Hello,

We are selling our home (doing FSBO to avoid hurting three neighbors and two local friends who are realtors). We have communicated extensively via email and shown the house to a buyer with no Buyer's Agent mentioned.

We received an offer to purchase from this buyer, but the offer was presented by an agent who has had no involvement. The agent wants the 3% commission. We are more than happy to pay a Buyer's Agent commission, and our listing notes indicate this, but the fact that we knew nothing of this agent until the offer seems a bit off. Are we correct to feel this way? What is an appropriate response to the agent? Obviously we don't want to lose the deal, but we would be handing this agent around $12k.

Thanks!

Assuming everything else in the offer is acceptable to you, just counter $12 K higher. Simple.

As long as you net what you want how you get there is irrelevant as long as it's legal.

Just know the broker/agent doesn't represent you.The buyer doesn't trust a FSBO seller and wants representation.

FSBO's on average sell for 18% less than listed properties so even with an 6% commission you are 12% ahead listing with a broker but I understand not wanting to hurt feelings with people you know.

You can counter higher and will be okay if priced correctly.You still might have to sell lower if appraisal comes back low or you have a bunch of inspection issues the buyer will want credits for.

As an agent this happens in reverse a lot of the times, Just last month my business partner showed million dollars homes to a couple for 4 months, they were from out of town and wanted to see everything and learned the area.

They called her one day to thank her for teaching them about the area and wanted her to know they had bought a great house FSBO. She got nothing for that 4 months of work.

No matter if the mentioned it or not, if they elect to have a Representative, you should not fault the agent. They might even help solidify your price because the agent knows in order to get the commission that it has to be within reason.

I wish you luck and I hope it works out.

You can't stop them from having a rep. Showing the house is the easy part, once the offer is accepted, thats when the work begins. In the clients eye, a Realtor should make "easy money". It's the behind the scenes that makes all that possible.

Can't stop them from having representation, but you have no contractual obligation to pay the agent unless you accept the offer and that compensation is included in the offer.

Now, thats the cold reality of your obligation, but really these deals have become very complicated. Loan underwriting is brutal, appraisals are tough, there are lots of ways they can become unraveled after the contract is accepted.

Even though this buyer's agent won't be representing you, you will still benefit greatly from having someone involved that frankly knows what they are doing and can get the deal to the settlement table. I can't think of one deal I've done this year that there wasn't something that came up that tested whether or not it was going to closing that required expertise to deal with.

Sure it may "cost" you $12,000, but if the deal doesn't get to closing...get my point?

Would it have made a difference to you if they had said "Yes we have been working with an agent for the last 6 months" when they first toured your home?

You advertised that you were willing to pay an agent. So perhaps they wanted to keep their business to themself until they were ready to make an offer.

Where do agents get these statistics from? I guess the same peeople who have told us there is no bubble in the real estate market and that sales are on the rebound and keep running the commercials touting "Realtor" and then raising our dues to pay off more politicians????

I have actually suggested to some sellers to go FSBO, as that was the only way they could get the NET they needed, and I referred then to a Real Estate Attorney that would review their contract and represent them. That person then bought a home with me after they closed on their sale, as I gained their trust in advising them for their best interest not my wallet.

Good for you Mez for getting the sellers to come back around to purchase their next home through you!

You meaning they're lying in those commercials?

I did my NAR-ly thing last weekend and held an open house (anyone else silly enough to do that?) for Nar-ly's National Open House Weekend. Advertised it in the local paper (ohh, my ad was pretty and my logo just "popped" out at you - course, the ad was for me and my company - the open house was secondary - that's how it works, right?), and I advertised in the MLS and Craiglist. There were only 3 other companies that advertised for open houses during NAR-ly's National Open House weekend. I really expected there'd be more.

Got 3 visitors but one doesn't really count b/c she was from a local settlement office plugging her own wares on my dollar (or rather several hundred dollars) - made her, her hubby and child tour the house as punishment. House is still for sale!

Mostly I agree with what others have said. If you have ready, willingy, and able buyer, roll with it & pay the BA comp. In theory, and hopefully, the buyer's agent, and their company, is going to be doing a conciderable amount of work on your behalf, unless you have also hired an atty, appraiser, and a title/closing company already.

I also agree, and have done what Mez has done. Not only due to what a buyer needs to NET, but if they themselves have the capabilities to go FSBO, or with an MLS only/al carte company.

I'm going to take the unpopular view that you shouldn't pay the BA anything... except maybe a small fee for writing up the contract. This is simply a lazy agent trying to take away your equity and getting in the middle of a transaction - convincing buyers that they need him/her to make it happen - they don't. If they want representation they can pay for it themselves or work out a deal with the BA.

The BA is going to represent the buyer - not you. This is an industry ripe with contradition and you can bet that if an agent here was selling their house fsbo - none of them would accept this situation because the agent did not procure the buyer (procurring cause). Of course each deal is specific and motivation is the key factor regarding what you ultimately decide to do, but this BA should not be paid 3% of your hard earned equity IMHO. Help to get the transaction done is everywhere and often negotiable or free by other parties in the transaction... plus you have some friends/neighbors who can probably troubleshoot if necessary.

I also question these FSBO statistics thrown out by the NAR - which has been proven to provide false information to the public. You can select any set of facts you want to make the numbers more favorable to your cause. The only ones who manipulate the facts worse than the NAR is the US government.

The Agent was hired by the Buyer, not by you; so it's their problem to make arrangements regarding how much to compensate him/her, and how to do it.
The Offer has probably been carefully worded (if drafted by the Agent) such that the Agent will be paid out of the "proceeds of the transaction", and it will be the Buyer who hands that check to the Agent.

