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I'll try to be as clear as possible here... I am selling a home - found the buyer directly through a friend. They already had an agent that they were working with, and offered that I could speak with said agent - I told them I wanted to do FSBO, but was happy to talk with them.
Agent assumed the sale - buyer and I had generally agreed to terms. Agent presents me with papers to sign with 6% commission, and me paying closing costs.
Quick note: House is not on MLS - agent has not shown the house - I have shown the house to the buyers twice.
I explain again that I wanted to do FSBO, but am open to agent doing the work and paying 4% instead of 6. Agent say that they will " make no money" if we do the deal at 4%. Agent goes back to buyer and says that "Seller wants more money" and is now trying to tack the extra 2% onto the cost of the house and have buyer pay it so that they make their $$$.
Several red flags are going off here... this just doesn't seem right.
I have a couple of conversations - 1 with a RE lawyer - 2nd with a separate broker. Both agree that agent is not acting in my best interests... and doesn't appear to be doing the same for the buyer.
Considering going in a different direction - buyer and I are happy with each other - but agent seems to be causing difficulty.
Are my suspicions valid? Am I asking too much here?
Feedback is much appreciated - thanks!
Last edited by scoobstein; 06-01-2015 at 05:09 AM..
Reason: added info
First, don't expect someone else agent to act in your best interests.
Second, find out the sort of usual commission in your area when a home is listed with a realtor. Commonly, the listing agent doesn't sell the home. Rather another agent brings a buyer and the arrangement may be, essentially, the commission is split in half. (From there each side has to share their broker, etc.)
So, at most you would pay the half that may be standard to the buyers agent. If 6% is common, then the other agents shouldn't expect more than 3%.
In some areas, the buyer pays his own agent he has contract with.
In this case, somehow the other side...get that other side...agent thinks she is working for your side simultaneously? That is probably why she expects some commission for your side.
However, the "I won't make money" doesn't wash given the normal expectations for sharing commission.
I you need an agent and needed to pay the other side's agent, you really really need to get one of your own.
Why does your friend want to stay with this agent at this point. Your friend might examine his contract with this agent and get a better one.
In the above scenario, in which the buyers engaged this agent, aren't they obligated to pay her? The seller has no connection whatsoever to the arrangement, and has not agreed to pay for the services of any agent. In this case, the agent didn't do anything yet, but I assume she will be handling the buyers side of the transaction?
In the above scenario, in which the buyers engaged this agent, aren't they obligated to pay her? The seller has no connection whatsoever to the arrangement, and has not agreed to pay for the services of any agent. In this case, the agent didn't do anything yet, but I assume she will be handling the buyers side of the transaction?
It is wide open to negotiation.
Seller should always look at Net Proceeds as the determinant of the deal.
As long as the seller collects an acceptable proceeds check, it hardly matters who "pays" the agent.
But, this agent strolling in and demanding 6% for representing one client seems pretty durn aggressive.
I only did a FSBO one time, and that was with my first home. Before it even went on the market, I found a buyer who was an employee of one of my neighbors. The Buyer had been working with an agent, and I told him that I would not be paying any RE fees or commissions. If he wanted the home, he needed to pay his agent in full, but to sweeten the deal, I offered him the home at a slightly lower price (about 10K lower) than I would have asked for it if I listed it (which I think is common in FSBO).
But, in general, I agree with the poster above who says "look at the net proceeds" or the big picture. Even if you have to pay a commission, if you are making equal, if not higher, than what you would be making if you listed (not to mention all the intangibles of not having to have it on the market, not doing showings etc) then it's worth it, IMO.
First...y'all are awesome. The net proceeds question is an interesting one. I originally asked for a certain net amt...and when realtor came back with numbers...my net was 5k higher than what I originally expected/asked..(Good). The "durn expensive" commission thought kicked in as well.(not so good)
It's a FHA loan for the buyer...and estimated costs from my end to get it appraised properly are now higher than expected.. which is also why I don't feel like I'm asking too much with a higher net number and the realtor meeting what I'm asking...which while it means a higher net...I also feel it's more than fair.
For the person who asked abt the buyer getting someone else to finish the deal...that's on the table as well.
I'm looking at a transactional agent from my side now who is asking 1.75 pct...which means I would cut the buyer to 2.25 or 2.5 as a take it or leave it kind of proposition.
Refuse to pay more than the normal split. After the agent pulled this, if your buyer doesn't have a contract with their agent, I say cut agent out of the deal completely.
The buyer usually pays for the appraisal, not the seller. And knowing stuff like this is why you could use the services of a listing agent.
The buyers agent usually gets 1/2 of the customary listing fee - it seems that in this case the buyers agent is asking for all of the listing fee. You have to realize in a FSBO with a buyer agent, the buyers agent tends to do most of the work for your side of the transaction as well.
If you wanted to pay the full amount much to list the property, hire a full service listing agent, get it listed on MLS and get many more people looking at your home.
Or figure how much you're willing to pay the buyers agent, make your offer, and stand your ground.
The agent "isn't going to make any money" at 4%? Honey, I think you were being generous -- if he had just walked in off the street as a buyers agent, and you had a listing agent, he wouldn't be getting a penny more than 3% -- but I doubt he refuses to show properties represented by other agents . . . so that pretty much negates what he's claiming.
Honestly, unless they have a buyer brokerage agreement with this guy, I'd tell the agent to take a flying leap. (Of course, in some cases, the fact that they said they had a broker and he brought a contract would be an implied agency, which some states would recognize.)
And, a previous poster is correct -- YOU don't have to pay this wahoo a single penny. He was not the procuring agent. You could simply refuse to deal with him, and let the buyers decide how they want to compensate him for his time.
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