What should we offer a buyer's realtor as commission on our FSBO house?

Question

We are selling our house for sale by owner and have had realtors bring prospective buyers through. We are willing to pay commission, but 3% is going to hurt a little. We could swing 2.5% or 3% if we absolutely had to and received a fair price for the house. However, 2% would be much more comfortable. Is this an acceptable commission for a buyer's agent? Thanks!

Answer 1

if your house sits on the market no takers for awhile then a buyers agent bring a legit buyer what is this worth for you?

common practice is 3% to buyers agent anything less and you will most likely not get many bites from real estate agents

in this market if a agent can bring a ligit buyer at your asking price be happy to pay 3%

Answer 2

Commissions vary by market and by the price of the home. You will need to provide a competitive commission for a realtor to show your home at all. However, as an FSBO, your home is probably not listed in the MLS anyway so it will not be shown by realtors much. Determine the typical listing rate for properties in your area, usually 6 or 7%, and divide that by two. That is what a selling agent would get from a listed home. You can reduce that by 1/2 point or so, but any further and you will not get the desired traffic unless your home is at the upper end of the price range for homes in your area (thus a higher net to the realtor even though the percentage may be lower).

The fact is, in most cases you have to decide between selling it yourself, or using a realtor. There are services now that bridge that gap somewhat such as buyowner.com.

Good luck.

Answer 3

Her commission is not too high, but is is negotiable. However - negotiation of commissions is something done BEFORE a Realtor brings you an offer. Don't know how the laws are in Florida, but in Texas, the contract for sale is a contract between the buyer and the seller. (yes, the Realtors help the buyer and seller in negotiating the contract and the Realtors do fill it in) The commissions paid out is on a separate contract altogether. Also, a Realtor in Texas could lose their license for writing an offer contingent upon their commission. She should never have brought you an offer or even disclosed the name of her client UNTIL commissions were settled. Now you have an offer you can probably accept with no commitment to pay any Realtor fees - but, like I said - I don't know the laws in Florida. You might want to check with the local board of Realtors or the state licensing agency there.

Answer 4

3% is definitely the norm here (Utah) and throughout the country. But it is by no means fair. Realtors have a sort of monopoly on the real estate market in that they tend to ostracize any non-agents selling homes in the market.

In the United States, Realtors list the majority of homes on the market and as generally they would rather sell those homes to another agent who will "help MAKE SURE the transaction happens." Sellers agents and buyers agents would much rather work with another agent than work with a person who is representing themselves because they seem to think it will make the transaction easier by having another agent involved (which is by no means the case).

I've seen agents turn down higher offers for their clients simply because the higher offer came from someone representing themselves, and the lower offer came from an agent (who will "protect" the 6% commission).

Realtors not only steer clear from working with unrepresented individuals, but they also dislike working with "discount realtors", simply because the discount realtors comprimise the 6% commission that is the norm in the industry right now. If everyone starts using discount agents in selling and buying homes, discount realtors would have a competitive advantage, and would be doing the same work for less money, so no one would work with an agent for 6%. That is why I say they have a small monopoly on the real estate market. They are striving to protect thier commissions at all costs. They have an insanely strong hold on the rate of thier commissions, that is why you will have ahard time offering only 2% BAC (Buyers Agent Commission). Realtors feel they must protect their 6% (3% for the selling agent and 3% for the buyers agent). If any of them lower thier standards and take a 2% offer, they loosen thier grip on the market.

Current market conditions may not allow you to give less than 2-3% to a buyers agent. If you don't want to pay the 2-3% to an agent, I would recommend marketing it to people looking for FSBOs. Listing in on the MLS will only get more agents involved. List in in the papery, on craigslist.com, on local online classifieds, and places home buyers are likely to look.

Other than that, I don't know what else you could do. If you lived in Utah or Idaho, I could help you a little bit more, my company specializes in working around the real estate agent monopoly. If you need more help I'd be happy to offer you my services for free.

Answer 5

It depends on what you are going to have the agent do for you. If you want them to bring a buyer and handle both sides of the transaction & contract negotiations, then 3% is not really enough, given that they would make 4-6% if they sold their own listing.

If you just want them to bring you a buyer and you will have an attorney represent you, 2.5% would be the minimum (in my opinion), or they will have no motivation to show your house as opposed to one of the MLS that pays them more than 2%.

If money is that tight, you may have to sell yourself, but keep in mind that most serious buyers are using agents, so you will have a limited market. I would recommend using craigslist.com if you are trying to sell yourself, but also, I recommend working with a mortgage lender to make sure you don't just waste time showing your home to people who can't afford it.

Answer 6

I tell my clients 2% - 2.5% (FSBOS) unless the Buyers agent has a buyer who is pre-approved, then I tell them that the Buyers agent is bringing a qualified buyer to them but that they still need to follow up on the transaction details.

Answer 7

I wouldn't do more than 2 percent. And I agree you need a lawyer. If you are going the FSBO route, why are you willing to pay high fees for agents. One of the most important thing an agent does is make sure all the proper legal steps are taken, and you are not getting that service if you are doing FSBO.

Answer 8

2.5% is the minimum that should be paid. Normal is 3%. I would not sell a house at 2%. Sorry.

Answer 9

3% of the sale price is normal and fair.

Answer 10

2% should be acceptable. Also, YOU need to hire a real estate attorney. He needs to review all paperwork and be present at the closing to represent you. It does not cost much.