer's requirement. Every buyer gets this same service from us but cannot say how many other agents in Austin carry out the same, but it is a useful devise for us and our buyers as part and parcel of the MLS System with no extra cost.

Search portals do not recognize the commission amounts presented on particular catalog. Buyers can browse listings fit to their criterion. For those who say that Realtors evade or ban listings that pay less than 3%, that's hogwash. The system does not allow sorting out and keeping from buyers those listings.

When the buyer gets all listings and new ones that come up in the system about properties that complement their criteria they inform us and in return we show all listings of good candidate material.

This is all for now but part 2 of How Discount Realtors Work needs to be looked into.