As real estate agents, we sometimes take it for granted that buyers understand how real estate agents are paid.  However, most first-time home buyers haven’t experienced the process yet, so we wanted to clarify some important points for those who may be unfamiliar with how it all works.

In most cases buyer representation is free of charge. It is traditional that the seller pays for the costs of all commissions of the listing agent and selling agent (buyers’ agent).  This comes from the proceeds of the sale. Sellers are fully prepared to pay the cost of hiring a real estate professional to sell their home.  The agent’s commission is negotiated and noted in a written contract between the sellers and the agent they select to market their home and represent them throughout the process.  Most of time, the commission is an agreed upon percentage of the selling price of the home.  That commission is shared or split with the agent who represents the buyers of the home. 

So there is no commission cost to the buyers for agent representation.  Obviously,  there will be other costs involved with the home buying process such as obtaining a mortgage loan and buyer inspections ect. A knowledgeable real estate agent will be able to explain the whole process to you in detail when you are ready to make your home purchase.

You can find more information for first-time home buyers in our article, Can I Afford to Buy a Home?

~Shea Hutchinson, Realtor Associate, HomesCentralCoast.com Team

Here’s a snapshot view of sales for single family homes in some of our Central Coast cities based upon statistics from the Central Coast MLS -Multiple Listing Service:

We continue to see more national articles that support our theory that the real estate prices on the Central Coast are starting to stablize, particularly in the Santa Maria and Orcutt areas.   In an article entitled “Real Estate Outlook: Worst is Over“, Kenneth R. Harney identifies some more signs of improvement in the housing market and some reasons for the signs. 

The Wall Street Journal printed an article today that backs our May 1st blog.  James R. Hagarty writes in “Home Sales Rise in Hard-Hit Areas
In it, he mentions, as we did, that lenders are pricing foreclosed homes more aggressively and that sales are up in those areas that are hardest hit.  This is the situation for Santa Maria and Orcutt real estate.

First American Title Company in Santa Maria reports each month on residential real estate sales activity and compares it to previous years.  Here is a summary of the number of sales of single family homes, condos,and Planned Unit Developments (PUDs.)  The report confirms that sales activity is really picking up.  In fact, the number of sales increased 60% from last year.  Another sign that the market is improving?

Total Sales in the Santa Maria Area for:
April 2008 – 117
April 2007 – 73
April 2006 – 97
April 2005 – 130
April 2004 – 112

 An article in the Wall Street Journal on May 6, 2008 by Cyril Moulle-Berteaux gives an opinion about the real estate market that supports our blog on May 1st Are Real Estate Prices Starting to Hit Bottom?

Berteaux raises some different and interesting points as to why he believes the market is starting to bottom-out.  Take a look at his article and see what you think: The Housing Crisis Is Over