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So I have two different parties who know each other.
One wants to sell their house- I will call them Party A- they want to sell it as a FSBO to save $. they don't know how much to list it for, what forms they need, etc.
The other, Party B, wants to buy a house in the neighborhood where this one is selling. They didn't know that Party A was selling soon. I have been working with them in finding a house for 4+ months but there hasn't been much available that meets their interest.
Party A has been asking me questions (before they knew I was working with Party B)- I feel like if they want the service, they should pay for it. What words do I use to convey this to them - as to not offend them but also so they would choose me if they wanted.
PArty A is open to showing the house to Party B (at my suggestion) but there hasn't been any discussion about commission.
Oh, did I mention that I do real esate part time and both these people are at my full time job.
Here, we have a form with which the agent registers the particular buyers with the FSBO seller, and the FSBO seller agrees to pay the buyer's agent commission of X percentage (whatever it might be). It also specifies on it, in writing, who you are representing (there are choices and you check the appropriate one). I'd be surprised if your state doesn't have such a form - ask your broker about it.
Until that is signed, don't take your buyers to see that house. It is what assures that you will be paid. If the seller doesn't want to pay a buyer's agent commission, and you have a buyer's rep agreement signed with your buyers that specifies a certain commission that you will first seek to get from the seller or seller's agent (ours does), you can tell your buyers that you know of a FSBO that they might want to see but that the seller will not pay your commission and if they buy that house they'll need to figure that into any offer they make, as they'll be in the position of owing it to you. And let them make the decision.
As for the FSBO seller asking for advice, you can give them limited advice on marketing and such, but make very sure that you're not putting yourself in the position of having an agency relationship with them. You might want to talk to your broker for guidance on that, as well - I don't know what state you're in, so obviously I don't know what the real estate laws are in your particular state.
Show Party A all the documents you will be working with and all the docs the buyer will be sending them and tell them that you will keep the deal rolling from start to finish. This will justify your commission. Tell them that for 4-5% you will do a one party listing with Party A with Party B's name on the contract. Take Party B through the home and if they write, you get both sides; Party A sells their house. And if Party B does not write an offer, Party A owes you nothing. Party A will see this as productive and safe and may even list with you in the future.
So I have two different parties who know each other.
One wants to sell their house- I will call them Party A- they want to sell it as a FSBO to save $. they don't know how much to list it for, what forms they need, etc.
The other, Party B, wants to buy a house in the neighborhood where this one is selling. They didn't know that Party A was selling soon. I have been working with them in finding a house for 4+ months but there hasn't been much available that meets their interest.
Party A has been asking me questions (before they knew I was working with Party B)- I feel like if they want the service, they should pay for it. What words do I use to convey this to them - as to not offend them but also so they would choose me if they wanted.
PArty A is open to showing the house to Party B (at my suggestion) but there hasn't been any discussion about commission.
Oh, did I mention that I do real esate part time and both these people are at my full time job.
Please help!
I see two options.
1. Explain the different legal relationships available to both parties. Explain that, as you know both of them, and are capable of getting all the appropriate administrative work done, and can make sure that the transaction goes smothly, and help them come to an agreement, you will work as a TRANSACTION AGENT (or whatever is the equivelant in yrou area.) Agree with all parties to a fee that you will be paid out of the transaction when the transaction is complete. Work with both parties to conduct a smooth transaction.
2. Explain the different legal relationships available to both parties. Explain to them that you will REPRESENT one of them, and give them all the fiduciary duties that representation entitles them to, including information, advice, confidentiality and vigorous negotiation on their behalf, while treating the other as a CUSTOMER, to whom you will be honest but for whom you will NOT negotiate. Agree on a fee that your client will pay you. Help your client buy or sell a house.
That is one of the frustrating things about these boards. Often times we don't get to know the outcome. Inquiring minds want to know!
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