They Don't!!... Here's Why:
Every time a home is bought, the mortgage company that loans the money to the buyer
performs an appraisal on the property being bought to determine its true fair market value
based on the sales contract price and comparable properties sold in the neighborhood in
the last six months.
If the appraised value is MORE THAN the contract price,
the seller will usually accept the lower contract price, because buyers usually will not
pay more for the property than the agreed-to contract price, because the lender will not
loan them more than the buyer and seller have agreed to in the sales contract.
If the appraised value is LESS THAN the contract price,
the seller will usually again accept the lower appraised value, because the buyer's
lender/mortgage company will not loan more money to the buyer than the appraised value or
the sales contract price, WHICHEVER IS LOWER!!
Since the appraised value, or the contract price, WHICHEVER IS
LOWER, is the money used by the buyer to buy the home, all of the COSTS (including the commissions, fees, points, taxes, etc) of
buying the home are taken out of the buyer's funds at the settlement table.
Therefore, whether commissions were a part of the agreed transaction or not, the
appraised value includes - among other things - the commission, which may or may not be
paid, but still remains a part of the transaction. Hence, the buyer's money - the driving
force for any purchase - ALWAYS includes a commission and
cannot be SAVED, because it is an integral dollar amount of
the overall transaction.
If you are told "THE SELLER PAYS THE COMMISSION",
he pays the commission out of his equity/profit that comes from the buyer's money at
settlement; again, the buyer can never SAVE the commission,
even at a new homes sales site, because an appraisal is always required and controlled by
the lender and the marketplace. The buyer ALWAYS pays for REPRESENTATION whether he/she seeks to have a broker represent them
or not.
So, why not be represented in a fiduciary capacity the
same as the seller is. Afterall, you WILL always have had paid for it, anyway. |
