If you have ever bought or sold a house you more than likely signed either a Listing Agreement or a Buyer’s Agent Agreement. In these agreements there are provisions that outline a commission that is paid to the Real Estate Firm you are utilizing in the transaction. The commission amount has to be disclosed. Each State in America has it’s own Real Estate Laws and Forms they use in a real estate transaction. In North Carolina, where Barnes McQuade Realty is licensed, we are required to have these agreements signed and in place before proceeding with the transaction.
These agreements not only have to disclose the commission amount that is being agreed upon, but if there are any other fees associated with the transaction paid to the Firm by the client, ie; you (buyer or seller), those fees have to be disclosed as well.
As simple as it seems, Success Based means we do not earn a commission unless the transaction closes. Barnes McQuade Realty does not put any other fees into our agreements, so the only money paid to our Firm is the agreed upon commission amount, once the transaction closes and is recorded at the County’s Register of Deeds.
The best example of this is if you sign a Listing Agreement that charges a commission fee of (x.x% of sales price) to list and sell your home. If the agreement also has in there that if the house does not sell, you still owe the Firm ($x) for our marketing efforts, then that would not be a Success Based Firm because they are still getting paid a certain amount. The same goes for buyers. If you sign a Buyer’s Agency Agreement that states even if you don’t buy, you owe us money, then that is not Success Based. These are only made up examples and every Firm has a right to their fee schedule and every client has a right to either agree or not agree to those terms.
One caveat to mention is if a buyer or seller is already under an agreement with a Real Estate Firm and then sign with another Real Estate Firm there could be issues with who was the procuring cause…that is a whole other issue that would involve our REALTOR® Code of Ethics and possibly require legal advice .
Well, not necessarily. The hopes are if we are working with a buyer and/or seller then we are all going to be on the same page and strive for a common goal. So, our goal is to close every transaction. With that said, we realize people’s plans change…they may not be moving after all, the house just didn’t sell within the listing agreement’s time frame or maybe our buyer’s ended up not wanting to move to a certain town or didn’t get that job they thought they would. Things happen and we understand.
It is in your best interest to research a potential REALTOR® before agreeing to work with them…trusting your gut…and reading their reviews is always a good rule of thumb.