Home Buying in 29642>Question Details

Csimmons, Home Buyer in Easley, SC

Can you buy a house that is "for sale by owner" without using the real estate agent who is working with you?

Asked by Csimmons, Easley, SC Tue Mar 10, 2009

I am going to be a frist time home buyer and I have a good real estate agent that has been helping me find that perfect home but the house that I love is a "for sale by owner"! Can I get this house without getting in trouble with my agent?

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Answers

38
If you like your agent. Let them know about the FSBO. They will contact them, and see if they are willing to "cooperate" (pay the buyer's agent's commission)... if they are willing, it's likely that the help of your professional Realtor will more than compensate for the commission, by helping you negotiate a better deal.

If the FSBO will not cooperate, most agents will be willing to step-aside, to allow you to purchase it on your own. If purchased without an agent... no commission will be due, assuming you have not signed an Exclusive Buyer's Agreement. If you have signed one, check the terms.
4 votes Thank Flag Link Wed Mar 11, 2009
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
That is such a misconception. Many times a seller doesn't like the sale price that the comparable marketing analysis indicates. Therefore a for sale by owner home may not be priced according to market value. They also are not always aware of the financing, legal requirements, surveys, appraisals, condominium and Home Owner Association requirements, contract deadlines. You maynot get what you expect or pay for. Remember you are buying a house from someone that is trying to save money. You are not going to make a dime on this seller. I am tired of having my profession knocked. I have worked very hard, studied hard and am constantly learning and paying for more education so that I can give my buyers and sellers the best information available. If you've had a bad experience with a real estate agent I am sorry to hear that but maybe you should have done more research yourself before hiring the wrong one.
2 votes Thank Flag Link Sat Mar 14, 2009
your reply sounds very defensive. this is a first time home buyer who is simply trying to understand the process of a for sale by owner.
Flag Mon Aug 12, 2013
Most FSBO's, Mike, are more than happy to "cooperate" with a buyer's agent, and willing to pay a buyer's agency fee.

and Many of the list-you-on-the-MLS-for-$500 don't require a co-op fee, they merely suggest one. You are right, however, that if they're advertising a co-op fee, that Csimmons doesn't need to worry about her agent being compensated.
2 votes Thank Flag Link Thu Mar 12, 2009
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
You're probably right, rockin'... and yet, just because the seller has enlisted the aid of an "I'll-put-you-on-the-MLS-for-a-fee" service, doesn't make them any less For Sale By Owner, nor any less "real".
2 votes Thank Flag Link Thu Mar 12, 2009
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Talk to your agent. How did you find this house? There are very few "real" for sale by owners today.
~~~~~~~~~~~
Not sure where you get THAT information. I see plenty of "real" FSBOs out there.
2 votes Thank Flag Link Thu Mar 12, 2009
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Okay agents. This is a situation where those of you who have maligned FSBOs on the internet, and ignored them in the marketplace may have done some harm to Csimmons' agent's chances for a commission. I will mention that I'm not making reference to Alan in anyway with the previous sentence, and he already knows that. However, if that FSBO has spent anytime at all on the internet reading all the crap that some of you post, and you think for one moment if he already has a buyer, he would automatically pay an agent to negotiate against him, you're dreaming. I would bet that he would much rather cough up that 2-3% to the buyer and pay an attorney.
2 votes Thank Flag Link Wed Mar 11, 2009
Wow, tons of feedback for you on this one! I completely agree with everything Alan has put in this thread. I would love to see the outcome and what you decided to do. It's almost impossible for any of us to advise if you will have issues with your RE agent, it depends on if you signed anything, since that information isn't provided we all would/are guessing on that end of things.

As for buying a FSBO, most are more then willing to pay a buyers commission. Some buyers don't mind paying it within the price, and some do. You need to do what is right for you. If you are a 1st time home buyer, just make sure you get a disclosure on the property, follow up with an inspection (good area for an agent to navigate & negotiate which could also save you the % of hiring the agent to start with depending on how the inspection pans out). Also your agent may be willing to assist you through the process for a flat fee provided you and the seller are able to work well together.

