Home Buying in 98105>Question Details

Matt, Home Buyer in 92064

If a buyer is working with an agent to buy a home that is for sale by owner, who pays the agent's commision?

Asked by Matt, 92064 Thu May 14, 2009

We are considering a home that is for sale by owner in the Seattle area. I know that typically, the agent's commission is paid by the seller, but have heard that this is not always the case in a home that is for sale by owner.

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It depends on the seller and becomes a point of negotiation. There are a number of ways to handle this situation and should be discussed with your agent prior to falling in love with a home :)

Maggie Weissman
Managing Broker
Windermere Real Estate Co
0 votes Thank Flag Link Thu Sep 15, 2011
Hi Matt - The simple answer is most sellers will pay for your buyer's agent. You can always write it into the contract as well and account for it in price. It is just some simple language in the contract. Let me know if you need help on the details of that.
Web Reference: http://www.cooperjacobs.com
0 votes Thank Flag Link Sat May 16, 2009
Are there agents? If theres no listing or buyer agency agreement (which you've not mentioned) no one pays commission unless someone enters into an agreement - and then the hiring person would pay.... unless it was negotiated otherwise.
0 votes Thank Flag Link Fri May 15, 2009
If it is a FSBO and you found it yourself I would try to pay as little commission as possible and focus on getting the best price. In my opinion paying over 1% on any transaction is high. I know alot of agents will have an issue with this, but buying and selling a home is just not that difficult.
Web Reference: http://www.shopprop.com
0 votes Thank Flag Link Fri May 15, 2009
Selling a home FSBO is a difficult prospect. The seller is trying to save some money by doing the marketing themselves. They tend to get a lot less activity then homes listed with an agent. So if they get a legitimate offer from you and your agent there should be no problem negotiating that the seller pay the comission. They may play hardball and refuse to pay the comission, but trust me, stick to your guns. They will cave. There is no way you should be paying a comission.

Good Luck.
0 votes Thank Flag Link Fri May 15, 2009
Hi Matt,

Often on my Buyer Agency agreement, I indicate that the commission will be 4% if "Unrepresented Seller" commonly known as a FSBO. I will negotiate with the Seller FSBO to have them pay the commission. The value of having an agent on one side should be evident to the Seller FSBO too.

Good luck. Hope your agent negotiates strongly on your behalf. Have your agent call me if they don't understand how this is done, I walk them through the process.

Gary 206-696-2329
0 votes Thank Flag Link Thu May 14, 2009

The details will be within your contract either between the buyer and the Real Estate Agent OR within the actual contract with the SELLER. On the contracts that I have written up for a buyer who buys a for sale by owner I will place verbiage on the Form 41C which states how that commissioned will be paid by the SELLER. If however you signed a Buyers Rep agreement then you will be responsible to pay whatever commission the seller does not agree to pay.

You will need to talk with your agent before signing any contracts on exactly how the commission will be handled.

Hope this helps,
Bryan R. Lovell
Web Reference: http://www.homelantern.com
0 votes Thank Flag Link Thu May 14, 2009
Hi Matt, I would have your agent negotiate with the seller in advance of putting in an offer to see if they would be willing to work with (and pay) buyer's agents. You'll find that many will and most should understand that you have a loyalty to making sure that your agent gets paid. After all if your like many of my buyers, you have been looking together with your agent for months and months or even years...I am not saying any names:). If you find a seller not willing to play ball, then perhaps negotiate wrapping the commissions into the selling price at closing. There are many options if that is truly the house you are considering. I would definitely have your agent get on the horn and give those sellers a call.
Web Reference: http://www.LiveGreenNW.com
0 votes Thank Flag Link Thu May 14, 2009
You have it correct. Typically the seller will pay a buyer's agent commission. But on the chance that the seller is not on board, then the commission can become the responsibility of the buyer. It all depends on whether you have an Exclusive Buyer's Agreement in place. If there is no such agreement between you and your agent and the seller refuses to pay a commission, you can negotiate a sales price that addresses the commission payment. Even if you need to cover the commission at least you'll have an agent looking out for your best interest. Can't say as much for the seller.
0 votes Thank Flag Link Thu May 14, 2009
The commission can get paid two ways. One being that the buyer's agent writes into the P&S agreeement that the Seller will pay their commission as a percentage from the purchase price or a flat fee. If the seller is not agreeable to pay a commission to the buyer's agent, then the second would be the buyer pays the agreed commission out of their pocket on top of the purchase of the home.

Typically, as an agent working with a buyer, there should be a buyer's agency agreement with the client which spells out the details of how the commission will be paid in the event of working with a FSBO or other non-MLS listed property.

I hope this helps. Please feel free to e-mail or call should you need anything else. I have a copy of a typical buyer's agency agreement I can send you if this is something you would like to see.

Best Regards,
Brian Marshall
0 votes Thank Flag Link Thu May 14, 2009
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