Buying a FSBO house?

[polarama]

I know the answers I'll get will vary depending on state laws, etc., but just out of curiousity, for anyone who bought a house that was for sale by owner, did you still have a realtor represent you? did you have to pay a buyer's broker fee?

I ask b/c we've been working with a realtor to find a home for the last 2 months. Today, while I was out taking a walk, I saw a FSBO condo that was pretty much what DH and I are looking for. I need to put in a call to our agent to see what next steps are, but am interested in hearing others' experiences.

And if this helps--we live in a crazy housing city (DC).

[Atlanta_eBride]

I'd say have your realtor represent you. We JUST dealt with this over the weekend. Our realtor was to be paid by the seller his commission. The whole thing ended up not going through after our counter offer and I'm soooooooooo glad we had our realtor to protect us. There were some things that kinda popped up after the initial offer that we would have been in a lurch had our realtor not caught.

While I'd be tempted to do it alone I dont think I'll ever chance it now.

[MrsTazlvr]

We bought our house as a FSBO and neither of us had a realtor. We both handled everything through our lawyers and I am glad we did it that way. Our lawyer really looked out for us. Good luck. :)

[kiddo]

We just bought a FSBO. It was very cut and dry, there were no real estate angents involved. We had a lawyer draw up the agreement and the owners had their lawyer look it over. We set up all the inspections ourselves and the mortgage company handled all the closing arrangements. Some things popped up during the inspections and we prepared a counter-offer.

We almost bought another house through a realtor, but it fell through. In all honesty, that realtor was useless. I found the houses myself on realtor.com and asked her to show them to us. She never came to us with houses.

My MIL used to be a realtor so she helped us a bit. But mostly she just confirmed things that I learned from online and through books. I did a lot of research.

If you want to do FSBO without a realtor, then I wouldn't call your agent at all. Just contact the owner directly.

Good Luck!

[sandt8704]

We gave a friend, who was a realtor, a thousand dollars to help with our paperwork and make sure everything was legal. We actually ended up saving 30K in the long run!

[julietchicago]

polarama, did you sign a buyers agency agreement with your Realtor?

If so, your Realtor should contact the FSBO seller and tell them she has a buyer and would like to show their home. She should ask if the seller is willing to pay a commission to her if you are interested in making an offer.

Note: Most FSBO sellers offer a commission to an agent if they bring a buyer in. In Illinois, the typical commission is 2.5% for the selling agent. They save money because they don't have it listed by an agent which would be additional commission they have to pay out. FSBO's aren't stupid, most know buyers work with agents, that is why they offer some type of commission.

If you do not have a buyers agency agreement with your Realtor, depending on the relationship you have established, you could just contact the FSBO yourself and if you like it...buy it.

I am a Realtor and I would be upset if my buyers did this. I work on the trust system, I am spending time commited to you by pulling listings, watching the market, previewing homes for you and showing you homes, I expect the same level of commitment in return. Otherwise, its a waste of time for both of us.

The most important thing is if you signed a buyers agency agreement, review the fine print. Most state if you buy a home, regardless if it is FSBO or with another agent, the agent is still due a commission.

If you didn't, just follow your gut. I hope for your sake and the Realtor's sake that the FSBO you saw is willing to work with an agent.

Good Luck!
:)

[Jodi AKA BostonTeacher]

We plan to put our house on the market in the spring. We've been lessed than impressed with any of the sales agents we encountered at open houses. Most just said hello and let us walk through. They made ZERO effort to actually sell us the house and it makes me sick to think of the commision they'll get.

I'm sure I would be more vested in marketing and selling our house, but to be honest I'm leery about inviting strangers into my home.

Any thoughts?

[kam]

My parents did this and they had great success. They had a real estate agent who did nothing for 3 months (she was highly recommended by several people but she was dealing with personal issues). She tried to price the house too high because she wanted her commission to be high. Because they got rid of the agent, they were able to lower the price and sold the house within a month.

They had tons of connections to the town they were selling in and a very good attorney. They also were able to seperate themselves from the house so they didn't have any sentimental ties. For them, it was a very good experience after having a horrific experience with their realtor.

[elladee]

Never having bought or sold a home, I have no personal experience to share.

However, I have been hearing commercials on the radio lately for America's Choice Realtry (http://www.americaschoicehomes.com/default.asp). It's a 0% commission thing. There's apparently a flat fee for listing your house. I don't really know much else about how it works, but it might be worth looking into.

[villanelle75]

Another thing sto consider is talking to some real estate agents about what their fees woudl be if you foudn a buyer. We thought about doing FSBO but I had no idea how to do the paperwork or any of that and I was afirad I woudlnt' get the perosnal attnetion or guidance through the process from a lawyer. So we talked to our real estate agent (who we were working with to find a new house) and he said if we came to him with a buyer and jsut wanted help ironing out the offer and handlign the process, he'd do it for 1% commission. We ended up not goin gthat route and jsut had him do the whole thing with showign and marketing the place, but it's soemthign you might consider.

If you go with a regular listing agent, you can also make sure you know upfront what kind of marketing they'll do. Ask about how they will market the place. Our guy showed us sample flyers and gave us a detailed plan for mailings they would do, when we have open houses (and how often they would have them until the place sold) how many signs they'd put up and where, etc. It made me confident that they woudl be doing something to earn their commission.

Every open house I've been to had a similar situation to what you describe. I think at an open house, the agent always just let's you see the place for yourself. It doesnt' really seem like the place fro them to be pushy.

[julietchicago]

I am a Realtor, and I definetly recommend trying FSBO before listing w/ an agent.