Obviously, I'm an agent, so my opinion can be biased but I have been on both sides, helping a home buyer buy a FSBO & being the agent that lost the deal when a potential buyer client bought a FSBO. Regardless, if you don't use an agent, a RE attorney might not be a bad idea just to cross your T's and dot your I's.

Please update us and let us know how it all works out;) Good luck
1 vote Thank Flag Link Wed Feb 24, 2010
According to our code of ethics any form of compensation is not allowed unless paid through the broker. Even if I were to do a consultation for you as along as I am doing so through my broker then it is paid to my broker. If you want to send my borker a camera at christmas I'm sure we will all be appreciative. Thank you. Sorry I called you John. Someitmes there isn't any area for gray...
1 vote Thank Flag Link Sun Mar 15, 2009
Hi Caroline,

I'm not "John" but thanks for the guess. :-) Surely there are ways of a person giving you a gift that doesn't break your ethics codes. Let's please not be too literal about the exact form or method of doing so. If you received a nice digital SLR in the mail afterwards with "to a good friend" (or on your birthday or at Christmas-time - to completely shield any notions of timing). That is a gift - and surely gifts are allowed - from one person to another. Our business, sales, is about relationships. Along the way I've become good friends with many people that I do business with - we get together on our personal time, sleep at each others houses, our wives and girlfriends get together, etc. Life is not so black and white that things like this don't happen and I personally don't think there's anything wrong with it.
1 vote Thank Flag Link Sun Mar 15, 2009
Yes, you can buy a home that is "for sale by owner" without using the real estate agent that is working with you but why would you want to? Your realtor can negotiate the price, make sure you have full disclosure, help with financing, make sure the terms of the contract protect you and are enforced, make sure all of the necessary inspections are done in a timely manner according to the conract and make sure you get the house at a fair market value. Or you can work directly with the home owner who is trying to get around the commission who may also be cutting corners in other ways. They are out to get the most they can get. You are out to get the best deal you can get. A realtor is a mediator and negotiator.
1 vote Thank Flag Link Thu Mar 12, 2009
Alan,

As I don't think you pay all that much attention to the NAR rhetoric regarding stats on FSBOs, I think Mikem is differentiating between the flat-fee listed FSBOs, and those that don' t have any agent assistance whatsoever.
It's not convenient for the NAR to include flat-fee listed FSBOs as FSBOs, as it would have a more positive impact on the success rate. :) At least that's the way I see it.
1 vote Thank Flag Link Thu Mar 12, 2009
Anyone, not just a realtor, would tell a first time home buyer that you should have a professional assisting you. If you are buying directly from the home owner then it is even more important that you have professional guidance. Think of your realtor as a general contractor. We not only negotiate the price based on market value but also make sure that your interests are protected from the time you make the first informed offer, through the executed contract until you go to settlement and get the keys to your new home. You have already established a relationship with a realtor. Any homeowner would love to get a hold of a first time buyer that knows nothing of what is about to happen to them. Trust me. Be safe. If you don't want to honor the relationship you have already established with your realtor then hire a real estate attorney; otherwise between now and settlement you will need to find a banker, a negotiator, an apparaiser, a property inspector, a termite inspector, repair estimates, your negotiator to renegotiate the contract if problems are found, someone to make sure you meet all the deadlines and don't forget all the time that all of this takes to coordinate everything. Oh, and don't forget to hire the right title company so you get a clear title. Good luck.
1 vote Thank Flag Link Wed Mar 11, 2009
Gosh...it is so scary that so many buyers are confused about comissions and fsbos. If you are a buyer and you truly believe that a fsbo saves money by not using an agent and passes some of that savings to you....come quick, I have a bridge to sell ya!

