“I just heard the same thing in a class i took last week. That it can't be written into the offer because the LA has already stated the commission split there. We were told it should be treated as a seller's concession, like giving a credit for a refrigerator or for closing costs.”

Paceryder, there seems to be a serious disconnect here about agency and other newbie agents knowledge of what that means.

When dealing with a FSBO, as has been talked here for the last few days, there is NO listing agent and NO commission split offered. Therefore, we are not talking about credits for refrigerators or window coverings, or co-op fees offered in the MLS by listing agents.

When representing a buyer who wants to buy a FSBO, in the absence of the FSBO offering to pay the buyers agent, the buyer can make an offer (asking for his agent to be paid and asked for in the offer contract, it's not the agent asking, it's the buyer asking) contingent on his agent being paid by the FSBO, as simple as that. If the FSBO still refuses the buyers request to pay his agent, we don’t have a deal.

There seems to be a great deal of confusion as to how to handle the commission issue with respect to an EBA. Naturally, what I am saying applies to NYS and I don't know how relevent this is to other States. I also have my own way of handling this issue.

The NYS agency disclosure form has two boxes for the buyer to check. One box states that the agent is acting as a seller's agent, the other states that the agent is acting as a buyer's agent. I generally do not press buyer agency on the first showing. If they don't specifically request that I act as a buyer's agent, then I act as a seller's agent until the second appointment. This gives the prospect a chance to get to know me without any further obligation.

Usually, on the second set of showings, I bring up the idea of acting as a buyer's agent. If they agree I have them do two things:

1. Fill out the disclosure again with the new date checking off the buyer's agent box.
2. Fill out the EBA and I include the lowest standard coop in the EBA.

Please note that In NYS if they fill out the disclosure and refuse to sign the EBA, then YOU HAVE A PROBLEM. If they sign an agency disclosure that makes you a buyer's agent without the EBA it increases your own liability and responsibilities by turning a customer into a client without any reciprocal obligation on THEIR part to use you as their agent.

The sticky thing is this: most buyers would LOVE nothing better to have a buyer's agent working for them with no reciprocal obligations on their part. Sorry: no can do! What I do is explain that by increasing my responsibilities in this way, I can better serve their needs BUT I need certain assurances in return in order to deal with the liability.

Assurance 1: That should the buyers purchase a home within the next six months, that they are obliged to use me as their agent.

Assurance 2: As a buyer's agent, I am obliged (within reason) to make them aware of all appropriate properties in a given area including FSBOs. I am more than happy to do this. However, should I locate a FSBO that they wish to buy, I am entitled to a reasonable commission even if the seller refuses to pay said commission. I explain to them that this is a VERY, VERY unlikely scenario and that I have never had to collect a coop from a buyer before. I explain that most FSBOs will pay the commission if they have a reasonable buyer on the hook.

If the buyers will not agree to these parameters, then I have to insist that I continue to represent the seller.

It is way too tempting for buyers to cut and run and try to save a few bucks for me to do this any other way. You would be amazed at what people will do to save the commission even after an agent has driven hundreds of miles and spent many hours counciling and hand-holding. I went on "faith" a bit too much when I started out and some bad apples have left me a little too cynical to bet on any buyers of fairness and ethics. This might be a product of being on the dog -eat-dog NY area where almost everyone is jaded beyond belief. However, let it be a fair warning to all...I've been badly burned more than once by buyers who were eager for the advice of a buyer's agent, but in the end wanted to "cut a deal" with a listing agent or buy FSBO directly and save the commission so they could use the money to buy granite countertops!

Bottom line: if I increase my responsibilities and liability in order to serve buyers as clients, then I must have some assurances that I will be their agent in the transaction and that I will get paid.

Getting the buyer's to 1. sign an exclusive agreement and 2. pay ANYTHING is going to nothing but "simple" where I am.

I realize what the discussion was, I thought when I responded that it had taken a side track into commission paid by another agent. Excuse me it I was in error.

What a mess of posts and reposts.

Paul,
I retract my statement about the not being able to negotiate commissions in a purchase agreement. I was figuring we were talking about an agent writing it in the purchase agreement, not the principal to the transaction.

Please don't insult my intelligence. You have no idea of my local and state laws. Don't act like you are better than everyone else. That is being arrogant. I know my laws and the Code of Ethics. I treat all my clients the best way possible.

Paul,
This thread started about FSBO's and not being obligated to show them to buyers. You obviously believe that you are obligated to do so. Yet I have asked for someone on this thread to please show me where our obligation lies in the COE or an actual provision to the law. Nobody seems to be able to furnish this info.

That's why I came home today with a 1.5 liter bottle of blackberry concord wine! LOL

If you want to go around asking every single FSBO if they'll pay you, be my guest. I don't have the time for that.

Even though we should always be looking out for our client's best interest first, we are still in this business to make a living for ourselves.

For example... What if you find a FSBO that matches your buyer's criteria perfectly? You call the FSBO seller and they will not pay you a commission at all. Are you still obligated to let your buyer know about this property, even though you won't be getting paid in case of a sale? If you say NO, then aren't you putting your best interest in front of your client's best interest? If you say YES, then aren't you just giving business away for free? I want you to answer this one. Don't say that you'll get an EBA signed either. Let's just say your buyer won't sign an EBA.

What would you do?

It`s friday and I just had a FSBO at closing attempt not to compensate me for our work.
Hard to believe that this could happen,yet, after everything was said and done this person felt that our commission was too high!
My response "Don`t close,default and allow the buyer to sue you for non-performance".

We walked out of closing and waited for the seller to decide.
Two hours of going back and forth with their attorney we finally closed.

The "Art of dealing with a FSBO"is a test of wills and patience!

What was your commission fee to this FSBO?

“For example... What if you find a FSBO that matches your buyer's criteria perfectly? You call the FSBO seller and they will not pay you a commission at all. Are you still obligated to let your buyer know about this property, even though you won't be getting paid in case of a sale? If you say NO, then aren't you putting your best interest in front of your client's best interest? If you say YES, then aren't you just giving business away for free? I want you to answer this one. Don't say that you'll get an EBA signed either. Let's just say your buyer won't sign an EBA.”

OK, one more time. If no compensation is offered by the seller, and the buyer says he does not want to pay me, we move on to the next property.
I do not work for free, and yes I place my interests first when it comes to me getting paid or not.
Again, I have no obligation to anybody to work for free. I hope that clears things up for you.

and this is one of the reasons why it is not unethical to go searching for fsbo's. you just proved my point.

"...and this is one of the reasons why it is not unethical to go searching for fsbo's. you just proved my point."

Glad to be able to help you.

re: the conversation with the FSBO people. Yep, they like to blame everyone else but themselves for why their house won't sell.

It all comes down to supply and demand, such a simple concept, but most people just do not get it.

Len,
My fee was $2795 for a home that sold for $176,000.