Home Selling in 71226>Question Details

Tanya Willhi…, Home Seller in Jackson Parish, Loui...

Can a realtor charge a 3% commission if my house is for sale by owner?

Asked by Tanya Willhite, Jackson Parish, Louisiana Fri Apr 18, 2008

I have paid for my own advertising and brochures. A man got a brochure out of my tube on my sign. Called for an appointment. His realtor found out and called me wanting a 3% commission for one time showing. Is this unethical? She did not find the client for me? I told her no. The man broke his appointment. No show.

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Tanya,
It is not unethical for the realtor to ask for a commission on a home that is FSBO. Just as you have spent money and time on the selling side of your home, this buyer's agent has probably spent hours with this client looking for a home. I am sure the realtor has a buyer's agency contract with the buyer that stipulates that she will be paid at the time of closing by the selling agent, which in this case is you. Also, this agent will end up writing the contract, overseeing inspections, etc. for the transaction since she is the only Realtor involved. All this being said, commissions are negotiable and if you really want to sell your house then you might be able to reach some agreement with the agent on a fee/commission. As Realtors, we always asked if someone is working with a realtor, even if they call us direct. That can prevent the situation that you are now experiencing. It might be a question that you will want to ask in the future, too. I hope it all works out and you sell your home quickly.
1 vote Thank Flag Link Fri Apr 18, 2008
Glen brought up an interesting point... You can get someone to help you with the paperwork and other sale related issues for a flat fee potentially saving money. Not offering compensation to a buyer's broker may limit your buying pool. There is something about activity on a property for sale that motivates prospective buyers to offer MORE!

Every property I have sold personally has been placed on the listing service and I have offered compensation to a buyer broker. Reason being is I want maximum exposure and I do not want to limit my buying pool in any way. You may actually be pleasantly surprised to find what paying a small brokerage commission might actually do for you in terms of a return.

There are some brokerage companies that offer ENTRY ONLY services to the MLS for a flat fee. Look into them. Then the only thing you should consider doing is offering a nominal buyer broker fee. This is payable if, and only if, they get you what you are seeking.
2 votes Thank Flag Link Wed Feb 24, 2010
No, there is nothing unethical about this. In many instances, buyer's invoke the assistance of a buyer broker and buyer brokers are typically paid through a commission offered through the seller of a property and a listing agent (seller's agent). You however can negotiate any offer of compensation. My guess is, if you offer a lesser amount, you may be able to get what you are seeking--getting your home sold.
2 votes Thank Flag Link Wed Feb 24, 2010
Read the fine print!

From your suggested site,

"Our minimum fee is $5,500. If the commission we get from the seller is less than $11,000, we still keep $5,500 and refund you the rest.

If the commission is less than $5,500, Redfin will support the offer only if the list price is over $175,000. In these cases, Redfin will keep the full commission with no additional fees from you. "

on a $100,000 house, the minimum charge to the buyer is $5500.00 or 5.5%

LOL Oh my ,oh my

Stick with ebay dude, let real agents sell houses!
2 votes Thank Flag Link Mon Jan 19, 2009
Tanya, I had similar thing. Realtor calls me says" I have a buyer who handed me your brochure and wants to see your home" 3 percent com. The buyer was doing the right thing since he was already working with realtor. I think we need to remember the big picture is we need to sell the house and I certainly don't want to upset the entire Realtor community as they have most of the buyers! I just choose my battles! Besides the buyer is going to pay more because I am thinking what the bottom number is. Sooooo if I can advertise it at they can bring me a buyer, do the paper work, help buyer feel warm and fuzzy and get me to closing, for 3%, then I am happy,
1 vote Thank Flag Link Tue Dec 13, 2011
Tanya, the answer is yes and no. The realtor can request the commission and you can say no. Or you can say yes. The choice is yours. You seem to be under a common mis-understanding however. You seem to think the realtors' only job is to show your home to their client. There is so much more to bringing a transaction to the closing table and buyers, especially first time buyers, often want to work with a realtor for that very reason. The realtor assists the buyer in negotiating the terms, they are there during home inspection and help the buyer to determine what isssues raised during a home inspection are critical and which are not. I think lf realtors as an orchestra leader, they watch over the entire process, from contract negotiations, home inspection, title search, mortgage commitment and on and on whenever there is an issue it is the realtor who acts as the 'problem solver'. So, if a buyer has decided to use a reatlor to help them navigate the process, in my opinion they have made a wise decision. Were you to list your home for sale with a seller's agent, that agent would do the same for you. And if you do not wish to pay a reator for all the work they do on behalf of that buyer or for yourself that is entire ly up to you. But please remember, it is a lot of work and, personally, I think it's a bargain.
1 vote Thank Flag Link Tue Dec 13, 2011
There is nothing unethical about the agent requesting a commission. Someone made the comment about how could an agent take a commission in this economy. People do not work for free. Would you?

There are many potential issues that could come up during the escrow period. Are you able to handle those issues? How did you determine the price on your home? Will it appraise out at the price you are asking for it?

As a buyer, I would not purchase a home without the assistance of an agent. This is a major purchase.

You can always negotiate a commission too. Someone else suggested that you hire an attorney. Attorneys do not work for free. For something like this there would most likely be a retainer. Those hours add up quickly. Every minute of every phone call costs you money. Every hour spent reviewing documents costs you money. You might be suprised to find out how expensive it can be.

