People keen on identifying nice properties that are up for sale and subsequently buying them at reasonable prices often opt to retain the services of agents, to help them in that process. The buyers agent in question are referred to as real estate buyers agents. They help the people who engage them in identifying some of the best properties which may be up for sale at a given point in time, negotiating for the purchase of such properties and eventually sealing the resultant real estate (purchase) transaction deals. Naturally, for their efforts, the real estate buyers agents need to be paid: either in commissions, or in some sort of fixed salaries – or both. But real estate investors are known to be ‘tight people’ with their money. It is a well known fact that most of these investors are only willing to spend money if they are assured of recouping it in some way. The question then arises, as to what, in ‘recoupment terms,’ are the sources of the money which is spent paying commissions and salaries to the real estate buyers’ agents. And as it turns out, there are at least four such ‘recoupment’ sources of the money used to pay real estate buyers agents. The agents are typically paid with:

Money saved through their better negotiation skills. This is where an investor realizes that without the help of the agent’s superior negotiation skills, he (or she) would have paid X dollars for a given property. But thanks to the input of the agent in the negotiation process, he or she ends up paying Y dollars for that property. Then the investor in question can opt to share the saved sum of money (the difference between X and Y) with the real estate buyer who helped in the negotiation process.

Money earned through profits brought about by their work. This is where an investor, with the help of an agent, identifies a nice property, buys it for a song, and proceeds to sell it a much higher price, making a huge profit. He or she would then use part of the profit made in that way to pay the agent’s fees. Of course, the agent’s fees normally have to be paid promptly (as the agent can’t wait till when the property is eventually sold, to earn the fees). But the investor forking out money upfront in that way would do so knowing that the money is to be eventually recouped once the property is sold for a profit.

Money that would potentially be lost without the agents’ input. Many investors are awake to the fact that buying properties without agents’ input exposes them to huge risks of being scammed and losing their money in other such ways. They thus view the commissions or salaries paid to the agents as being justified in view of that fact.

Money earned in the time saved with the agents’ help. The real estate agents save their clients a lot of time. The time the clients would have spent looking for properties, conducting initial negotiations, studying marketing trends and dynamics and so on is saved with the help of the agents. Such time can be used by the investors to earn more money. That money can then be partially used in paying the salaries or commissions of the real estate buyers agents — who make it possible for it (the money) to be earned, by freeing up the investors’ time.