Unfortunately, this happens ofton. In Columbia, most of the fsbos I run into are severely upside down with their payments and are inches away from foreclosure. They try to sell the home themselves because they have to...not because they want to.

The pattern I see the most is:
Homeowners place fsbo signs in their yards, 6 months later the house is sold at the county auction or is in complete foreclosure.

Csimmons, try talking to your agent before you cut them out. Perhaps a deal can be made.

Ciao,
Roslyn Ferrell
1 vote Thank Flag Link Wed Mar 11, 2009
Absolutely, if you are the type of person who's word and written commitment means nothing, the type of employee who would be fine with your employer letting you know that he's found a way to get things done without you and has decided he's not going to pay you for the time and effort you've already given him, and even though you have a written agreement he's got good lawyers that will get him out of it. Realtors are professional, educated, and as with any profession deserve professional courtesy, consideration and respect. Good luck to you and best of luck to your Realtor.
1 vote Thank Flag Link Wed Mar 11, 2009
You certainly can........

However, assuming neither you nor the seller know anything about the sale/purchase process there could be serious consequences for both of you if the closing is not managed efficiently.

Remember, most deals today are being found in the short sale and foreclosure markets. FSBO's are no longer able to compete with these opportunities. Additionally, it has long been known the FSBO's have an inflated appreciation for the value of their homes.

Our recommendation is to consider all of your options when buying in today's RE market and consider protecting your interests by involving the services of a real estate professional.

Good luck
1 vote Thank Flag Link Wed Mar 11, 2009
Yes it is possible to buy a for sale by owner but I would highly advise not to. The number one reason is that you are considering purchasing what generally is going to be the largest purchase you'll ever make without counseling and advice from an expert. Most sellers you attempt to sell by owner have had realtors advise them on what they should list their home for. They have had market analysis presented to them and given advice on a possible selling price. You the buyer have seen no market comparsions and are just going off the pricing the seller is asking. The only one is going to save money is the seller. They choose not to use an expert because it would cost them money. The buyer gets all the advice and expert counseling from a Realtor at no cost to them. Why would any buyer not be represented by a Realtor. It's free expert counseling to them. In your case, let your realtor negotiate their commmission from the seller. Your realtor will get you the best price and terms. Good luck.
1 vote Thank Flag Link Wed Mar 11, 2009
Wow - sounds like a few of the below people are not big fans of real estate agents. You can of course make an offer and attempt to purchase the home on your own. Most good agents are very open to this as they want what is best for their client in the short and long run. Many FSBO's offer a commission to agents for the buyer as they need someone to guide both parties through the transaction. I have worked with a number of my buyers on FSBO homes and each time we have been able to secure items due to the sellers lack of knowledge on the process. Either way, it is your call and I wish you the best of luck. But please remember, there is a lot more to buying a home than just the price, a good agent will make it so you can get out of the contract in case something changes in your life and will protect your interests. I am sorry the couple answers below are not to high on my profession but the majority of us are very good at what we do and protect our clients and help them get the most out of the transaction.

Randall Sandin
843-209-9667
rsandin@carolinaone.com
1 vote Thank Flag Link Wed Mar 11, 2009
You can. He is "free" right. Just make an offer on your own and do not let them know. I decent RE lawyer can do it all in a matter of hours and save you (and the Seller) a ton if cash.

Now is a bad time to buy, but if you are do not let a Pro make it 3% worse.
1 vote Thank Flag Link Tue Mar 10, 2009
Depends on if you signed a Buyers Agency Agreement. If you did, contact your Realtor and they might be able to talk to the owner and see if they will pay a coop fee if she/he brings a buyer to them. It is then a win-win for everyone.
0 votes Thank Flag Link Tue Sep 24, 2013
Hi Caroline,

Well ... we'll just have to agree to disagree :-) I understand (wink, wink) your public internet response ... :-)

Csimmons - please let us know how this works out for you!
