Hi Diana,
Since I am located within a short distance from the zip code shown for you, I decided to respond with an answer to your question. You can easily find me about 20 minutes down the road if you want to discuss your situation further.
My opinion is that the real estate industry is one that varies from one area to another but typically in our market, if you are selling your home yourself and without the assistance of a real estate agent, you can decide if you want to work with a buyer agent. By this we mean will you pay the buyer agent's fee. This is generally confirmed prior to an agent showing your home. Each agent that shows your home should provide a form for you to sign prior to the showing which establishes the agreed upon commission payable at closing as well as it also addresses the buyers they are showing to and agency. Agency is very important since an explanation of agency allows you to understand when and to whom you should disclose confidential information. Disclosure of your confidential information to an agent representing only the buyer could affect your negotiations in a negative way so it is recommended to thoroughly understand this since you may be involved in a transaction with a trained agent on the opposite side. Unless you have agreed to pay a commission, you are not obligated, however, most agents will not show your home unless they have an agreement with you to pay it or their buyer has agreed to take that responsibilty. Some buyers want representation even if you are not willing to pay the buyer agent's fee so they agree to negotiate the fee in advance of viewing the home. All fees are negotiable and are not set by anyone other than the seller and agent or the buyer and agent. There are times when the fee is to be paid by the buyer and the buyer needs that amount to be included in with their mortgage. We typically see this amount then added to the sales price and paid at closing. It does still show on the Settlement statement that the fee is being paid by the seller but the price of the home has been adjusted to include that amount. The home does need to appraise for this new sales price in order for it to be included.
There are so many other details that we as agents are trained to use in the representation of our clients. Certainly one can sell their home themselves if they have the time to meet buyers, they understand the ins and outs of this undertaking and that it is difficult for buyers to be up front with the owner. Buyers sometimes unintentionally lead a seller on by saying we will call you back when really they have no intention to do so because the home didn't work for them. It can be a very frustrating undertaking but it can be done with a lot of patience and research. I wish you the best of luck but if you find that it is not working for you or you feel you are ready for an expert to take over...or even just a shoulder...give me a call! I AM right down the road from you.
jane@janebartlettrealestate.com

Diana
You have some very interesting posts here that should help you.
The facts are the most owners who need to sell eventually hire an agent. Only about 10% homes nationwide sell without an agent, and when they do, they typically sell, on average, for about 16% less (NAR Survey).

However, you do have a 10% chance to sell.

You bring up buyer's agents, and that is a wise move. A CAR survey shows that 90% of the time the buyer is brought by an agent.

A couple of points (just speaking for me).
1. I only work with serious buyers.
2. I would be happy to work with an owner selling without representation, however, this is a buyer's market. So all things being equal, in most cases my buyer will never find your house. If they do find it, (my experience) is that most homes like yours are over-priced.
3. If my buyer did decide he wanted to see the property, BEFORE I showed it we would have a discussion about commission. From the Realtor's point of view, you are asking me to do twice the work for the same pay. Represent BOTH side, incur all the liability ( and expense associated with that. For example, in my office, PER TRANSACTION, we pay at $650 Errors and Omissions Insurance premium). My broker get 30%, so by the time all is said and done, you are asking for a lot more work for only a little bit more money.

The chances are that my buyer will buy a home listed by a Realtor, I will be paid fairly for my services, and your home will not sell.

However, I think you should try it. I would also suggest interviewing three Realtors, and then if your plans change you can make your next move.

Best of luck to youl

Hi Diana, just a little added information. Many many for sale by owners in my area, when advertising their property for sale by owner they more often than not indicate that they are ready and willing to cooperate with Realtors who bring buyers to show their property if and when the showing leads to a contract/sale/closing.

The % of commission is an agreement between you the seller and the Realtor/Brokerage who is bringing in the Buyer..... More often than not the % the buyers agent and his brokerage company would normally receive if and when a property is listed with another brokerage company. You the for sale by owner/seller will save the part of the commission that would otherwise go to listing agent and his / her brokerage company!

And yes the other answers are all right, the agent for the buyer will want you to sign an agreement that will state the buyer and the commissiion you the seller will owe to the buyers agent and his / her brokerage company if and when that buyer buyes your property and closes on it.....

Good Luck to you!
Edith edithsellshomes@gmail.com

Diana,

It is customary for the seller to pay for the professional services associated with a sale. If an agent brings you a potential buyer, there should be an upfront agreement regarding the fees associated with a successful transaction.

Most agents will expect their normal transaction fee, normally in the range of 3-4 percent of the sale price.

Important to note is tha fact that in a normal transaction there are two agents that share the closing responsibilities. In a transaction involving a FSBO the agent will be handling the total sale responsibility. You can hardly expect them to be happy about doing all of the work and recieve less compensation.

Good luck

Diana, if the buyer came to you, through the efforts of their "buyer's agent", and they decide to purchase your home, wouldn't you be willing to pay a commission (to be negotiated) in order to facilitate that deal?