Now, if the FSBO seller offered to pay a buyer's agent's commission, then what is the problem here? When the seller thinks that BA came into the picture is irrelevant.

Actually, the seller is getting a pretty good deal in this state because most of our deals are done as "transaction brokers", which means we work to facilitate the deal. That seller is actually getting more representation than they are paying for.

So if you like the offer, accept it and do your part with the BA to get the deal done. And be happy.

How do YOU know that this agent didn't lead these buyers to your property??

The agent could have come in later to write the contract.The agent could have shown these buyers all types of properties before.

You are going on what they buyers tell you."Buyers are liars" in many cases.They tell parties what they want to here if it accomplishes what they want.

I challenge the FSBO concept.FSBO companies charge thousands of dollars sometimes to use their junk systems and when it doesn't sell the list with a regular broker.Now they pay the full commission plus have lost money trying to go FSBO before.

It it was EASY regular brokers and agent wouldn't exist period.FSBO has been around forever and has had it's change to dominate the market.

Yes the 18% is NAR statistics.Do you not think FSBO and all of them throw off junk numbers of their own??

It really doesn't matter to me.I sell commercial real estate.My clients are very busy and pay me very well.

At the end of the day you either sell or you don't.Don't get hyper focused on the commission.We have a saying "pigs get fat,hogs get slaughtered".

Don't let a deal die because of a commission,lose a buyer,and then with a price drop take a bigger hit to your net walk away price.

Locally: A buyer under a Buyers Representation Agreement is legally bound to pay their agent the agreed upon compensation specified in their agreement on the successful completion of a real estate transaction.

Therefore, in the event that a seller was unwilling to pay a full commission to the buyer's agent the short-fall in the buyer’s agents compensation would have to be made up by the buyer.

If a similar situation as herein described arose locally, the buyer would be faced with paying not only the seller’s agreed purchase price, but an additional $12,000 pursuant to their buyer agents agreement and this may cause the buyer to think twice about purchasing the property and walk away.

IMPORTANT NOTICE: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a Lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information.

If the buyers feel more comfortable having this agent represent them then I would just go with it. Showing a home and getting an offer is the easy part. When you go into escrow is where things can get tough unless you have someone who is ahead of the game and nows what to look for before it comes up.

In VA, procuring cause isn't just that an agent writes up a contract that is ultimately ratified. Procuring cause goes beyond that...in most cases, procuring cause includes the events that lead to closing (sometimes unbroken chain).

Just writing the contract is not procuring cause.

I'd pay the agent b/c, as alot of us agree, you could end up "losing" the buyer, and as a result you may have to lower your price thereby losing more money. Count your blessings in this market, if you ask me.

It always amazes me that most peoples perception of a real estate consultant is that we taxi around people looking for homes, and that's why we get compensated what we do.

Finding my buyer a property is only one small facet of what I do.

A real estate transaction done properly by a professional requires a great deal of attention to detail. I am paid well like most professionals because of my knowledge and training.

When I represent someone in a real estate transaction I take on all of the risk, I and the brokerage I represent are 100% libel for any mistakes made on a real estate transaction. I am paid contingent upon doing my job.

And if I don't do my job properly...

We're the first line of defense when something goes wrong, and the first ones that get sued.

As the first poster suggested - build the commission into the price, problem solved.

I wouldn't pay it. As an agent myself, I would be making sure I had contacted you first before showing the property. I think you have some definite room for negotiation here because it sounds like the buyers want it. As stated earlier, just wrap it into the sales price so the buyers end up paying it. I know as agents we work hard, but sellers who want to sell on their own should still be respected.

FSBOs are going to take over the real estate market and real estate agent's are going to turn into personalized marketers.

What do you base this on? Are FSBO's doing well in your market? Can you share some statistics to support your theory?

As the OP shows, contrary to your statement, an agent represents the buyer and that's how most FSBO's are sold.

Now to the FSBO's original question. You advertised to co-op with agents, you did not stipulate specific conditions like: "Agent must accompany buyer at first showing to earn a commission." I'd say lesson learned, pay the agent and be happy if it closes.

Like pikes peak posted above, you advertised to co-op with a buyers agent without specific conditons so there is your first lesson in real estate,CYA. As for other comments that say do not pay BA or counter to have the buyer pay the BA is wrong in THIS Case. Maybe the Buyers Agent was already working with the buyer,also did FSBO ask the buyer if he was working with an agent or not that is something we do not know. I have a question, was the listing on the MLS? If so maybe that is how the buyer found out about the FSBO listing thru his agent. We will never know.

YEAR # OF HOMES SOLD
AVERAGE PRICE

2000 14 244k

2001 14 261K

2002 12 301K

2003 11 379K

2004 14 446K

2005 9 436K

2006 8 533K

2007 9 458K

2008 5 459K

2009 13 440K

2010 10 397K (8K CREDIT)

2011 5 346K(report done 16nov11)


this is a reflection of a specific zipcode in my area. all are 3br 2 ba single family homes on .25 acres or less.


if your neighborhood is anything like this or the other 20 that i can produce that look like this......it would probably be in your best interest to sell now instead of blotching the deal, loosing the buyer and selling in a future market.

anyone who thinks an agent ...earns...their money by opening a door is an idiot....that is the easy part that a caveman could do....the hard part is everything that comes after....just like people not wanting to pay thing that they agreed to pay for example....

pay up and sell...if you are only paying 3% total for an agent to do both sides of a transaction, you are really winning..

remember, what you want has ...zero...to do with what you will/should/need to get ...ask all of the people who are on the market for "what the need/want" and have been there without a ready, willing and able buyer for 6,8,12,24 months...

if i were in your shoes, i would sign and move on....

good job for getting to where you are right now in regards to the sale!