If you think about it, the commission actually comes from the transaction. You as the seller agree to pay it, but the purchaser is also agreeing to pay it because they are paying you at closing what you (collectively) have agreed upon as a price. Included in that price is the commission. You could require that the Buyer's agent include the commission that they want to receive to be added to your asking price, but I doubt if many buyers would want to see your home if all of the other homes in the area are cheaper with commissions being honored in the asking price. Additionally, selling your home with a Buyer's agent reduces your liability as a seller. The Buyer's agent is held to a higher level of responsibilty when there is no other agent involved in the transaction. Also a Buyer's agent must treat you, a for sale by owner, honestly and fairly in all dealings. It is a win-win situation for all.

One thing I do feel is that the realtor should get paid. He or she has put in a lot of work on this transaction, and deserves to be compensated for that.
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I get the feeling you said a mouthful there. I'll bet that agent did a LOT of work on THIS transaction! :)

This is exactly the reason you hire a listing agent!! To explain these "small little details" .... We are real estate agents and we live, breath and sleep real estate.. just like you do your job. ----"Would you hire a dentist to fix your car?" - No, you'd hire a mechanic ---- Hire an agent, pay the commission and sell your house.. 3% or whatever it is, may be worth not getting into legal troubles later.

OK, so Erica............. I just have to ask......you have gotten a lot of great information here... ...what have you decided to do?

Please let us know how things turn out...........

Erica
One last point is that you do not have to sell to these buyers. You have very good information below, the problem is that none of them have read the paperwork.

The ONLY person who can really advise you needs to have read the documents associated with the transaction. If you did not agree to pay the agent a commission (in writing), then you don't have to pay.

Take the paperwork to a real estate attorney if you want legal advice. This is NOT legal advice.

However, almost all the posts below do a good job of explaining how the process works.

If it helps, you should know that in the general world of owners selling without professional representation, paying the buyer's agent a fee for handling the paperwork is not uncommon. The amount of the fee, either a percent of the sale price or a flat fee, would need to be negotiated in writing.

Before you cancel the sale you might want to see if you can re-negotiate so you can still move. Times are tough, they might be open to a compromise. One of the values of professional representation is that they are usually good a creating a win-win result that both side approve.

This topic seems to have been fully discussed, but ultimately it is a negotiable point. If you signed a "Permission to Show" agreement before the agent showed your home to her buyers (or at any time during this transaction so far), and if the Permission to Show stated that you would pay a 3% commission, then you are committed to pay the 3% commission.

However, if you did not sign anything that commits you to pay the commission then you are not obligated to do so. Usually when I am working with buyers and want to show them a home that is not listed by a realtor, I get the Permission to Show up front, so that is not an issue. Sometimes the sellers will add the 3% to the cost of the home. It is included in the purchase price.

In this situation, if you did not sign anything, you might still agree to pay part of the commission since you do want to sell your home and you are close to the closing date. In order not to lose this buyer, and to keep everyone happy you might negotiate with the agent to pay part of that 3% and see if she can collect the other part from the buyers. You might also see if you can add the cost to the price of the home, but if the property appraised for the lower original purchase price, the bank won't lend on the higher amount, so you may end up with the original purchase price and negotiating who is going to pay the commission.

One thing I do feel is that the realtor should get paid. He or she has put in a lot of work on this transaction, and deserves to be compensated for that.

Jeff......nice summation!

Your statement that "This is the very reason we did not list with an agent in the first place!", is a little ironic to me, given the fact that an agent is exactly what you need. Selling your home is no time to learn about contracts or the finer points of real estate transaction problems.

She doesn't have to list your property to earn a commission, nor does she have to have an agreement with you for a "one time listing", whatever that is. She could have presented you with a "one time permission to show", which is what I would present to a FSBO before I ever showed your property. It stipulates that you will pay me a commission if my buyer ends up closing a deal on your house. Without this commitment from you, again, I would have never brought a buyer to your house, unless the buyer agreed to pay me a commission.

If she did not present you with a one-time permission to show, then she simply took the chance that you would agree to pay the commision if the Buyer happend to want to make an offer. If she wrote in the offer to purchase, that the seller would be responsible for paying the agent's commision, then you're on the hook, and you should have known this ahead of time because you should have read the contract.

However, if you did not agree to pay the commision (i.e. It wasn't in the offer, which my bet is it was) then the only way you would be responsible is if you signed the one time permission to show, which stipulated that you would pay a commission if her buyer bought the property.