0 votes Thank Flag Link Sun Mar 15, 2009
Thank you, John you at least recognized that some of us do work very hard. But the one point you made about slipping some cash in an envelope is a blatant violation of our code of ethics. All compensation must be made to our broker. Agents then get a percentage of that amont. No cash in envelopes for ethical and hard working agents. Not if we want to keep our license. Thank you.
0 votes Thank Flag Link Sun Mar 15, 2009
Wow you have really stirred up the hornet's nest with this one.

A very good point that was said by a few is - if you SIGNED anything w/ your agent - then you need to check that. You may be obligated to XYZ. I don't know SC law so if you did sign something then you need to talk with your agent.

Ok - that aside - there's nothing in writing. Then you aren't "obligated to" but you may wish to compensate your agent for their time. If you've been working with someone for months, seen like 30 houses with them, etc - you are using their time and you may wish to consider providing them some compensation. I would probably not involve them in the sale as your Buyers agent. But that's me and I am NOT a first time home buyer - YOU are a first time home buyer. I don't know how SC works - in NJ we have real estate lawyers. So if you don't have an agent you WILL need a real estate lawyer *probably $700-850".

You can lookup all the SOLD comps you need - which you'll need to do. You can arrange for an inspector, get a real estate lawyer for the contract etc.

Certainly you'll want to pay something under market - it won't necessarily be 6% (just because there's no realtor doesn't mean all that "realtor money is automatically yours". Or it could be more if the seller is distressed.

Anyway, if I've been working with an agent, like them, and they've really been working hard to find me opportunities that are in alignment with my needs - and spending a bunch of time doing it ... yeah I'll slip them an envelope with cash after the transaction is complete - to say thanks and show that I do value their time.

Look at it this way - say the comission on that house is 5% - more typical than 6% these days. So the sellers agent gets 2.5% and the buyers agent gets 2.5% - BUT they only really get half of this and the rest goes to their office. So, let's say the house is $250,000 - your agent is looking at $3125 - if they are fully involved as the buyers or sellers agent.

So ... if you go direct ... think about all the hours your good agent that you like has invested working with you - attending to your needs, not being pushy, doing a good job. Consider putting a dollar figure on that and do what you think is the right thing to do.

Please keep in touch - it would be nice to hear what happens next - we rarely find out what happened afterwards here.
0 votes Thank Flag Link Sat Mar 14, 2009
No need for a Realtor. $200k house=$12,000 in your pocket.
0 votes Thank Flag Link Fri Mar 13, 2009
In California, if you signed BRE then you may have legal trouble from your agent.

My main point here is that some of buyers and sellers would like to save even just one penny for their future. Realtors' can help sellers save more than that even they may charge 3% of the price. At lease, 3% can be the consideration to help transactions going smooth without any trouble. On the buyer side, that is the same.

The FSBOs and self-buyers may lose more than 3% if they do not believe that.

Those realtors who can not perform like that, have no right to claim 3%.
0 votes Thank Flag Link Fri Mar 13, 2009
Yes. Just make an offer on your own. You will save 3%!
0 votes Thank Flag Link Fri Mar 13, 2009
It depends on your agreement with your agent. One thing to consider is how you know that the house is a good deal. If you know it's a good deal because your agent has showed you 20 other homes and you've had those to compare with, then you should be happy that you hired the agent and trust that the agent will continue to help you make the right decisions. If you have no agreement with the agent, then whatever decision you make is yours to make.
0 votes Thank Flag Link Thu Mar 12, 2009
What I mean is as far as mls and things an agent can do, a fsbo that is listed in mls through a flat fee or limited services brokerage is technically under contract. Ie. an agent cannot approach a seller who uses flat fee mls offering them their services, because even though it really is just the seller, technically they do have an agent that their house is listed with. Or at least that's how I understantd it.

Also, this might be different in other states, in MA you have to offer a compensation (of I think at least 2% ) or the listing will not show up (or something along those lines, I am forgetting the exact details) As such if a fsbo is listed in mls, they are offering a compensation to a buyer's agent, so there is no need to negotiate that point with the seller.