There are various ways to work out the commission. Possibly the buyer will be willing to pay but I doubt it. Most would just move on to another home. My adivce is to not be penny wise and pound foolish.

Real Estate is a business. I am not sure why anyone would question why an agent should get paid for their work, regardless of the economy.
1 vote Thank Flag Link Sat Jun 12, 2010
Tanya
over 85% of sellers eventually list with a Realtor. 5% sell direct, and 10% give up. If you goal is to sell for top dollar, then I strongly suggest that you at least interview some Realtors.

In my market I can afford to be choosy on which properties I show my buyers. I tell them upfront that I work on commission, and if they want to buy a home listed by the owner, I still need to be paid. The problem you have is that you want a Realtor to work both sides of the transaction for half the normal fee. Personally my time is too valuable.

How would you like it if your boss told you you had a new project, but he could only afford to pay you half your normal wages?
1 vote Thank Flag Link Fri Apr 18, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
If the Realtor disclosed they were a Realtor, brought you the client..all it takes is one time and one client, and then there is nothing wrong with the Realtor requesting a 3% commission.

On the Realtor's end, they could be working for that buyer for quite a while, and so if you agree to paying a 3% commission for them bringing a willing and able(has the ability to get a loan) client, one can justify the commission.

Unfortunately, in some areas a friend of a friend may be a sideline Realtor, who shows up at the closing table and claim to represent the buyer and want a check. If this is the case, send them packing.

If this Realtor however had a genuine interest and is enabling the buyer to get a loan, work the insurance issues, help with inspections, writing a purchase agreement, helping with due diligence, and makes sure you as a seller have completed accurately a disclosure on the property of all its faults and possible issues, etc. then it would be worth it to you to only pay 3% commission instead of the usual, (for our area) of 6%.
Web Reference: http://iansellsnola.com
1 vote Thank Flag Link Fri Apr 18, 2008
Representation seems important enough for the Buyer to want. If you want to sell your house, factor in the 3% or try to negotiate downward with the Agent. "If" that Agent/Buyer is qualified, is it time to be that hardheaded about selling your home. Need to save the 2 1/2-3% that badly be a good negotiator and factor that in as well.
0 votes Thank Flag Link Tue May 15, 2012
Yes, A Realtor, representing HER client, can ask you to pay any amount of money to close the deal.

You said no to the Realtor and HER Buyer went elsewhere!

Question is, do you want to sell your home or not? Personally, I'd call that Realtor and try to get "HER CLIENT" back.

You do have a choice, you can either continue to pay your mortgage, month after month paying far more that 3%, or you can work with a Realtor and sell your home now!

Answer should be easy!
0 votes Thank Flag Link Tue May 15, 2012
The simple answer I think is the buyer will need to pay that commission. You've done your work, now it is the buying agent's job to earn her money by closing the deal. I disagree with the posts below, the real estate agent does not get a commission from you because she has spent hours with this client, etc. what does that have to do with you selling your house? Not a thing. I would make it clear your asking price and any commissions are to be paid by the buyer and not included in the ask price. Granted, if you want to sell, I would call up the agent and try to work something out, but that is just me...
0 votes Thank Flag Link Tue May 15, 2012
So what if you find your own buyer which your listing agent has not- do you still pay the full commission?
0 votes Thank Flag Link Tue May 15, 2012
Dear Tanya,
Often with FSBO properties, the owners offer a commission to the agent bringing the buyer to them. Most homes are sold by Agents working with buyers.
If the owner refuses then the client will be responsible to cover commissions to their agent. I assume he did not want to do this and so cancelled his showing of your property. There is nothing unethical about this, it's just business. So far I haven't met anyone who wants to work without being paid.
0 votes Thank Flag Link Tue Dec 13, 2011
3% Commission? Yeah, Right!!! The day the Pope is Protestant!
Commissions are not set by any law, only by real estate brokers, etc.
0 votes Thank Flag Link Tue Dec 13, 2011
Yes an agent can .

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Thu Mar 24, 2011
I, too, have noticed that mostly realtors are answering this question and trying to convince you to pay their commission. I find it interesting that in the current economy any realtor would require a commission. Perhaps you should look for someone to help you on the buyer's side who would work for a flat fee. The paperwork done by the realtor can be handled by a real estate attorney for a set hourly rate. I'm pretty sure no realtor is willing to work for an hourly rate. That would also save you $$.
0 votes Thank Flag Link Wed Feb 24, 2010
Please notice that all other people answering this question are "real estate pros." They have a vested interest in keeping the rate as high as possible. In this market, realtors are hurting even worse than home owners. In that type of climate they should be willing to accept a lower price to be competitive with the other starving realtors. If they won't I suggest using a site that understands market principles (supply and demand) like http://www.redfin.com. (Note: I am not associated with that website)
Web Reference: http://www.redfin.com
0 votes Thank Flag Link Mon Jan 19, 2009
Tanya,
One other problem you might not realize is that in an exclusive buyers agency agreement will specify that the buyers agent is going to be paid a commission and that if you do not pay then the buyer may have to pay out of his own pocket. So by your refusing to pay the realtor a commission then you are putting it on the buyer to pay so he elected to not pursue your home. So just as some questions on here are asked we always need to look at the contracts that are on the either side of the fence.

Larry Story
Coldwell Banker Triad
0 votes Thank Flag Link Fri Apr 18, 2008
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