Home Buying in Chicago>Question Details

Dlzb, Home Buyer in Chicago, IL

Who pays the buyers agent in a FSBO? Do you need to buy a FSBO without a buyers agent?

Asked by Dlzb, Chicago, IL Sat Mar 22, 2008

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Realestate Agents would like to have you believe that dealing with a for sale by owner is a difficult thing.

Did you happen to notice that All of these answers have been given by realestate agents?

Being that I have been a for sale by owner myself (several times) let me tell you that some of their statements are not very truthful.

All these Realtors are just looking to secure their 6% commission.

The best way to deal with a for sale by owner is to come WITHOUT AN AGENT.

For sale by owners are much more willing to negotiate and lower their price (even significantly) if they do not have to pay a middle man.

Inform yourself and come to the table ready to negotiate.
1 vote Thank Flag Link Fri Sep 25, 2009
Yes. We do want to get paid for our work.
Flag Tue Apr 5, 2016
Real Estate Laws and contracts change at least every six months and unless you are a full time practicing agent it is impossible to know all of your rights and legalities of an offer. "A man who is his own lawyer has a fool for a client," apply the same to practicing Real Estate when perhaps you have only bought and sold 2 or 3 homes in your entire lifetime.
The 6%???? There is no standard commission rate!
Flag Wed Dec 3, 2014
If the seller refuses to cooperate with a buyer's agent or pay a commission be very wary. The reason is that most FSBOs are overpriced or have other issues, or may have been on the market for years. You need representation in this situation more than ever. The other route is to pay a fee to your buyer's agent for advise, you could just discuss a reasonable fee. Good luck!
Web Reference: http://www.1sthomegroup.com
1 vote Thank Flag Link Tue Mar 25, 2008
This is a big fear tactic lie, just becuase a seller wants to sell FSBO doesn't mean there overpriced, or have issues, or have been on the market for years, it could very well be (Which is it) that maybe some of us just can't afford to pay closing costs with what we owe on our house! Thats it.
Flag Thu Feb 25, 2016
In Washington State, the Seller pays for the Buyer's Agent. Most of our FSBO's are savvy to that! Many of them indicate right on their flyers that they will pay a commission to an agent who brings them a Buyer.

I educate my Buyers to call me if they see a FSBO that looks interesting, so I can call the FSBO and find out if they are willing to work with an agent, and to pay a commission. If both of those answers are yes, then full steam ahead!

If the FSBO is willing to work with an agent but not pay the commission, I speak to my Buyers about adding the cost of the commission onto the purchase price, so they are actually financing my commission along with the purchase price. Usually a FSBO is willing to agree to pay the Buyer's Agent commission in that case. Of course, this is all agreed to in writing before the purchase.

If the FSBO is not willing to work with an agent, at all, I have a conversation with my Buyers about how to work with the FSBO on their own. They usually decide to keep looking at homes that have a listing agreement.
1 vote Thank Flag Link Sat Mar 22, 2008
Hi Dlzb - Payment of compensation to a buyers agent is not a given. The quick and simple answer to your question as to whether or not you need to buy an FSBO without a buyer's agent is no. If you feel you are knowledgeable about the process of purchasing real estate and have completed a few transactions before, you may not feel you need the assistance of a licensed agent. There are benefits to having an advocate represent your interests in negotiating, however.

If you are interested in purchasing a FSBO with the assistance of an agent, there are a few options you may want to consider. First, have your agent contact the FSBO and have them ask if they will cooperate with a realtor and pay a commission. Often times, as others have stated, FSBO's will cooperate and compensate a buyer's agent. Your agent will need to work out the arrangement with the FSBO prior to showing the property, ideally obtaining the agreement in writing - usually a single party listing agreement.

Second option is to enter into a buyers agency agreement with your buyers agent. The agreement will state the terms and length of service as well as specify compensation in the event that the buyers agent does not obtain compensation from the seller. With a buyers agency agreement in place, in the event that the agent did not work out a compensation agreement with the FSBO prior to showing you the property AND you purchase the property, the FSBO is under no prior obligation to compensate your agent. If the seller chooses not to compensate your agent, you as the buyer would be responsible to compensate your agent under the terms of your buyers agency agreement.

If no agreement is in place with either you as buyer or with the FSBO and you purchase the property, your buyers agent may not necessarily be compensated in the transaction.

I hope that helps! Best of luck in your search.
Web Reference: http://www.thomasjhall.com
0 votes Thank Flag Link Tue Mar 25, 2008
Dizb,
One way that I have worked out payment with a FSBO, (when I have Buyer Agency with my Buyer)- I ask the FSBO first if they would be interested in having a pre-qualied Buyer for their home.
This is usually followed by an ecstatic YES. I explain the compensation arrangement, and for the most part the Sellers are willing to pay for me to handle the closing arrangements.
When drafting the offer, we stipulate that the Seller will credit Buyer at closing the percentage for the Buyer's Agent expenses, and the Buyer pays me. Another way to do it is to reduce your offer by the percentage that you would need to pay your Buyer's Agent. Comes out the same....
I would highly recommend you have a Buyer's Agent represent you in whatever purchase transaction you do, especially a FSBO. Since alot of them really are unfamiliar with the process, and you will want someone watching out for your interests - The seller isn't going to do that for you.
All the Best.
Web Reference: http://www.GoPackerUp.com
0 votes Thank Flag Link Sat Mar 22, 2008
Usually the reason sellers sell "by owner" is so they don't have to pay an agent. If you are working with a realtor and you see a by owner you're interested in and feel uncomfortable approaching the seller, your agent may be willing to contact the seller and ask to be compensated by them. This may or may not work. I have sold some by owners and my clients never hesitated in reimbursing me my commission. Your realtor has the knowledge and exprience to handle the entire transaction from negotiating to closing. There are a ton of legalities involved which the sellers sometimes forget when selling by owner.
A lot of buyers don't know what radon is, let alone what to do when it comes up in a home inspection. That is a new law in Illinois now, that all sellers have to disclose if their home has ever had any.
Sorry, so long of an answer, but it's not easy to buy a home these days.
Web Reference: http://www.idamccarthy.com
0 votes Thank Flag Link Sat Mar 22, 2008
It really depends on what is agreed upon in a contract with the Seller. A lot of FSBOs will pay a co-op to the Buyer's agent, but do not assume this. Otherwise, the Buyer could pay the agent.
0 votes Thank Flag Link Sat Mar 22, 2008
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