Question Details

Ncr, Both Buyer and Seller in Atlanta, GA

Advice on using a buyers agent with FSBO seller

Asked by Ncr, Atlanta, GA Tue Apr 15, 2008

Our situation is that we've recently started looking for a house with a buyers agent. We've seen several houses already with this agent. The buyers agent has been helpful setting up all the appointments, etc. However, we've recently seen a house that peaks our interest and is FSBO. How should we proceed? Talk directly with the seller? Mention that we have a buyer's agent? Or ignore our buyer's agent completely?
We would like to turn around and use our buyer's agent as a listing agent for our current home when we get ready to sell, so eventually, we'll have to explain our actions. Will this ruffle any feathers?

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Answers

12
I answered your other question, and decided to read your other one...now that I've seen this one you must be quite the DIY kinda guy.

Look - real estate savvy starts with you. If you seek the help of an agent hire a great one who has a hyperlocal focus on the submarket that matters to you and pay them. Pay them well.

About 20% of the 36,000 real estate agents in metro Atlanta earn 80% of the commissions - they are paid well because they are specialized consultants.

Consulting is nothing more than the application by a specialist of technical information to a problem which, when solved, offers a disproportionate benefit to the client compared to the fee he pays.

If an agent started opening doors for you, and you are a guy who is pretty easy to read, then they wasted their time because you don't value their consulting expertise.
Web Reference: http://intowninsider.com/
0 votes Thank Flag Link Wed May 14, 2008
I usually do not check the "Buyer is obligated to pay" box, but that is my personal preference. I've had one buyer who chose to purchase a FSBO, and they were good enough to compensate me when the seller said he would not. Either way, I would have helped them out even if I didn't get compensated, they were good people.

So while it may not be a good practice on my part to protect my commission, I don't see much FSBO activity here in Fort Collins that would justify me needing to do it. Where the greater danger of losing my commission actually lies is with the new home builders. If I am not there when my clients view a new development, I have a large risk of not being paid. Usually that is taken care of by educating my clients, though.

I'm not sure if I answered your question or not, let me know and I will try again...
0 votes Thank Flag Link Wed Apr 16, 2008
Always keep your realtor informed of any property you want to see. No matter what, he/she will do everything possible to find your and your family the perfect home.
Your real estate agent will then contact the home owner informing them that they have a client wanting to see their home. Your agent will propose a one time written agreement from the seller that if their home closes with their clients, the seller is willing to pay the commission. Sellers usually agree to pay the commission for an agreed upon price. The real estate agent represents your interest and knows all the legalities, etc. Therefore, you are better served by letting your agent deal with the FSBO.
0 votes Thank Flag Link Wed Apr 16, 2008
Mike,

How is this usually handled in Colorado when option (3) under Sect. 8b is elected, "Buyer is NOT obligated to pay" (emphasis not added)? I am just curious as I would assume that most buyers would select the box that says that they are not obligated to pay, and I am sure there are some buyers that end up purchasing FSBO from owners that are unwilling to pay buyer commissions.

Thanks.
0 votes Thank Flag Link Wed Apr 16, 2008
Keep in mind, if you have signed a Buyer's Agency Agreement, you may be responsible for covering the 3% "success fee" for the buyer's agent. In Colorado, the agreement allows for the agent to either be compensated by the listing brokerage, or the buyers themselves. This should be negotiated up front when the Buyer's Agency is signed.
Web Reference: http://www.rebac.net/
0 votes Thank Flag Link Wed Apr 16, 2008
Ncr,

One more comment. If you decide not to use your agent, you should hire a real estate attorney to draft your offer letter and help you out along the way. This will likely cost you about $1500. The atty will make sure your offer contains contingencies (inspection, mortgage, etc...) and will work to keep the purchase process on track. Good luck.
0 votes Thank Flag Link Wed Apr 16, 2008
A good buyers agent will take it upon themselves to contact the FSBO and let them know that they have a client wanting to look at their property. The agent should also try to get a one time written agreement from the seller that if their home closes with their clients, the seller is willing to paid said commission. Sellers would/should be happy to pay a commission if the home sells for a agreed upon price. Both parties are happy, thus equaling a good and smooth transaction.
0 votes Thank Flag Link Wed Apr 16, 2008
Tell your agent about the house. Have your agent approach the seller to see if the will do a " one time show and sell". By doing this they have agreed to pay your agent the negotiated commission.
0 votes Thank Flag Link Wed Apr 16, 2008
I agree with Elvis. A qualified buyers agent will help you get a fair price for the home, also your agent is educated in what "could" go wrong and will most definately work to see that nothing goes wrong. When you are purchasing the most important investment in your life, you need qualified and educated people to advise you and that is a Realtor. By the way, most FSBO's are charging above market value in my area, hoping to make more profit without having to provide the inspections that a realtor would demand for their clients. Most times in life, you get what you pay for.
0 votes Thank Flag Link Wed Apr 16, 2008
The first step is to ALWAYS communicate with your agent. The agent maybe able to call the FSBO and ask if he/she would not mind paying a commission if the agent brings a buyer. In today's market, the FSBO may be willing to pay to move his/her property. If the answer is no, your agent should advise you on the best way to proceed if it is a house you are very much interested in securing. I think it would ruffle your agent's feather and show a lack of "trust" if you go behind the agent's back and secure a home with the FSBO - remember - the agent has your best interest at heart not FSBO and you want someone representing you who knows the law and has a fiducary responsibility to you.
0 votes Thank Flag Link Wed Apr 16, 2008
Ncr,

It is likely that your Realtor already knows about the house and has contacted the sellers. If the house is in an area that you and your Realtor have been looking, and the house matched what you are looking for, your Realtor has likely come across it in his review of FSBO sites and Craig's List for homes that match your profile. Often the Realtor calls the homeowner first, to see if they are willing to work with buyers agents. If they are, your Realtor will recommend you look at the house. If they are not, he or she likely will not mention the house to you.

Has your Realtor mentioned any FSBO owner homes to you in the past? If not, you should ask your Realtor to be less passive in his efforts to help you find a home.
0 votes Thank Flag Link Wed Apr 16, 2008
ok, but what about saving the seller the 3% commission? He'll have to pay that if I bring my buyer's agent into the transaction, but can avoid it otherwise. Seems to me that the seller would want to avoid paying that anyway possible. Thoughts?
0 votes Thank Flag Link Wed Apr 16, 2008
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