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We are going to try to sell our house FSBO. We had an "old" sign in front of our house (forgot it was there in a rock pile....but that's another story)....
Anyway, someone in the neighborhood took down our number called me and I gave her a sheet I had about the house and a link to photos.
I must note that we were interested in selling the house about a year ago....but now really dont want to sell until next May/June 2013.
She in turn, gave the info to her daughter who is the one looking for the house. The daughter gave my name and number to her Buyers Agent.
The Buyer Agent called me and asked if I was willing to work with a BA. After a while I said yes, I would probably deal with her and I asked what % she was looking for and she said only 2.5 instead of 3% (well, gosh golly gee, aren't you just the generous sweetheart!)
Anyway, they came and saw and we haven't heard anything, which is fine with me becaues I am NOT ready to pack up and rent until I can move out of state next year.
But, if this happens again, what is the correct % I should go with? After all, the BA isn't doing ME any favors.....I've got a real estate attorney lined up with a contract, etc. and ready to go. (this is New Jersey by the way).
What are your thoughts?
For sale by owner, you owe nothing to a buyers agent imo. That's the whole point of being a fsbo. Also, remove the old sign. I wouldn;t have given out my info if i weren't ready to sell. And if you aren't ready to sell, say so....don't allow others to control your decisions, you may not like the final outcome.
So offer whatever you want. Keep in mind if you aren't paying an agent that amount the buyer will almost certainly want the price reduced by that amount. This is one of the problems with FSBO. Both the buyer and seller think they should pocket the savings of not using an agent.
The way agents/brokers should view a transaction is that they are being paid x% to Sell, or help buy a house...That x% SHOULD represent 1/2 of the total cost to sell or buy regardless of whether or not a person is FSBO or working unrepresented as a buyer.
If a Seller is doing FSBO - they should expect to only have to pay 1/2 of X% to a realtor....not working with a buyers agent will limit your market too much, so realistically you need to work with buyers agents.
An unrepresented buyer should expect to save 3% by doing the work of an agent themselves...but listing agents feel that they are doing twice the work, so they should be paid more so unrepresented buyers never realize any savings either.
The reality of the situation is FSBO wants to keep all 6% and unrepresented buyers are shunned by the super majority of most agents. The listing agents who will work with unrepresented buyers very seldom agree to share any of the savings.
So we end up with is a system where unless the property you are selling is either in an extremely hot real estate market area, or you are way below comparable values - then realistically you are probably not going to sell your house on your own, or buy one on your own and realize any real savings by not using a realtor. The realtors have complete and total control of the market and changing it now would require changes in state laws, which the realtors lobby would never permit.
The way agents/brokers should view a transaction is that they are being paid x% to Sell, or help buy a house...That x% SHOULD represent 1/2 of the total cost to sell or buy regardless of whether or not a person is FSBO or working unrepresented as a buyer.
If a Seller is doing FSBO - they should expect to only have to pay 1/2 of X% to a realtor....not working with a buyers agent will limit your market too much, so realistically you need to work with buyers agents.
An unrepresented buyer should expect to save 3% by doing the work of an agent themselves...but listing agents feel that they are doing twice the work, so they should be paid more so unrepresented buyers never realize any savings either.
The reality of the situation is FSBO wants to keep all 6% and unrepresented buyers are shunned by the super majority of most agents. The listing agents who will work with unrepresented buyers very seldom agree to share any of the savings.
So we end up with is a system where unless the property you are selling is either in an extremely hot real estate market area, or you are way below comparable values - then realistically you are probably not going to sell your house on your own, or buy one on your own and realize any real savings by not using a realtor. The realtors have complete and total control of the market and changing it now would require changes in state laws, which the realtors lobby would never permit.
I don't view this as an agent problem. I view it as a seller issue. They should negotiate up front what happens if there is an unrepresented buyer. If they don't like what the agent is offering, go pick another agent.
We would have preferred to not have the agent involved at all. But, given that she was, I would assume protecting her buyer from possible financial implications along with not losing the house would be in her best interest. As it was, we needed to leave, so we went along with it. If we werent as motivated, the deal definitely would have fallen through. WE FSBO'd because I believe(d) in certain areas properties dont really sit around. We were correct. I marketed the house on FSBO sites and CL as a vacation house close to major ski resorts and got many serious inquiries, one person even coming in from Boston. I didnt think an agent would be necessary.