It's worth a shot. Give it a month and see how it goes. If you have a good attorney, it's a breeze.

I will PM you w/ some additional advice ;)

[laura]

My ILs did this w/ their house in Medford (since you're local), and it sold the first week or two for the asking price. My MIL advertised an Open House on craigslist and maybe in the Globe (? - I forget), and someone made a full price offer after the OH. FWIW, they had a close family friend be the "go between" and he was also the one doing the actual walk throughs at the Open House - I think this made the process a little less awkward. When the seller had a question, she called him and he called my MIL, etc. It may not work for your situation, but it worked out well for them and then they just took him to a nice dinner as a thank you.

I also second the rec for finding a good lawyer first. A real estate attorney (preferably one you trust) should be able to walk you through the process much like a real estate agent would. Of course you still have to pay an attorney, but I would hope not 3%! ;)

Good luck!

[boilermaker]

I don't know if you have made your decision or not, but thought I would chime in. We bought a FSBO and it went fine. The title company handled it for a flat fee (the sellers paid for it) but we bought in a state that does not require an attorney in the process (some states do).

That being said, a few things we noticed about our home that the sellers should have done...
Know the comparables. Pull the info off the internet and be prepared to offer reasoning for your price. Visit other houses in the area that are for sale so when your buyer says "That other house sold for $x, why is yours so much more?" You can actually answer them. Our sellers didn't have a clue what they were doing and to be honest, we got the house well below market value.

Have a good, solid contract that will hold up in your state's legal process. The contract our sellers offered up came out of a book from Borders. We didn't feel comfortable with that, so we got one from the Ohio Board of Real Estate. However, because we got the contract, we were able to set the defaults for who pays for what...and the sellers didn't really notice that they paid for a few things that could have been negotiated.

The last thing our sellers did wrong was not check over the final paperwork. The taxes were wrong and some other info needed to be changed so it delayed the closing by a few days and they were not prepared for that. They had actually signed all the paperwork as it was and we caught it and refused to sign until it was fixed.

It seemed to me that a real estate agent would have caught all those things.

That being said, if I was able to handle the showings, I would do a FSBO in a heartbeat.

[Little Angel '77]

we bought our current home from a FSBO. It was a slight nightmare, but the only reason was because he didn't know what the hell he was doing.

My lawyer was my sister, and she received the P&S from him, and it was basically a generic one that he got off isoldmyhouse.com. My sister had to re-write the entire thing. When she sent it back to him. He freaked out. He didn't understand the language( because he wasn't a lawyer) and questioned EVERY single thing. We had to push back the P&S signing 3 times. At the closing he was an absolute jerk.

When we did the home inspection we asked to have a radon test done, and so glad we did. He then had to put in a 5 grand mitigation system, and fought us tooth and nail on that. Basically by law he had to put it in. He tried to get us to pay it. We laughed at him.

If your going to do a FSBO, know what your doing. Know how to write a P&S that covers you, and know how to negotiate.

It was great for us in once sense because we didn't have to pay any real estate agent commission. We also didn't have to pay a lot of lawyer fees of closing costs, so it was a lot cheaper than it could have been.

[KrissyCat7]

My brother just sold his house by using FSBO. It took about 2 weeks to sell. Good luck!;)

[Asha]

I am a Realtor, and I definetly recommend trying FSBO before listing w/ an agent.

juliet - that's great you are being so honest.

honestly, i think it depends where you are. here in nyc the seller's agent is basically just a marketer. they don't handle the contract or help with financing. the lawywer handles all aspects of the contract and also helps as a go between with the mortgage agent. often times, i would ask the seller's agent to help with something and she would say it was not her job. honestly, i wondered what she was doing that was worth a 6% commission. luckily, as a buyer we did not have to pay that.

also, if you live in a hot market, then you should probably have no problem selling your house fsbo especially if you price it a little below those houses that are listed with an agent.

some things to consider though if you are doing this.
-you will need to be available to answer phone calls promptly.
-most people want to look at houses on evenings and w/e, so you need to be available to suit at a time conveniant for them to show the house.
-find out the sale price of homes in your neighborhood. you don't want to end up over pricing and not have the buyer be approved for a mortgage bc it didn't appraise.
-make sure you house shows well. give the front a spruce up for curb appeal, declutter your house (if you have to, put some things in temporary storage.), open all blinds and shades and turn on all lights, and have some vases with real flowers around the house.
-you could consider offering a commission to a buyer's agent. my parents did this when they sold their house, and it brought in more people and sold their house. though, some agents still won't show buyers a house if it's not listed with a realtor even with that commission. they did this in a very slow market and it worked, so it can be done.
-advertise, advertise, advertise

[eb23sheree]

We listed our house with a realtor for 6 months and if I could do it all over I would have either done more research on the realtor or tried to sell it myself. She was opposed to having open houses, took horrible pictures for online, had NO faith on our home selling, did not communicate with us on a weekly or even monthly basis, and did not try at all to sell our house. Eventually I ended up listing the house myself on a for-rent online website and I got the house rented out within a month (while I was living OUT OF STATE!!!). We asked the realtor to try to rent it with an option to buy and she couldn't even do that. What upset me more than anything though was her attitude. She just didn't care. When her contract was up, she left the keys on the counter without so much as a 'see ya.'

[tqsmom]

We sold our townhouse ourselves and I don't regret the decision whatsoever. We had ads in papers, etc. We had a good amount of interest with that, but did wind up using one of the services available online. For about $500 (and up) they put your listing on the MLS services. This is what eventually sold our house. We sold pretty quickly (3-4 months) in our market considering that we were 1 of 6 units up for sale in our complex at the same time.