0 votes Thank Flag Link Thu Mar 12, 2009
I saw the first response was an anti Realtor person, and that's fine evryone is entitled to their "opinion" it doesn't mean it's right. When people say you will definitely save 3% or 6% whatever # you want to say the commission would have been, you are assuming that based on a sales price not what may have been the "best" price. Let's assume a buyer pays $100,000 for a home from a FSBO and doesn't have to pay a commision. Let's now assume a competent Realtor represents a buyer and could have negotiated the purchase price at $95,000.
The truth is a buyer doesn't pay commision, the seller does. A home is worth what it is worth regardless if it is listed or being sold by a FSBO. A buyer chooses to enlist the professional advice and expertise of a Realtor in order to save them money and headaches, and to make sure the transaction makes it through closing.
If you haven't already made an offer to the FSBO, my suggestion is to have your agent contact the FSBO and find out if they would be willing to sign a compensation agreement. Basically this is a form that says the seller agrees to pay the realtor a certain amount if the Realtor brings a buyer and writes an acceptable contract. Your Realtor gets paid for their past and future efforts to make sure you get the home you want, and you don't end up over paying for what you said is "the perfect home"
Don't think you are saving money by not using a buyer's agent in actuality you'll probably lose money, as the seller isn't going to just want to give you that extra money he's trying to save in commision, he's going to try to keep it himself. You'd end up paying the same price or more for the FSBO without having an agent by your side throughout the rest of the transaction.
0 votes Thank Flag Link Wed Mar 11, 2009
Csimmons,

The real issue is "procuring cause" meaning, did your agent "introduce" you to this FSBO listing? If so, and you have a contract, then your agent is due a commission if you buy, and could enforce the buyer contract. If he/she was not procuring cause, then the buyer contract might mean nothing if you decide to buy the FSBO home.

Consult with your attorney to be sure.

Good luck!
Web Reference: http://ctflatfee.com
0 votes Thank Flag Link Wed Mar 11, 2009
Talk to you ragent. How did you find this house? There are very few "real" for sale by owners today. If the house is listed in mls (through a flat fee service, ie. no listing agent) then the seller has agreed to pay a compensation to a buyer's agent 9as specified in the mls listing)

If it is a true fsbo where seller doesn't want to pay buyer's agent comission you have a few options. 1) Pay buyer's agent comission yourself, from your own pocket. Agent provides services, you pay, pretty simple.
2)Explain the situation to your agent (ie. seller not willing to pay comission, and you don't want to pay out of pocket) most likely your agent steps aside and you can deal with the seller on your own.

If you go with option 2 though don't forget to post on trulia about your horrible transaction, why first time home buyers should never buy from fsbo's and how paying your agent out of pocketwould save you many thousands. Real estate agents really enjoy stories like that, so please don't forget to post.
0 votes Thank Flag Link Wed Mar 11, 2009
Would you like to work for free? Even if you have not signed any paperwork with the agent you have been working with, the agent has invested time with you. You should at least discuss the property with your agent and discuss what your obligations are.

The people that have responded saying to do it on your own may have an axe to grind regarding agents. They may be trolls, or at the least have troll-like tendencies regarding agents. A good way to treat others in life is to treat them exactly like you would want to be treated. Think about what is the right thing to do, not what what anonymous posters on a internet forum advise you to do. They may just want to cause trouble or get a rise out of the agents on here.
0 votes Thank Flag Link Wed Mar 11, 2009
Yes you can! my realtor is a very nice lady now my friend I'm trying to buy a bigger house
I know if I find a FSBO at a good price she will understand. I'm searching every day on the internet but honestly the good deals are on the mls with the agents, foreclosures and especially REO. You can check the mls list on the internet most of the agents have their listing there.

Good luck!