My point is that you can't have it both ways. If you don't think a BA is necessary, then tell the BA or the buyer when s/he calls that you do not want to work with a BA, you will not pay a fee, AND then, do not expect any services from someone you are not paying. If instead you expect the BA to provide services to the buyer that will ultimately benefit you, then you should expect to pay for them. If the buyer on his or her own decides to pay the buyer agent and the agent then does additional work that benefits you as well as the buyer, then you have lucked out, but I'm not sure why a buyer would agree to do that.
The reasoning you are giving make no sense to me at all. Why should a BA protect her buyer from anything if she is uncompensated for doing so--and why would she take the risk that someone might object to some aspect of her uncompensated services? There's no benefit and there is possible risk. Why is not making the sale on a house for which she receives no fee "in her best interest"? What's in her best interest is selling her buyer a house for which she will receive a fee and with which they will be satisfied and will recommend her in the future. I see no benefit whatsoever to her in what you are describing so I see her behavior in withdrawing from the process as not only easy to understand, but probably much more likely to protect her professionally.
To the OP--thanks for clarifying that there are two scenarios being discussed here. My response (as a non-agent) to you would be similar to the above. Decide whether you expect the BA to work toward getting the deal closed. If not, tell BA to please inform his/her buyers that you will deal directly with buyers only and will not pay a BA fee. If so, then tell the BA you will pay the customary fee--or, if legal in your state, negotiate with the BA what you feel is a reasonable fee based on what services you expect the BA to perform (e.g., being present at the inspection and getting the buyer to accept the inspection report/negotiate repairs, making sure the buyer is financially qualified).
My point is that you can't have it both ways. If you don't think a BA is necessary, then tell the BA or the buyer when s/he calls that you do not want to work with a BA, you will not pay a fee, AND then, do not expect any services from someone you are not paying. If instead you expect the BA to provide services to the buyer that will ultimately benefit you, then you should expect to pay for them. If the buyer on his or her own decides to pay the buyer agent and the agent then does additional work that benefits you as well as the buyer, then you have lucked out, but I'm not sure why a buyer would agree to do that.
The reasoning you are giving make no sense to me at all. Why should a BA protect her buyer from anything if she is uncompensated for doing so--and why would she take the risk that someone might object to some aspect of her uncompensated services? There's no benefit and there is possible risk. Why is not making the sale on a house for which she receives no fee "in her best interest"? What's in her best interest is selling her buyer a house for which she will receive a fee and with which they will be satisfied and will recommend her in the future. I see no benefit whatsoever to her in what you are describing so I see her behavior in withdrawing from the process as not only easy to understand, but probably much more likely to protect her professionally.
Once an agency agreement is made, fiduciary responsibilities are not relieved in the absence of compensation.
So..."Why shoulda BA protect her buyer from anything if she is uncompensated for doing so..."
Because she is a Buyers agent, and has accepted that responsibility.
Once an agency agreement is made, fiduciary responsibilities are not relieved in the absence of compensation.
So..."Why shoulda BA protect her buyer from anything if she is uncompensated for doing so..."
Because she is a Buyers agent, and has accepted that responsibility.
Are there agents that would accept that responsibility without an agreement on compensation? That just sounds wacky to me.
She ain't the buyers agent until there is an agency agreement.
Whoops... Local rules again.
But, accepting the role means accepting the responsibility. The compensation follows.
In Arizona it is an Agency Disclosure and Election; not an agreement. The buyer has elected to have the agent be their agent, but there is no compensation agreement.
The buyer is really free to do what they want; buy a FSBO, buy a new build; all without the agent; or just dump the agent.
In the absence of an employment agreement, if the buyer wants to buy a FSBO through the buyers agent, then the agent should first obtain an agreement for compensation, whether from the buyer or from the seller. Otherwise, the agent should not have any involvement at all in that transaction.
It really points up the necessity of agents requiring a buyer broker agreement which spells out the compensation up front.
The agent in this particular case could claim that the buyer verbally agreed to pay her x% for working the transactionl with the FSBO.
The FSBO should also have a written unrepresented seller agreement with the agent which would state the amount the seller would pay the agent, or that the seller will not pay the agent, or if the agent is going to be paid by the buyer. If the agent is to be paid by both parties, then that must be disclosed.
We haven't heard the agent side of this story, so we don't have all the facts.
She ain't the buyers agent until there is an agency agreement.
Whoops... Local rules again.
But, accepting the role means accepting the responsibility. The compensation follows.
I guess that is what I was asking. Why would an agent go through with an agency agreement without defining compensation?
Couldn't any buyer that was going to buy a FSBO then just get the agency agreement and the agent would be on the hook for helping them? Maybe I am missing something.
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