I worked close to home and was able to run home on lunch to show it, including showing it to the buyer's realtor. We did have to pay a commission to the buyer's agent, but it was still 1/2 of what we would have paid if we had a seller's agent too.

Our attorney handled all the paperwork and went back and forth with the realtor as well.

[LandR02]

I have never gone the FSBO route, but a friend of a friend recently did this and got burned. He clearly had not properly familiarized himself with the market, and sold a really nice piece of property for a steal. He thought it went great b/c he got his asking price.

The reality? The people who purchased the house put it back on the market with a realtor, one month later, for $200K more than they purchased it for. Apparently this was all legal and kosher, and they ended up getting their asking price. The original owner was pissed, to say the least.

So I would definitely make sure that you get some input from someone about what a reasonable price for your home is! :)

[PaisleySloan]

We have a serious buyer for my parents' house. They live next door with their in-laws and are extremely interested in our property. It's not listed yet, and we wouldn't list if they began the process of getting a loan, which we'll find out tomorrow if it's a go. If not, we'll have to list it and this question will be a moot point.

Our buyers' agent is offering to help us negotiate the terms and finalize the sale of the property. What is a reasonable and fair commission for her to take being that we have the buyer on the line already? Would it behoove us to just do it ourselves?

HELP!!:eek:

[hmbay]

what is the "typical" listing rate? Around here it's anywhere from 4-7%. If all your realtor is doing is some paperwork I'd suggest perhaps 2% but it would be in your best interest to ask your realtor what he/she would charge--if they're helping you negotiate already they might assume they're getting a commission.

[PaisleySloan]

I've already spoken with her about what she would expect. We're bringing her a buyer, who will (hopefully) have financing. She hasn't done anything as far as negotiating yet. Her normal commission is 6%.

[WestieMomma]

Paisley My house is for sale and my relator specifically told me (and is stated in the contract) that if we find the buyer then there will be no comission taken at all and they will help us with the paperwork. Of course we are in TX so this may very by region and agent.

If you do give her a comission I thing 1-2% is more than reasonable but if you don't have the house listed through her already then I would maybe think about just getting a lawyer to help you with the paperwork. Most lawyers will do it for under $1000 is what I have heard. Also think that she will be making a comission off the house you are buying so it's not like she is putting in this time working with you for nothing.

[PaisleySloan]

Westie, thanks for the reply. I've heard that if she helps us facilitate the sale of this house, we should offer her something, but she is asking for 4%! We both think is a bit high being that she really won't be doing much.

I think a real estate attorney would definitely be in order if we decide to do it ourselves without her. And I don't want her to feel like we don't appreciate her, but we don't want to be taken advantage of either.

I know there are some real estate mavens on CC. Where are they?! :D

[Hello Kitty]

Yeah, I agree with Westie - you sound like you're a pretty prepared/educated seller and you could handle the offer yourself, using an attorney for wrapping up the paperwork.

4% does sound kind of steep for what she's doing, especially compared to her regular commission. Mabye it's what she's used to in the LA market?

[PaisleySloan]

Yeah, I agree with Westie - you sound like you're a pretty prepared/educated seller and you could handle the offer yourself, using an attorney for wrapping up the paperwork.

4% does sound kind of steep for what she's doing, especially compared to her regular commission. Mabye it's what she's used to in the LA market?

I do?! Thanks!! :) We definitely feel like we're becoming a bit more educated as we move forward. I feel like I'm flailing though. :eek:

I thought perhaps it was the LA market and what she is used too. I wonder if we offered her 3% if she'll take that, even then it's a nice chunk of change. There are so many things to consider.

Our next step is to speak with our neighbor and find out where his head is at. He was supposed to talk it over with his wife last Thursday, but we haven't heard from him since. We are now looking for new homes and our offer will be weak if the house isn't at least listed.

Any other opinions about the commission?

[villanelle75]

We live in a hot SoCal real estate market as well and our agent said he would do it for two percent and I think we very likely could have delt him down a bit on that if we had ended up going that route. We ended up needing a full listing so it was a moot point, but I think you could find someone to do it for much cheaper than 4%. The fact that the market is so friggin overpriced is a reson for htem to charge a lower percent, not a higher one, since that percent equates to more money than it would in a lower market.

[PaisleySloan]

We live in a hot SoCal real estate market as well and our agent said he would do it for two percent and I think we very likely could have delt him down a bit on that if we had ended up going that route. We ended up needing a full listing so it was a moot point, but I think you could find someone to do it for much cheaper than 4%. The fact that the market is so friggin overpriced is a reson for htem to charge a lower percent, not a higher one, since that percent equates to more money than it would in a lower market.

Thanks Villanelle!! I knew it was too high!! After we talk to the potential buyer, we're going to see if our buyers' rep with take 2%, if not, we're going to offer it to the lady we were going to list it with and see if she'll take 2%, if not...we'll be going through an attorney!

Anyone else with any advice?!

[mamax2]

O.k., I'm confused... *if* you do have a buyer, what would you be paying your agent any commission for? What kind of paperwork would she be handling. I ask this in earnest as some who has bought and sold several properties both on my own and with the help of a Realtor and as a licensed real estate agent myself.

Your buyer should be presenting you w/a written contract. At that point, I'd just have an attorney review it. Costs may vary, but I would almost guarantee it's cheaper than a commission.

Of course, if your neighbor falls through and you end up wanting the expertise and marketing of a real estate agent, by all means, negotiate a listing agreement and commission at that point for her services.

[PaisleySloan]

O.k., I'm confused... *if* you do have a buyer, what would you be paying your agent any commission for? What kind of paperwork would she be handling. I ask this in earnest as some who has bought and sold several properties both on my own and with the help of a Realtor and as a licensed real estate agent myself.