0 votes Thank Flag Link Wed Mar 11, 2009
You have already gotten different perspectived on this question. It just goes to show - there are a lot of people out there who think real estate agents make too much money and don't work for their money.

If you would consider:
Letting your plumber perform brain surgery. . .
Letting your accountant fix your roof. . .
Let your pet wash your car . . .
Then you may want to consider buying a house without the expertise and guidance of a Realtor experienced in home purchases.

If you would take you car to a garage. After 3 months and extension restoration , your the car is totally repaired - you go after Midnight and use your extra set of keys to "steal - yes steal" the car back - then take the advice of the Wilmington, NC buyer/seller! I'm sure the garage doesn't have overhead, don't have a family, don't have power bills and the people there don't eat. I'm sure they don't need the money. If they needed to money, they would just sit at home, watch TV and draw unemployment, social security or disability like so many other people in this country!

There are good and bad in every profession just like there are good and bad people - PERIOD! You decide which one you are. If you have an agent that you are not satisfied they have the expertise to assist you, talk with their broker/manager and ask them to step in to correct the situation. Otherwise, if this person has spent their time searching for properties, taken the time to counsel you in the home buying process, etc - why would you even consider not paying them for their time.

Hopefully, this will wake up everyone - Buyers, Sellers and Realtors - to realize that we shouldn't work for FREE! Anything FREE is usually not worth anything! DUH!

You probably can tell - this has struck a cord with me! I dislike unethical and deceptive people. If that is you - then good luck to you. As we say here in the South - "what goes around, comes around."
0 votes Thank Flag Link Wed Mar 11, 2009
Unless you have a Buyer/Agent contract - Yes. You are in a business relationship and financial transaction not a friendship. In this situation my clients have offered me a 2% consultant fee which I thought was considerate. It showed that they valued my time. You should consider paying the 3% Buyers commission to your realtor to help protect your interests during the most difficult process of getting through the contract and settlement. Our expertise is not opening doors and driving people around. It really is about the paperwork, financing, inspections and making sure everything is handled after you find the right house. For Sale BY Owners are out to save their commission but they may not know the first thing about selling a home. Your realtor does.
0 votes Thank Flag Link Wed Mar 11, 2009
Ask yourself this question? Is this how I would want to be treated in this situation? I am sure your agent has spent a lot of time with you because you indicated they were good. There is more to our job than most people realize. Looking up the homes, scheduling the appointments, getting the route together and planning how much time in between each one not to mention the paperwork, negotiation strategy, pulling the comps so you get the best price, guiding you through the inpection and helping you get the best loan. Need I say more. Contrary to most belief you do earn your commission and it is not always as large as it looks as you have to split that with your company.
Best of luck to your agent!
0 votes Thank Flag Link Wed Mar 11, 2009
I hate to harp on this, but it's serious: you need to check the contract. An agency agreement is a legally-binding contract. How many contracts can you think of that you can just opt out of at any time without penalty? You may have options for getting out of your agency agreement, but you need to let your agent know what's going on, at least so he or she doesn't waste more time on your file.
Web Reference: http://www.chadmustin.com
0 votes Thank Flag Link Tue Mar 10, 2009
Check your agency agreement. Depending on the terms, your brokerage could be due a commission.

Just as an FYI, though, and in response to Palmetto Guy, we Realtors spend a lot of time and effort up-front with no guarantees of earning anything in return. So as a professional courtesy, if you don't intend to use your agent to purchase a home, then don't enlist the services of one in the first place.
Web Reference: http://www.chadmustin.com
0 votes Thank Flag Link Tue Mar 10, 2009
Yes. Not only "can" you but the REALTORS are "not" going to get anything.

Why should they get a cent? Remember when everyone said Buyer's agents were free? This is why - because they could not find a house for you at the right price.

They will get nothing and like.

Hope you are getting a great deal. I do know you just made 6% so be proud!
0 votes Thank Flag Link Tue Mar 10, 2009
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