Buyer Assistance Package
How a traditional program works
In a traditional real estate transaction, there are two agents: a buyer's agent representing the buyer and a seller's agent representing the seller.
The buyer's agent and the seller's agent each earn a percentage of the overall home price. When listing a property, the seller sets this percentage, known as the commission, earned by each.
Traditionally, the seller sets a commission of 6%, with 3% going to the seller's agent and 3% going to the buyer's agent.
In a traditional arrangement, the commission is already included in a home's price, so a buyer who pays $100,000 yields the seller $94,000; $3,000 goes to the buyer's agent and $3,000 goes to the seller's agent. (See our calculator)
Because the commission is set by the seller and is already included in the price, many buyers' agents claim their services are paid for by the seller. But the buyer is the only person bringing a checkbook to the closing, and both commissions come out of the money the buyer provides.
How the Greater Michigan Realty Buyer Assistance Package Works
Buying a property through Greater Michigan Realty (GMR) nets the buyer a credit at closing of one half of the commission allocated for the buyer's agent. If the seller sets the buyer's agent commission at the traditional 3%, the buyer gets 1.5% of the home price as a credit. The average price of a home purchased through GMR is $250,000, the average credit is $ 3,750.
| A Typical Buyer's Credit | |
|---|---|
| Price of a Home (Average) | $ 250,000 |
| Buyer's Agent Commission (3%) | $ 7,500 |
| GMR Commission (1/2) | $ 3,750
|
| Credit to You (1/2) | $ 3,750 |