Your buyer should be presenting you w/a written contract. At that point, I'd just have an attorney review it. Costs may vary, but I would almost guarantee it's cheaper than a commission.

Of course, if your neighbor falls through and you end up wanting the expertise and marketing of a real estate agent, by all means, negotiate a listing agreement and commission at that point for her services.

I guess she is basically offering to be a go between, if we felt uncomfortable negotiating the sale. A little backstory, my parents both passed away recently (August, October) and we're selling their house. These people are friends of my parents, but not really my husband and I.

I do see your point. I just want to make sure everything is copacetic with the contract, which would involve either a realtor or an attorney to review it. If we end up paying the same in attorney's fees as we would our realtor, I'd probably rather pay the realtor. We've already decided that 4% commission is too much to ask in this situation, don't you agree? If we can get her down to 2-3% we may consider it, just for efficiency's sake.

I'd love to be able to do it all myself though, I've got too much on my plate and I feel like I'm going to snap! <high tails it to Emotional Support> :D

[Hello Kitty]

I would call a real estate attorney to find out what their rate is. Honestly, he's the one that has the expertise to review legal documents. If your buyer is using a standard state form (there's a 'generic' form for IL, I know) you can tell them that, which will probably make the cost pretty minimal.

Sorry if I sound a little anti-realtor, but I guess I learned it the hard way as a buyer. Realtors show you properties/sell properties and may help you prepare an offer based on market conditions. Lawyers negotiate counter-offers, handle contingincies and review contracts. You've got the realtor thing covered by acting as a FSBO - get a lawyer. :)

[mamax2]

Realtors show you properties/sell properties and may help you prepare an offer based on market conditions. Lawyers negotiate counter-offers, handle contingincies and review contracts. You've got the realtor thing covered by acting as a FSBO - get a lawyer.
Actually, Realtors (or any licensed salesperson) can negotiate counter-offers, contingencies, etc. In some states, Attorney Review is very popular and in others, attories aren't really used at all. In the state I currently live in, you can complete an entire R.E. transaction w/out ever seeing an attorney - we have settlements w/title companies (or w/attorney, but it's optional).

Nonetheless, in this case, I see an attorney being your best bet. Really, a Realtor's 'job' is to present you with a ready, willing and able buyer. If you already have that yourself, it's a pretty easy deal for anyone to close up. I don't know the asking price of the house, but I would guess the couple thousand dollars max. that you'd pay an attorney would be less than a R.E. commission.

[nic]

DH and I are looking at a FSBO house in a few days. Can anyone who has been through the process give me some tips? Should we talkto a real estate attorney before we look at the house?

[nic]

Bump-anyone else have any experience with buying a FSBO home?

[PaisleySloan]

Thank for all your advice ladies!

Our neighbor has crunched the numbers and decided he won't be able to afford it right now. He's working on becoming a sheriff, and I guess he won't be getting paid until July and I just can't wait that long!! So, we're going to list the house tonight I think! WOW!!!

Wish us luck!

[heather 8^)]

Yup, we're buying a FSBO and yes, we're using an agent.

We had signed the buyer's agreement with an awesome agent, but just happened to find this house on our own. We emailed our agent to follow up and see if the seller would work with buyer's agents. It turns out that the seller is a realtor as well, and that he not only works with buyer's agents but he offers a much higher than standard commission!

Long story short, her help in this process has been more valuable than I ever could have anticipated. She guided us through a very stressful negotiation process and asked questions/brought up issues we never would have considered. She has helped us with the inspection, repair request, faxing paperwork back and forth, etc. She even *cut her own commission* on the sale of our old place because she was making more that the standard commission on our new place!

FWIW, we are not first-time home buyers; and DH even bought his first house FSBO without an agent, so we certainly could have done it ourselves. That said, we highly trust our agent's advice, and her guidance and expertise has been amazing and more helpful than I can convey. I am very very glad we had her assistance with this process.

[amorey]

I just helped my parents sell my grandpa’s house FSBO. We sold the house to a family without an agent and were willing to sell it for less because of this. We discounted the price of the house by the 3% we would have paid the buyer’s agent. Depending on the market, not having an agent may be a negotiating point with the sellers.

[Asha]

i don't think you need to talk to an attorney before you look. in some states, you have to get an attorney for the contract. i would get an attorney if you decide to make an offer on the house, and you need a contract.

[BTB]

We've been lessed than impressed with any of the sales agents we encountered at open houses. Most just said hello and let us walk through.

Just a thought on that, from another current buyer - DH and I are *really* turned off by pushy agents. During an open house, we're looking to see if the size, layout, and condition of the house are what we're looking for. It's just a pre-screen visit, and we do a bunch of open houses in a row, not looking to spend more than fifteen or twenty minutes in any one house. If we're interested, based on what we saw, we'll ask for more information, approach the selling agent through our buyers' agent, and set up a private showing. There's absolutely nothing the listing agent could say during an open house that would sway us one way or the other; we either like the house or we don't, and if we do we'll come back another time. If the listing agent is pushy, though, we'll just be in a hurry to leave. So, although it may seem like the agent's doing nothing, nothing may be the appropriate thing to do at that point in the process.

[MeTheGirlie]

Hi everyone. We're going to be putting our house up FSBO this weekend. I'm writing the listing to go into the papers. My question is this (please answer honestly if possible) - is the common commission offered to buyers agents 2.0% or 2.5%? I'm located in Monmouth County, NJ if that's any help. :confused:

What's the difference between going to a regular realtor - i.e. larger companies like Prudential vs. Foxtons? I'm curious because if the whole FSBO thing doesn't work out I'm tossed between going to Foxtons vs. another company - ultimately, I really dig the way Foxtons does their marketing but I'm told that they don't offer much by way of commissions to other agents, therefore most Foxtons agents offer to other foxtons agents (?)

