The joys of home ownership! It’s part of the American dream. But it can also be one of the most stressful experiences as you search for home, only to be beaten out by multiple offers, put through the ringer by the mortgage company, and so many other frustrations.
For more than 36 years, our team members have been helping buyers find the perfect home, negotiating on their behalf against often formidable demands from the sellers and opposing real estate agents, and then smoothing the way on the contract-to-close journey by recommending reliable vendors to perform those vital tasks such as home financing, legal representation, title searches, and home inspectors.
In August 2024, new state and federal laws changed the way real estate agents were paid for their buyer representation.
For decades, a seller’s broker would charge a commission to his client and would then split that commission with the buyer’s broker. For example, if Broker A listed a property at 6% commission and it sold for $500,000, the seller would pay Broker A $30,000. If an agent from Broker B represented the buyer, Broker A would pay Broker B $15,000. The buyer had no control over how much their agent was being paid, and lawsuits emerged claiming that by putting the amount the buyer’s broker was being paid in the hands of the seller’s broker, home prices were priced artificially high—thus costing the buyer money. It was also claimed that by publishing how much Broker A would pay a buyer’s broker on the Multiple Listing Service (MLS), unethical agents could choose not to show homes to their clients if those homes were offered at a lower-than-normal commission.
The new laws make this illegal.
A broker can no longer show a buyer-broker’s commission on the MLS.
A buyer’s agent must now execute a Buyer Agency Agreement with their client before ever showing them a property. The agreement must show how much the broker will charge for their services. That is the maximum amount the buyer’s broker can receive for their service—from all sources.
The buyer’s broker can be paid as a percentage of the purchase price, in a flat fee, or on an hourly rate. The buyer’s broker may charge a non-refundable retainer in case the buyer chooses not to use that broker after the broker has spent time showing them properties. The retainer is deducted from the agreed total compensation amount that is paid at closing.
The negotiated fee for service can be paid:
By the buyer.
By the seller.
By the seller’s broker.
By any combination of the above.
A buyer may instruct their agent to only show them properties where the seller or the seller’s broker has agreed to pay the buyer’s broker. Even if the buyer likes a property where the seller has not agreed to pay a buyer-broker commission, the buyer’s agent may submit an offer that is contingent on the seller doing so.
In New Jersey, all real estate commissions are negotiable, and always have been. That begs the question: “Why have the vast majority of real estate agents charged six percent commission (or 3% to the buyer and 3% to the seller)?”
After all, does it cost a real estate broker four times more to process an $800,000 sale than a $200,000 sale?
Obviously not!
Thus was born the fair, transparent pricing model of the HalfPriceCommissions.com Realty Team at Better Homes & Gardens Realty. Here is our pricing policy, plain and simple:
Buy any home up to $999,999 and our commission is 1.5%
Buy any home above $1 million only 1.25%
Most brokers charge a processing fee of up to $750 for all the contract-to-close transaction work. We only charge $299.
Examples of how we mean it when we say we will never charge more than 1.5%:
Scenario 1:
Mary agrees to pay ABC Realty a 3% commission if they help her buy a home. The home she buys has a seller who refuses to pay a buyer-broker commission because he has reduced the sale price of his home based on only having to pay his own broker. Mary pays her broker 3% of the sale price. But if Mary uses the HalfPriceCommissions.com Realty Team, she would only pay 1.5% commission!
Scenario 2:
Mary agrees to pay the HalfPriceCommissions.com Realty Team Realty a 1.5% commission if we help her buy a home. The home she buys has a seller who has agreed on his listing agreement to pay a buyer-broker commission of 3%. The seller will pay us the 1.5% commission we agreed to with Mary, and we will then instruct the seller to pay Mary the remaining 1.5% of the sale price towards her closing costs. That would mean Mary paid noting for our services and earned $7,500 towards her closing costs on a $500,000 home!
Scenario 3:
Mary agrees to have ABC Realty represent her to buy a home. She does not want to pay a buyer broker for representing her, so she checks the box on the Buyer Agency Agreement instructing her agent not to show her any homes where the seller is not paying compensation to the buyer’s broker. She could direct us to only show her properties where the seller paid at least 1.5% buyer’s-broker commission so it would cost Mary nothing for our representation.
Scenario 4:
Mary agrees to pay the HalfPriceCommissions.com Realty Team Realty a 1.5% commission if we help her buy a home. The home she buys has the commission schedule used for many years, with the seller paying the listing broker 6% commission, and the seller’s broker offering a 50/50 split with a buyer’s broker. The seller’s broker pays the buyer’s broker 1.5% as agreed by Mary, and the HalfPriceCommissions.com Realty Team instructs the listing broker to pay the remainder of their 3% buyer-side commission towards Mary’s closing costs.
Check out what you’ll save by using the HalfPriceCommissions.com Realty Team as your buyer’s agents, compared to traditional brokers who charge 2½% or 3% commission:
Buy a home for $500,000 You pay $15,000 to a typical 3% broker. You pay $7,500 with us!
Buy a home for $800,000 You pay $24,000 to a typical 3% broker. You pay $12,000 with us!
Buy a home for $1,200,000 You pay $36,000 to a typical 3% broker. You pay $15,000 with us!
Buy a home for $1,500,000 You pay $45,000 to a typical 3% broker. You pay $18,750 with us!
*in NJ, all real estate commissions are negotiable. Brokers typically add a processing fee of up to $750. Our processing fee is $299.
Your Road Map to Buying the Perfect Home
Have a buyer consultation with e HalfPriceCommissions.com Realty Team member so we can learn your specific needs, wants and preferences.
Execute a Buyer Agency Agreement which spells out our loyalty and duties to one another.
Provide your preliminary information to a loan officer and obtain a mortgage pre-approval letter (if you will need a mortgage).
Select the homes from those our team member has identified as meeting your needs, and visit them.
When you choose a home, our team member will calculate the current market value to guide you, and you will present an offer. Our team negotiates strictly on your behalf to obtain the best terms possible.
Once we have a meeting of the minds, contracts are prepared, you pay an “earnest money deposit), and this is held in escrow until closing.
You make the formal mortgage application with your loan officer.
You make appointments with the inspectors of your choice to check out the home, inspect for radon, wood-destroying insects, etc.
If you haven’t already done so, by now, you engage an attorney for legal representation.
The title company conducts a search for judgements and liens on both you and the sellers.
Purchase a one-year homeowner’s insurance policy.
Attend up to two final inspections in the few days before closing to ensure the home is in the same condition as when you signed contracts. Our team member will be there to assist you.
Attend settlement. Our team member will be there to assist you. Title transfers when the seller signs the deed, and the home is yours! Time to celebrate!
