I am planning to buy a property of a seller who has a broker. Do I also need to hire the services of a broker? If I hire a broker, how much would I need to pay the broker who did not find the property?
It would be to your advantage if you hire the services of a broker who will represent your best interest on the negotiating table if you are not confident to face the seller’s broker. Remember that, if you choose to deal with the seller’s broker on your own, your rights and concerns will not be their business. Hiring your own broker to represent your interest will certainly make your position less vulnerable. In such a case, the broker that you hire will have you sign a Buyer’s Agency Agreement.
As for paying your broker’s fee, there are no set standards as to how much a broker will charge you for only negotiating on your behalf. Most brokers, even if they were not the source of the listing, will still charge you a rate between 2%-3%. Be honest with your broker as to how much you are willing to pay and try to arrive at a compromised rate.
The rationale is, putting the entire responsibility of closing the transaction in the hands of the broker is, unburdening you of the emotional stress and other challenges you may face, apart from banking on a higher probability that the broker will get you the best deal for the property you desire. Your broker’s compensation may well be worth paying for, knowing that you will be equally and professionally represented in a risky real estate transaction.
Ideally, the broker’s services are packaged to include the transfer of the title. Clarify though if your broker will also assist you all the way to transferring the title in your name, because then, that would save you more time & costs, relieving yourself from the stress of having to do these things on your own. Realize that you are actually buying peace of mind, something that is hard to put a price on.