Thoughts, advice? I'd appreciate. :D

I should also note that my dad is an attorney, and is also part owner of the house, so he'll be handling everything for me beyond showing the house.;) ETA: Thank god for that!

[Sonicstef]

If you are doing the selling yourself, I dont think you would be required to pay any commission. I thought that was the whole point of FSBO.

If you go with a traditional broker, I think the commission is around 6% but its becoming more popular to offer more to sell your house quickly. (since agents will be more likely to push your house if they stand to make more $$)

And then there are discount brokers likes Foxtons, etc.. that charge 3% or less.

[MeTheGirlie]

If you are doing the selling yourself, I dont think you would be required to pay any commission. I thought that was the whole point of FSBO.


Sup sonicstef - actually, the 2 - 2.5% to buyers agent is an incentive to bring more buyers in the door, around here it's called "cooperation" and is quite common but I wanted someone's honest opinion regarding the commission rate since of course most are going to try to get that extra .5% :-)

Anyway, yes, I can completely try the route of doing just FSBO considering I already have most of my marketing materials in line (just need to finish the bathroom remodel this week before we photograph it) and get our yard cleaned up for the spring - and offer nothing, but I'd much rather offer agents something for increasing my visibility to buyers, hence the commission offering.

[MeTheGirlie]

Either way, the 2 - 2.5% is less than 6%!! Much rather not have to deal with that high a commission number!

[Tanya]

Typical commissions are 6% total, split evenly between the buying and selling agents. So 3% is what you would want to offer a buyer's agent. At least, that's how things are done around here.

If you go with a traditional broker, I think the commission is around 6% but its becoming more popular to offer more to sell your house quickly. (since agents will be more likely to push your house if they stand to make more $$)
Hmm, from what I've seen in many places that's not the case. It seems to be becoming more popular to go with a discount broker, which works by the listing agent taking a lower commission, but offering the same 3% to the buyer's agent. So the listing agent would take 1.5% for a payout of 4.5% only. Of course, if they also bring you a buyer, then it's even less out-of-pocket.

[hmbay]

I don't know about NJ but 2.7 is standard payout here in MN (DH is a realtor). Although DH told me last night if his clients wanted to look at a house that was fsbo even if it was paying out 2.7% he'd try to steer his clients to another house for two reasons (but would not refuse to show it--he'd merely "talk up" another house if his clients were torn between your house and a house being sold by an agent):
1) he'll end up doing the work of both realtors in light of making sure the paperwork is right and that it coordinates with your closing on your new house etc
2) by supporting FSBO (even ones paying a commission) he's more or less supporting himself right out of a job.

Some realtors will do reduced listing fees if you use them to both buy and sell your new home. for instance my DH lists at 4% in that case--2.7% goes to the buyers agent and broker and 1.3 goes to him to split with his broker.

[BTB]

Standard buyer's agent commission around here (Chicago and environs) is 2.4%, which, if a seller's agent is used, comes out of their 7%.

[MeTheGirlie]

Thanks for the replies ladies.

Yeah, I know around these parts, it's between 2.0 - 2.5% (I have to say I was pretty surprised by the 2.7% in your area hmbay I would've thought NJ Metro area (within close proximity to NYC) would've been higher than MN - but what the heck do I know ;) ).

I get what everyone is saying - completely. I don't intend to initially cooperate for the first few weeks, plan on pushing it soley on our own - but it's great to know what choices are out there.

[Tanya]

I would've thought NJ Metro area (within close proximity to NYC) would've been higher than MN - but what the heck do I know ).

Probably because RE prices are higher in NJ so that lower commission goes further. My parents just bought in MD, and I could have sworn it was 3%/3%, but from what you guys are saying on the east coast it seems to be 7% split unevenly. Interesting.

[MeTheGirlie]

I think NJ is 6% split evenly - - at least that's what I thought...

[Tanya]

I think NJ is 6% split evenly - - at least that's what I thought...
Then I'm confused by your previous posts about offering 2-2.5% as being the norm.

[hmbay]

I would've thought NJ Metro area (within close proximity to NYC) would've been higher than MN - but what the heck do I know

There aren't as many discount brokers here in the Minneapolis Area. We have two "big" real estate groups--Coldwell and Edina Realty and they make up probably 70-90% of the marketshare. They still charge 6-7% so 2.7-3% is the "norm" for the most part around here. DH used to work for Edina Realty but left when they wouldn't let him lower his commission below 6% even for good friends/clients. His new place (which is a discount broker) allows him to list at any percentage he choses.

[Rose]

6 used to be standard so it was 3/3 and then a few years bag at least in our market houses were selling like crazy so agents started doing it for 5%, which would be 2.5/2.5 and some, but not many were doing it for 4%. When I sold my home ( I was the agent, not a FSBO) I offered 2.5% to the other agent last month.

[mamax2]

I sold a house in Somerset Co., NJ last year at a 5% commission. I've sold/bought homes in 4 states and the commission has ranged from 4-7%. When I sold some land FSBO in Virginia, I offered (and paid) 2.5% to buyer's agents.

In response to your question about discount brokerages, I interviewed at Foxtons and ultimately didn't work there, but one of the things that turned me off was the lower commission structure; I felt that other agents (outside of Foxtons) wouldn't be willing to cooperate w/me if they could make more selling other properties.