Also, and this is not a minor point. Real Estate agents are not attorneys (at least not generally), and thus we do not get paid for "doing paperwork." That would be the unauthorized practice of law, which we don't do. Real Estate agents get paid for bringing buyers and sellers together, which is exactly what she did.

Remember, you were free to let the agent and her client go on their merry way. Of course, you would not be selling your house now, but you still had that option.

p.s. The reason you are paying closing costs is because you agreed to pay them in the contract. The title company didn't just decide to charge you for the heck of it.

Best of Luck!

Stacy, the purpose of my response was to be helpful................stating, as you did, that a specific % is the "rule of thumb"......is inappropriate, in my opinion.

Here is an excerpt from one (of many) articles published on the subject of anti- trust laws, and agents discussing commissions, especially in public -

"Agents and brokers in any setting, business or social, should take great care to never even discuss commission rates in any context. It's much better to be safe than sorry in this case."
"Never use the word "standard" or "prevailing" when describing your fees and services"

(I suspect "rule of thumb" would fall into that category, too)

When in doubt, I choose to air on the side of caution.

It's your prerogative to post whatever you choose. I wasn't trying to lecture..... just to be hepful.
This topic has been discussed a lot here on trulia....
I thought it might add some value here................it's certainly your right to disagree.

And on that note..since it's off topic...I will wish everyone a pleasant evening....

Debbie,

I am not sure the purpose of your answer...

I clearly said commissions vary... 6% (3% + 3%) was used as an expample to help the Seller understand the situation... since she noted that the Selling Agent was due a 3% commission it makes sense that the other side would be paid 3%.... of course, commissions VARY... but maybe you missed that in my answer.

If you are going to offer answers on top of multiple other answers, make sure it adds value...

Just as an aside............"Commissions vary, but 6% is a pretty solid rule-of-thumb throughout the country. The Listing Broker is usually paid 3% to market the house".............
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My goodness............... all commissions are negotiable.!!!!!......there is no such thing, legally, as "standard" or "usual".or "rule of thumb throughout the country"" ........it is against the Sherman anti trust laws to suggest such a thing..........be very careful when making these kind of statements, especially in a public forum!
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Erica...just out of curiosity.....did you think the agent brought in her buyers and a sales contract out of the goodness of her heart?
Did it not occur to you that she was going to be paid in some way? Didn't you wonder about that?
I am sure if you look, you will find verbiage addressing that in the contract.

Erica Simon,
I am not sure how things work in AR, but in Illinois for example if a buyers agent, i.e. a Realtor who is working with a buyer is showing a home of a seller who is selling by owner, without an agent/brokerage company, the showing agent/buyers agent, should and will here in Illinois, ask the seller if they are cooperating with a buyers agent who is bringing them a ready and willing buyer and if that buyer ends up closing on the property and an agreement is signed by the Seller before showing the property to the buyer, that will say that the seller at closing will pay the Buyers Agent/ Brokerage company a commission of 2.5 3 etc. % of the sale price as
commission, which would be still only kind of half or so of the commission a Seller would pay if they list their property with a brokerage company/Selling Agent/ Listing Agent....
Does that make any sense? So I am not sure if you signed anything on your contract that states that you
owe the buyers agent/brokerage company that brought you the buyer a commission. check you contract and all papers you signed, and consult with your attorney.

Hope this helps!
Edith Karoline YourRealtor4Life! and Your Larger Chicagoland and Northern Illinois Connection...
Working always in the very BEST interest of her clients....
EdithSellsHomes@gmail.cm

Erica, you are paying the commission out of the money the buyer is bringing. Of course it should have been pointed out to you that the deal was so much for the house with a check to be written for $x out of that amount. I don't know if AZ uses attorneys for closings, but I would have to think that if you have no agent you MUST have had someone review your contracts. Do you have an attorney? As for the closing costs, that must have been part of your negotiation. As it is, even if you see this as you paying the commission, you're paying as much as half what you'd been paying had you been listed, and there was someone (the agent) moving the transaction along.

Ericasimon,

As I have found out, things are handled differently from state to state but the general perception is that the commission is paid out of the seller's proceeds. I say perception because the way some people see it is that the buyer hands over the money to the seller (without the buyer's money there would be no transaction obviously) and both parties understand that the commission is going to come out of that money.

