What Is a Buyer's Premium and How Does It Work?
A buyer's premium is a percentage fee that may be paid by the buyer on top of the winning bid amount. In Eduardo's Online Bidding strategy, a buyer's premium may be incorporated into the transaction structure and can help reduce the seller's commission burden or cost, depending on the listing agreement and specific transaction terms.
How a Buyer's Premium Works
When a buyer's premium applies to a property, it is a percentage of the winning bid that is added to the total purchase price. As a hypothetical example: if the winning bid is $600,000 and the buyer's premium is 5%, the total purchase price would be $630,000. Whether a buyer's premium applies, and at what rate, is disclosed for each specific property.
How It Fits Into Eduardo's Online Bidding Strategy
In Eduardo's approach to online bidding, a buyer's premium may be incorporated as part of the overall transaction structure. Depending on the listing agreement and the specific terms of the sale, this structure can help reduce the seller's commission burden or cost, which may benefit both parties. Whether a buyer's premium applies, and at what rate, is determined for each specific property and clearly disclosed upfront.
How to Think About It in Your Budget
If a buyer's premium applies to a particular property, it would be factored into the total amount you pay. As a hypothetical example: if the winning bid were $600,000 and the buyer's premium were 5%, the total purchase price would be $630,000. Always confirm whether a buyer's premium applies and what the rate is for the specific property you are interested in, as this information is disclosed before bidding begins.
Disclosure and Per-Property Transparency
Whether a buyer's premium applies, and its rate if it does, is determined for each specific property. This information is clearly disclosed before bidding begins, so you know the terms upfront. Eduardo can walk you through how a buyer's premium might factor into a specific property's transaction structure.
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