That said, I now work at a full-service brokerage and if a FSBO was perfectly suited to my buyer's needs and my interests were protected to the tune of 2-3%, I'd sell it.

[MeTheGirlie]

Then I'm confused by your previous posts about offering 2-2.5% as being the norm.


Tanya, this is FSBO, yet offering the "buyers" agent 2 - 2.5% (the norm for FSBO with agent "cooperation" - if we choose that route)- so, if I was to just list the house with a realtor off the bat, it appears it would be somewhere between 6 - 7% - being the norm for non FSBO listings.

[Tanya]

Tanya, this is FSBO, yet offering the "buyers" agent 2 - 2.5% (the norm for FSBO with agent "cooperation" - if we choose that route)- so, if I was to just list the house with a realtor off the bat, it appears it would be somewhere between 6 - 7% - being the norm for non FSBO listings.
So you would be offering a buyer's agent less than you would if you listed with a traditional agent? Why wouldn't you want to offer them the same commission, 3%, like you said is the norm? Around here, for FSBO, you offer the same commission you would with an agent, because, like hmbay said, they are going to end up doing more work anyway. We don't use RE attorneys, though.

[Jessica]

I sold my condo in NJ FSBO and we didn't offer anything upfront to buyer's agents. And we received 5 offers in a week. We just put an ad in the Star Ledger and held one open house. I wouldn't offer anything to realtors up front and see what you get without using any (unless your in a big rush). We had plenty of people working with realtor come by on their own time and offer to go without realtors.

Also, we had numerous realtors call us after seeing our ad and ask if we would offer them a %age. We told them that we would be willing to give 2%, but were negotiable dependent upon the offers.

[MeTheGirlie]

Thanks everyone.

Jessica - when was this, was this last year? Curious to know about the market this year, everyone's saying steep decline (about 17%) in the housing market but man, your condo went QUICK :eek: . Was it this year or last?

[Jessica]

We closed last May. I agree that the market has definetly slowed here, but places are still going pretty quickly. When you're selling FSBO, the little things definetly count. We made brochures, cleaned like crazy, and repainted many of the doors and trim with a new coat of white paint to make it seem cleaner.

[Asha]

you could say something like buyer's agent commission negotiable.

[Heidi9771]

We had a condo on Beacon street in Boston minutes from Fenway park. We sold it ourselves (using isoldmyhouse.com) for asking price in two weeks. We saved $40K in real estate commission fees by doing our own open houses and inexpensive local and online advertising (isoldmyhouse.com listings, boston.com real estate listings, craigslist listings, etc.)

The MAIN value of going with an agent is that they have access to the MLS listing database. There are companies out there now that can get ou listed in the database on a less expensive fee level. Everything else is not rocket science by any means as long as you take some time to make yourself familiar with the process.

[Ummm]

let's say you've been working with a buyer's agent - NO CONTRACT SIGNED, but he's been showing you houses on weekends, sometimes spending quite a bit of time no just 10-15min showing...

and then let's say you find a house that's a FSBO, and your agent is willing to look at comps for you etc.

then how does it work with commission? since here the seller pays, the buyer doesn't have to pay commission.

is it up to the agent?!

[bluebunny]

We bought a FSBO and had been working with an agent and the seller paid the agent's commission.

[Ummm]

thanks bluebunny! did you just negotiate a % of does your agent have a specific %?

[jajacobsen]

Realistically, the agent needs to get paid. Usually, the buyer in a FSBO arrangent, but in today's market, you may get the seller to pay. However, that will affect your purchase price. As in the price will have to cover teh amount the seller is paying the agent.

Have you discussed this with the agent?

[Ummm]

i mentioned it to him today when we saw another house (he hasn't seen the FSBO one yet, but is willing to see it and let us know whether it's worth buying, he's pretty good at seeing things we don't see in terms of structure, etc).

he said well, he'd like to be paid something, but if not, that's okay too... but i'd feel bad if he doesn't get paid for the time he's spent with us. i'd also mentioned to the FSBO that we're working with a realtor and she's okay with that and realize that she may have to pay, but she seems flexible and said we can always work something out.

we aren't for sure if we're buying this house yet, we haven't looked for too long, but so far it's my fav (my husband likes 3 of them about the same) but there are some downsides to this house too - but since this is our first house we have to compromise somewhere, since we can't afford what we really would've wanted!

[ivory]

We bought a FSBO and the seller paid our agent. But we had nothing to do with that. I know our realtor checked with the sellers about the commission at some point, but that was her responsiblity and she didn't involve us in it. It didn't affect what we paid for the house either. The sellers were realistic and knew most buyers would have agents.

[bluebunny]

did you just negotiate a % of does your agent have a specific %?

I know our realtor checked with the sellers about the commission at some point, but that was her responsiblity and she didn't involve us in it. It didn't affect what we paid for the house either. The sellers were realistic and knew most buyers would have agents.

Ditto.

[Ummm]

cool thanks!

[Asha]

talk to the owner. the owner may not be willing to work with any buyer's agents. we are selling our's fsbo, and will only work with a buyer's agent in certain circumstances. typicially, the buyer's agent would get 3% of the sales price of the home, but since you found the home, i think it is fair that your agent get 2%.

[Ummm]

i've told the seller we're working with an agent - explained that this is our first home, and we're more comfortable working with one (since we don't know all the procedures and such, and here in the midwest, at least where i am, it' not unusual not to have a lawyer invovled, and just have the realtor instead. you can still have a lawyer, but we went to a house buying class given by the city and the lady said the lawyer thing is more common on either coasts than here.)

