Are buyer’s agents services free for buyers?
No. While many real estate agents tout buyer’s services as being completely free for buyers, the reality is that buyers are often paying for these services indirectly-- it can be part of their mortgage since the cost of these services are customarily paid as part of the seller's closing costs which are part of the asking price on a home listed for sale thru a broker. When a Realtor lists a home they will customarily negotiate both the listing agent and the co-operating buyer’s agents’ commissions in their listing agreement (or ERTS) prior to putting the home on the market. Agents often show a seller a preliminary itemized closing cost estimate (also called a “net sheet”) which will itemize all costs that the seller should expect to pay, including commissions- resulting in the seller’s bottom line. All of the seller’s costs are part of the sales price.
Recommendation: When hiring a buyer’s agent, be sure to ask if they charge any additional fees at closing; these fees can sometimes be between $200 and $1000 at closing as part of or in addition to any other commissions. You may also request a copy of their buyer’s agency agreement, which will detail how they’re paid and whether or not the buyer could be responsible for paying commission directly to an agent.