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.
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.
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
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.
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.
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.
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.
Now is a bad time to buy, but if you are do not let a Pro make it 3% worse.
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.
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%.
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.
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.
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.
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.
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.
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.
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."
Best of luck to your agent!
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.
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!