[mamax2]

It sounds like you've already talked to the seller and she's basically indicated that she's going to 'protect the broker'. It's up to your agent and his broker to negotiate the rate with the seller. It really does not affect you in any way, just like if this property was listed with a broker, the terms of that listing wouldn't affect you then either. In this market, I think a seller would be foolish NOT to protect brokers. It's slow in most places and if you want your house to move, ya gotta do what ya gotta do! From here on out, let your agent handle dealing with this seller - setting up any appts, presenting a contract (if it comes to that) and negotiating his commission.

FYI: there is no such thing as a standard commission rate, anywhere from 2-7% is typical, but it varies by locality and market conditions and can't be 'fixed', IOW, it's always negotiable. In this case, the rate your agent receives doesn't necessarily affect your offer, it simply affects the seller's profit margin and it's up to them to decide how flexible they can be in this area.

[Ummm]

thanks for the advice!

[alliesmomma03]

We aren't wanting to get a real estate agent involved it is a man we go to church with does anyone know what we should/could do?

[Hello Kitty]

Get a real estate lawyer to handle your interests in the inspection, transaction, and closing.

[jajacobsen]

If I were certain I was very interested in this house I would have it independently appraised (which you will need for your loan) and inspected. If possible, I would do these before even setting a final price. The appraissal could change your offerring price significantly.

The appraissal will cost $2-400. The inspection could be $3-500. Both if these are pittance considering what they might reveal, and additionally, an appraissal will be required anyway.

After, you have the appraisal and inspection, then settle your price. In your offer, I would make it subject to financial aproval. He shoudl hire an attorney to handle the closing.

[TravelGirl]

Has anyone here represented themselves in selling their own home and/or purchasing a new one? Any advice? Any good websites to use of what to do to protect yourselves? Sample contracts? Thanks!

[WestieMomma]

Search on here for a thread about For Sale by Owner-I know I've seen one. I personally think it's worth paying a realtor to sell your home as long as they do good marketing, etc. Plus you can always ask if they would lower their commission to 2% if you are going to use them to buy your next home. (2% to your realtor and 3% to the buyer's) This may not be a standard practice in all parts of the country but it worked for us (in TX). All you can do is ask!

As far as representing yourself for purchasing your next home why do that??You don't pay the commissions the sellers do so I would get a good realtor to help you through the process. Unless you bought a FSBO home it would really be a conflict of intrest for the seller's realtor to represent both of you and it's illeagal in some states. If you represent yourself you could end up not getting as good of a deal IMO.

[TravelGirl]

I also live in TX. Central TX to be more precise and it is a sellar's market here. I don't think we'll have much trouble selling our home - we are in a great neighborhood, great floorplan, etc. I would like to save ourselves that 3% and see if we can do it ourselves. I think we would give ourselves 4-6 weeks and then get an agent. Houses in our neighborhood average 29 days.

On the other side, I know exactly what I want in our new house and where. I have friends in the new neighborhood who keep me posted on houses coming to market and I have no problem calling the listing agent to see a house. I don't see the point in paying a realtor that 3% when I am doing all the leg work. I know the seller pays that 3% BUT it can become a bargaining tool in the negotiations. Either we can drop the house by 3% to start off with or have that 3% paid to us at the closing to cover closing costs and other fees.

If we decide to use an agent on both ends, we will definitely work out a deal with them to get 2% on our house instead of 3%. I've already had more than 1 agent tell me they would do that if we worked with them.

I'll do a search on your recommendation. I'm hoping to find some good pointers on what should be in a contract, what different scenarios work and don't work, etc. My parents worked with a real estate attorney in the past so I'd probably hire him to do a look over but wanted to educate myself in the meantime. Thanks!

[Rose]

On the other side, I know exactly what I want in our new house and where. I have friends in the new neighborhood who keep me posted on houses coming to market and I have no problem calling the listing agent to see a house. I don't see the point in paying a realtor that 3% when I am doing all the leg work. I know the seller pays that 3% BUT it can become a bargaining tool in the negotiations. Either we can drop the house by 3% to start off with or have that 3% paid to us at the closing to cover closing costs and other fees.

Actually, no. The seller is paying the listing agent 6% and then in turn he splits with the buying agent. The seller signs an agreement with the listing agent and is not paying each agent 3%.

[jajacobsen]

So to elaborate on what Rose is saying, when you are the buyer, whether you have an agent helping you or not, if the seller is listed with an agent - he or she wil pay the full 6% to his agent. So you not using an agent is not saving him or her money.

Now last time I bought a house I did not use an agent. (I stumbled on a house before I was seriously looking.) So the sellers agent collected teh full 6%. Lucky her. She did NOTHING for the sale.

[Tanya]

Anything's negotiable. We bought a house without representation and because the selling agent agreed to take only 3%, the sellers accepted our offer. Of course the agent had the right to the full 6%, but since she actually wanted to sell the place and not upset her clients, she took the 3% she would have gotten had we had a realtor. I should also say they had had the place on the market a long time, had reduced the price by 6 figures (they were in lala land originally), had a few contracts fall through (inspection, financing), and had a construction loan they had to convert if they didn't sell very soon, so they were desperate. Their realtor did nothing for us except show us the house--we submitted our own contract, so she was not acting as our realtor (though legally, in TX, she was our realtor). She drew up the papers for her clients once an agreement was reached, as she would have normally. We were experienced buyers, though, which is why we felt comfortable doing this. We sold 2 years later for a significant profit, so it obviously worked out for us:).

[TravelGirl]

Actually, no. The seller is paying the listing agent 6% and then in turn he splits with the buying agent. The seller signs an agreement with the listing agent and is not paying each agent 3%.