I think what the buyer's agent did wrong was not discuss this with you ahead of time and make it part of the contract. As a professional who knew she was dealing with a non-agent, I believe that the responsibility was with her to make clear to you how she expected to be paid.

By the way, if 3% was all you had to pay for a quick and seemingly painless closing, you got a bargain.

Actually - sellers have not "always paid the commission."
As with any other contract, compensation is negotiable.
And if the agent failed to get the commission agreed to by the seller in writing, the real estate firm is more than likely SOL unless they have it in writing that their buyer will pay.

I have had buyer clients in exclusive buyer brokerage agreements who paid my firm directly and the commission was not paid out of the seller proceeds. The buyer's agent should make every possible effort to get the seller to pay the commission (because as Guy states, the buyer's agent is working for the buyer). I have had instances where the buyer sees new construction that's appealing and the builder wouldn't co-op, so the buyer declines to purchase from that builder rather than be liable for paying the commission out of pocket.

However, sometimes....you'll run into a seller who will not pay and a buyer who wants that house and that house only. And so...the commission has to come from the buyer.

Don't see that much anymore but it was fairly common in the boom time with FSBOs and especially stubborn home builders who would not work with agents. How time changes things! Now, it seems most sellers will jump at the chance to pay to have someone bring them a qualified buyer who can actually close!

Seller have always paid the commission

In executed contract should state this

Seller hire realtors whether be listing / buyers agent represent, market, qualify, legal documents required close a sales transaction.

If you were not going to pay realtor you should have disclosed that when she presented a client purchase home.

Most don't understand expense requires to be a realtor, we are not paid by corporate America.

From State dues, yearly course, MLS dues, broker fees, advertising, car, websites, phones, e & o insurance, gas, other insurance, list over 50 items I can continue. I have completed a time study from point I say Hello through close I may have from 50 to 100 hours vested in that client less expenses.

... all these fees out of our back pocket.

Net net for agent is than 3%

How would have sold home w/o agent brought buyer to you ... did you know how qualify buyer, sales contracts, legal issues of property owner must sale a home within guidelines of state if you don't you can be sued by state.

When you purchased the home and NEXT home buyers agent is paid by seller.

National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
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Lynn911

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Who just told you now that were having to pay her 3% commission?
The agent? The lender? Your lawyer? The title/escrow company?

Does she have something in writing from you stating that you will pay her firm a commission at closing and what that amount would be? Was there language in the purchase contract addressing this?

If she has something in writing from her buyers stating they would pay her a commission to find a house, they may be liable to pay if she didn't address the issue of having you include the compensation in the negotiated sales price. Odds are good the lender will not let them raise the sale price of the house to include that compensation at this late date, which could cause the buyers to attempt to walk if they realize they might be on the hook for the commission after the closing.

Discuss with your attorney. If you don't have an attorney, get one.
You might also consider contacting her managing broker or company owner at the real estate company to make them aware of the situation.

I would review the contract thoroughly to make sure the agent did not insert language that obligated you to pay her fees. Remember, she represents the buyer and it's her job to get you to pay the fees so her buyer doesn't have to incur that cost. If she did insert specific fee agreement language and you failed to catch it, you may be obligated to pay her commission.

Review your documents carefully to clearly understand your obligations under the contract.

That is correct, we do not have an agent. This agent just happend to be driving through our neighborhood and her client liked our house so they asked if they could take a tour. I said yes because I didn't see any reason not to let them in. They came back the next day with the client's husband and she brought a contract. Nothing was ever said about a one-time listing and she specifically told us we were signing something that stated the property was not listed with the agency. Now it is my understanding that we are paying her 3% commission and the buyers are paying no commission. Why do we have to pay all the commission and closing costs? This is the very reason we did not list with an agent in the first place!

You don't have to pay any commission unless you and the agent have a signed agreement stating you will pay her commission.

If you did sign an agreement to pay the agent, then you should honor that agreement. If you're not sure if you agreed to pay the commission, ask the agent to provide you evidence that you did in fact agree to pay her. If she doesn't produce the agreement, you will likely not be obligated to pay any commission. If neither you or the buyer agree to pay the agent fees, the purchase/sale may fall off.

Personally I would not pay unless I had a written agreement to pay.

Erica, your house is not listed, therefore you have no agent, correct?

When the buyer's agent submitted her client's offer to you, she should have (and she may have) worded it so that you would understand that her fee was part of their purchase price. The buyer is including the agent's fee in their purchase price. You do want to sell your house, correct? And this agent brought the buyer, correct?