The amount you'd pay that agent, would have to be negotiated, and usually the agent will approach you BEFORE he shows the property to his client. You can determine whether you'll agree to pay nothing (in which case the buyer's agent will likely not SHOW your home to his client)... or something more. If you come to agreement at (let's say for example 2%)... the agent will have you sign an agreement stating that if his client buys your home, you agree to pay his agency 2% of the purchase price.

If, on the other hand, the buyer found your home on his own, viewed it... liked it, and THEN wanted to bring a buyer's agent into the mix... then I agree with vhb_s (great name)... the buyer should pay the buyer's agent fee himself.

In North Carolina, all real-estate contracts, including commission agreements, must be in writing.

Hi Diana,

You get to decide what commission you wish to offer the Buyer's Agent, you have no obligation (contract) to them. However, if you decide to nix paying an outright commission (any agreement should be in writing), acouple things could happen--the Buyer could decide to take a pass and not proceed; or, the Buyer's offer will now take into account the commission they will have to pay their agent, and therefore your offer may be lower. One way or another, if a real estate professional is involved, their commission will end up coming out of the deal. The bottom line is--if you know what your house is worth in the current market, and if you get your price out of the arrangement--take the money and run! (especially in this market).

First, put every agreement in writing so there are no questions to answers like this.

In general, based on standard contracts, you are obligated to pay a buyers agent a commission when the agent brings you a willing and able buyer that meets all the criteria of your offer to sell, as outlined in your "commission agreement contract".

The commission amount is negociable, but ranges from 0 to 3%.

The arrangment a buyer's agent has with a buyer may include a fee or commission. This is not the norm, but it can take place.

Diana, I take the hard nose position. If the buyer wants an agent then the buyer can pay for one. Herb

Diana,

In spite of the pro agent speak, I think that the agents overall have given you good answers on the commission question as well they should have. I would just like to add that if you are doing a FSBO, the blog attached to the link below may be of some interest to you.

http://www.trulia.com/blog/rockinblu/2008/08/thinking_about_…

Typically, the realtor does not earn a commission from the buyer. As a For Sale By Owner, you decide what the percentage you pay and how it works. I'm sure this varies from State to State and maybe some communities but a typical buyer's agent commission is approximately 3% of the sales price (other areas may differ!). If you wish not to pay the agent representing the buyer interested in purchasing your home, you may miss out on great opportunities for your home to be shown by very qualified professionals with QUALIFIED BUYERS. There are plenty of homes on the market right now.

Another point I might bring up to you...who is paying for your advertising? Are you in your local MLS system? Who is holding your home open and showing your property? With a professional, these are paid for! A lock box is placed on your property so other professionals can show your property while you are at work/unable to be at the home?

What kind of exposure are you getting for your property by listing it yourself? How much is it costing you to list with a "limited representative" or internet real estate firm. Are they placing ads in your local housing magazines and paper? Do they have a network of many cooperating real estate professionals to work with? Can your home be shown while you are at work? or do you need to be there?

Limitations are placed on the advertising and availability to market your home when you list it For Sale By Owner. I'm not saying it's not successful because I know of many success stories out there...in the "boom" market of 2005...Will you be able to qualify your buyers or will you go "under contract" only to find that they don't qualify for a loan for the purchase price you agreed upon?

What about the negotiations? Home and termite Inspections? Legal issues? These also mount up not only in dollars but time?

Isn't it worth it to have a fully qualified Realtor list and market your home for you? Your chances of negotiating a higher price (and covering that "commission" far outway the stress, time, effort of trying to do it on your own!).

Rather than question this, interview agents and see what "shakes out"! It might be worth your time and energy (and money!).

Diana,

The commission you offer and/or pay is up to you to decide. In a buyers market, as we are currently in, it is best to offer a competative commission for buyers agents to show your home as a for sale by owner. You can decide on a percentage or flat fee that you are willing to offer, most MLS listings offer a buyers agent 3% for residential resale. Realtors can recieve commissions from the buyer, typically this would be an agent requiring a certain percentage of commission and the buyers making up the difference if the seller is not offering that whole amount. In our current market however, that senario is rare. Let me know if I can be of furthur assistance. Good luck!

Jason Ewing, GRI/CNS
Coldwell Banker Triad, Realtors

I concur with Ellen's answer and will only add that from a business perspective it is usually in your best interest to agree to pay the buyer's agent a reasonable commission in order to encourage him or her to introduce your property to their buyer and attempt to negotiate a sale. Most buyers understand that the majority of homes for sale are listed. They also understand that in order to gain entry into those homes they need to work with the listing agent, or their own buyer's agent. Most of the time that real estate professional will have already "qualified" the buyer and your deal will have a better chance of actually closing. On your own you will receive inquiries from alot of tire kickers and unqualified buyers "hoping" and "dreaming". Good luck.

If you are selling your home by owner, there is no set commission. Most people who sell by owner and agree to have a buyer's agent represent the purchaser usually pay a 3% commission. The realtor does not earn a commission from buyer unless there is a minimum fee required by buyer's agent that is agreed on. For example you only offer 2%, but the buyer's agent's fee is 3%, the purchaser may agree to pay the additional 1%. It depends if the buyer is willing to pay the difference, or broker agrees to take less.