Podcast Summary
Buyer's Premium: An Additional Fee from Agents: Buyers may encounter a buyer's premium, an additional fee from agents, which should be factored into their budget. It covers the agent's costs and aligns their interest with the seller's.
A buyer's premium is an additional fee that some agents may require from buyers on top of the mortgage payment to purchase a property. This fee is not a common practice but is becoming more prevalent. Jeff, a listener from London, called in to ask about his experience with Move Blocks, an online company, asking for an 8,154 GBP buyer's premium, including VAT. Rob and Rob, the hosts, assured Jeff that it's not unheard of, but it's the agent's decision, not the platform's. The reason for a buyer's premium exists is to cover the agent's costs and to ensure the agent's interest is aligned with the seller's. However, it's essential for buyers to be aware of this additional cost and factor it into their budget. While it may seem unfair, it's not a cause for concern if it's transparently disclosed and justified. If you encounter a similar situation, it's crucial to ask questions and understand the reason behind the buyer's premium before making a decision.
Buyer's Premium: An Extra Cost for Homebuyers: Buyers may face a buyer's premium, an additional cost where they pay the real estate agent commission instead of the seller. Factor it into your budget and consider if the property's value justifies the added expense.
A buyer's premium is an additional cost that some homebuyers may encounter in certain real estate transactions. Instead of the seller paying the commission to the real estate agent, the buyer takes on this expense. This can occur in situations where the seller cannot or will not pay the commission or when the agent offers to waive the seller's fees and charge the buyer instead. Buyers should be aware of this additional cost and factor it into their budget when considering a property purchase. If a buyer is presented with a choice between two similar properties, one with a buyer's premium and one without, they should ensure that the property with the premium offers sufficient value to justify the added expense. In essence, a buyer's premium functions as an extra cost, similar to the expense of making repairs to a property before purchase. Therefore, buyers should add this cost to their purchase price and evaluate whether the property still represents a sound investment with the additional expense factored in.
Understanding buyer's premium refunds: When buying an investment property with a buyer's premium, research the company and agent's reputation to ensure they'll make it easy to get your money back.
When considering buying an investment property with a buyer's premium, it's crucial to understand the circumstances under which you'll get that premium back. If you have to pay it upfront, there's a risk of losing it if the purchase falls through. Therefore, carefully read the fine print and research the company and agent's reputation to determine if they're likely to make it difficult for you to get your money back. As for buying investment property all-cash, according to Rob and Rob, it has its pros and cons. On the positive side, it allows for quick transactions and eliminates the need for a mortgage. However, it also means tying up large amounts of capital and missing out on potential investment opportunities with leveraged financing. Ultimately, whether buying all-cash is the better option depends on individual circumstances and investment goals.
Dive deeper into Ramsey's views on property investment: Ramsey advocates buying real estate with cash and against taking on debt, rooted in his belief that all debt is bad.
Dave Ramsey, a well-known personal finance figure in the US, advocates for buying real estate with cash and against taking on debt for property investments. Ramsey's perspective is rooted in his belief that all debt is bad, and there are no good debts. On an upcoming podcast episode, the hosts plan to delve deeper into Ramsey's views on property investment and share their own opinions, supported by real numbers. Listeners are encouraged to tune in on Thursday for a thought-provoking and informative episode. Whether the hosts agree, disagree, or find common ground with Ramsey's stance, the discussion promises to provide valuable insights into the world of property investment. Stay tuned for more on Ask Rob and Rob next Tuesday.
