Section 5 of the Exclusive Right To Buy Buyer Agency Contract from the SC REALTORS® it goes through in great detail how someone is compensated. To be completely transparent with you on what these options are, I’ve attached a screenshot of this segment of the contract below:
Three Ways An Agent Gets Paid
As you can see, there are only 3 ways that an agent can be paid. Some of these options include you paying out of pocket to have an agent to represent you. But in almost all cases, you do not have to pay. The first way, is via a Retainer Fee in which the buyer pays a nonrefundable retainer fee of agreed upon amount that is due at time of signing the contract. This can then sometimes be applied to the brokerage fee as well.
The second option is a Service Fee in which the buyer pays the broker a service of an agreed upon amount that is paid whether or not buyer purchases any property. There’s options as to whether that’s all an agent receives or if there is the ability to earn more as well.
The third option is for an agent to receive compensation from a brokerage fee, which is the way I’ve worked with almost all of my clients purchasing a home in Myrtle Beach. See, when someone lists their home for sale with an agency, they sign a listing agreement that not only discusses the total amount of commission the seller is willing to pay out, but it also discusses how much the seller wants to have offered to the agent bringing the buyer.
Seller Pays Agent, Not The Buyer
See screenshot from SC REALTOR® Exclusive Right To Sell Agreement:
As you can see in the above graphic, the seller has signed an agreement already to pay the agent bringing the buyer to their property long before you have ever even seen the home. They sign this listing agreement prior to an agent processing any type of paperwork. This all gets done long before any offers have been made by the buyer. So the seller pays, not the buyer.
Will I Save By Using The Same Agent?
Some think that if they use the listing agent they will save money because they are representing both sides. The thing is, when this happens, all you do is place even more money into that agents pocket. They get the selling side and the buying side. Yes, they are going to end up doing much more work, but you as a buyer are not going to get the best representation from that agent due to the fact that they already have a relationship in place with the seller of the property. They have already spent weeks working on their behalf, marketing their property and building that relationship.
When you hire the agent as a dual agent, they basically just become a messenger then working on your side and also on the seller side. All the agents can do then is let you know what the seller said and convey to the seller whatever information you want them to do. They can’t give you as much consultation and the absolute best representation because they have to remain impartial. At the end of the day, seller is going to get the same amount of money out of the deal, you don’t get as good representation, and the dual agent gets an even larger check. So this option doesn’t really help you at all.
Any Chances The Buyer Pays?
Now, there is a scenario where the buyer would have to actually pay a commission to a buyers agent which would only take place if the buyers have a signed agreement in place and then proceed to try and purchase a For Sale By Owner (FSBO) in which the seller does not agree to work with an agent. In the past 17 years in this business, I have yet to find one who will not at least agree to hire work with a real estate agent that has a ready willing able buyer present wanting to purchase their home. Most of the time, the sellers will gladly pay what the agent has placed in section C of the compensation section as long as the person buys their home. But, if the FSBO decides that they will not pay, and the buyers are set on purchasing that particular property, then the payment to the agent would become the responsibility of the buyer to pay either the specified amount or percentage that was agreed upon at the time of signing the agreement.
Other than this exception, it does not cost anything extra to have an agent represent you when buying a home in Myrtle Beach.
What About Buying New Construction In Myrtle Beach?
The other common misunderstanding is that when someone buys a new construction home in Myrtle Beach that they will end up paying more for the home when they go to a neighborhood with a buyer versus going on their own. This statement is totally incorrect. When someone has an agent represent them with the purchase a new home from the builder, they normally will end up saving them money, or help them negotiate upgrades into the sale.
I recently helped some awesome buyers from North Carolina purchase a home here in Myrtle Beach from one of the many national builders in the area. I was able to negotiate several thousands of dollars off the purchase price as well as get the buyers an $6,000 upgraded tile shower, a large concrete patio, 6 ceiling fans, appliances, and much more. If that buyer had gone into the neighborhood on their own, they probably would not have tried negotiating the price at all with the builder or ask for any of the various upgrades.
I had estimate till it was over I saved them close to $10,000 off the purchase price as well as another close to $13,000 in upgrades in the home. Having agency representation whey buying new construction definitely pays! The build also then paid me a commission for bringing the buyer for this home.
So in closing, the one thing I always say to buyers when meeting with them and explaining how buyer agency works is this: Make sure to hire someone to represent you. I hope that the person hired is me, but I know that isn’t always the case. The main thing is to find an agent that you can relate to and work well with. Once you find that person, sign the agency agreement and let them work on your behalf. Just make sure you have the right fit before signing the agency contract. Once you sign up, you are contractually obligated to work with that person until your agreement expires. Hopefully though, you work well together with this person and they can help you find the best home possible for the best price possible, in the exact location you wanted and you will spend years of happiness in your new property in Myrtle Beach. The best part is that having this type of relationship with an agent will not cost you anything more!
If you are thinking of buying a home in Myrtle Beach, I’d love the opportunity to work on your behalf in finding a home, so give me a call at 843-222-9402 if I can be of any further assistance, or do not hesitate to fill out the contact form to reach out to me.