Lately, I have been getting many questions on how Realtor’s get paid, particularly from clients from out of state.  It occurred to me that when I bought in sold property on the East Coast it was a very different experience than here in Colorado, and most importantly, was very different cost-wise.  In my experience, on the East Coast and elsewhere in the US, all agents represent the Sellers, unless as a buyer, you hire the buyer broker and then pay the commission on top of the purchase price as part of your closing costs.  Many from this area, then avoid having representation to save the commission expense.  This can have a real down side as no one is then walking them through the process and working on their behalf, only protecting the seller’s best interest.

Fortunately, Colorado DOES NOT work this way.   It is a very buyer friendly state, much to the frustration of sellers.  The commission is already included in the purchase price of a property.  Commissions are paid out of the Seller’s proceeds from the sale at closing.  Any closing costs on top of the purchase price primarily are lenders fees, and title company fees to handle the closing.  Therefore, from a buyer’s perspective, they will pay no additional cost to have a buyer’s agent represent them.  Many of the seller’s agents will tell the buyer they do not need a buyer’s agent, therefore collecting double the commission at closing.  There are a few situations where this may work out well, but in general, it is best to have both parties represented.

So buyer’s…..make sure you get someone who you feel will represent your best interest. It is no out of pocket money up front, and the seller will pay for it at closing out of the purchase price.