Okay, maybe I need to understand this more. It is fairly common practice around here to work as your own agent (people swap houses w/in the same neighborhood here all the time) and knock off 3% from the get go when negotiating the price. A friend of mine is an agent and his general practice is to get 6% in a 2 agent transaction but gets 4% from the seller if the buyer acts as their own agent. I've also had quite a few friends have the 3% given to them at the closing since they acted as their own agent. Does this vary from location to location?

[Tanya]

Realtor's commissions are not set; by law they have to be negotiable. So if that's what realtors do in your area, then that's fine, but in other areas, realtors might not be willing to do the same. However, when the seller signs a contract, it will state what the fees are, and at that point they become non-negotiable. It doesn't matter if there is a buyer's agent; he/she is legally entitled to the amount stated in the contract.

[jajacobsen]

In some areas it may be common but be aware that is NOT the norm is other locales. It would so NOT fly in our area.

[TravelGirl]

Hmmm... good to know. So, if we're representing ourselves, any reason why we can't have the seller's agent pay us the 3% at the closing?

[Hello Kitty]

TravelGirl - that's kind of my understanding as well, but obviously it varies by region. When my parents bought their house, they knew what they wanted and did not want a realtor representing them - the sellers and their realtor knew that and saw it as a negotiating point. I believe on the closing settlement, the price was reduced accordingly, and then the realtors 3% came off, then you have the net proceeds to the seller. There are a couple other ways the statement could work, but I don't know exactly.

Personally, I plan on doing the same thing next time I buy - around here it's obviously common. I really didn't have the greatest experience as a buyer with a realtor, and so I'd feel comfortable going it alone (well I'd still have a RE attorney).

[jajacobsen]

Well you're not in contract with the seller's agent. So you can't make them pay you anything. Maybe they will agree to it, maybe they won't. Your ourchase coontract is with the seller, not their agent. The seller has a pre-existing contract with their agent that probably doesn't contemplate 3% to teh buyer if the buyer has no agent.

Look if it is common inyour area, I would say try it. But be aware that tehagent probably has a 6% contract with the seller and any discount you get is because they agent feels like giving away some money to make teh deal happen.

[Hello Kitty]

any discount you get is because they agent feels like giving away some money to make teh deal happen.

Yep, I think this is exactly the case - again, it has to vary by region and market. I'd say in even a remotely hot market/region, you would probably get laughed at. Where I live, houses sit for 6 months or so before selling, and realtors would rather get any commission than no commission.

[Rose]

Hmmm... good to know. So, if we're representing ourselves, any reason why we can't have the seller's agent pay us the 3% at the closing?

Legally you have to a real estate license to collect a commission. If you are negotiating that fee into something else that is different. You are putting an agent into an awkward position. Does anyone come into your work and try and buy something with part of your pay?

You can't just go in negotiating with the seller agents fee because that is set withe seller. It's between them and has nothing to do with you. It may work out where they want to make it work with you but I wouldn't start out that way.

[littlelove8138]

**Bumping**
we kind of have this problem.....kind of.....i just wasn't sure if i should start my own thread for one question.

here goes..

a friend of ours is going to buy our home for our asking price but we were already working with a Realtor. she said she would be more then happy to fill out the paperwork for us for a small fee like 1-2%. my question is weather that's too high or not?

[TravelGirl]

OK, I didn't expect to hear so many be negative about the idea but I now consider myself warned. Thanks for the head's up.

Anyone out there buy a house or sell a house on their own? Advice?

[pixielou]

On the other side, I know exactly what I want in our new house and where. I have friends in the new neighborhood who keep me posted on houses coming to market and I have no problem calling the listing agent to see a house. I don't see the point in paying a realtor that 3% when I am doing all the leg work. I know the seller pays that 3% BUT it can become a bargaining tool in the negotiations. Either we can drop the house by 3% to start off with or have that 3% paid to us at the closing to cover closing costs and other fees.


it sounds like you have a particular neighborhood/sub-development picked out that you want to move into. i would recommend that you and your friend try to network with the neighbors - let them know that you are interested in buying in the neighborhood, and thus try to negotiate a deal BEFORE a house even goes on the market. then you won't even have to worry about the 3% or 6% or whatever - it will be a private transaction between you and the seller.

~pixie

[jajacobsen]

I don't think we're being negative really. I just think that we are pointing out, flaws, for a better word, in your approach. It would appear that you see the 3% normally paid to the buyers agent as money saved if you are not represented by an agent. But we're saying that is money that is owed to teh selling agent whether or not there is a buyers agent.

Some may work with you on this, especially if it is common in your area. But I would just caution you against assuming all selling agents will be willing to cough up 3% - because many will not. It's money out of their pocket.

The idea of networking to find out about potential sellers prior to homes being listed is a good one. However, this is easier said than done. Many people are reluctant to enter into discussions with potential buyers before consulting a realtor because they need the assistance in pricing.

Good luck to you!

[hmbay]

Some may work with you on this, especially if it is common in your area. But I would just caution you against assuming all selling agents will be willing to cough up 3% - because many will not. It's money out of their pocket.

Actually most agents need to clear this with their broker as well. It's not always their call to only accept 3% just because the buyer doesn't have an agent. The broker prefers to get their cut out of the full 6% as well so just because the agent might be willing they still might not be able to do it if their broker/boss says "no deal".

[jajacobsen]

hmbay - Another good point!

[TravelGirl]

It would appear that you see the 3% normally paid to the buyers agent as money saved if you are not represented by an agent. But we're saying that is money that is owed to teh selling agent whether or not there is a buyers agent.

Some may work with you on this, especially if it is common in your area. But I would just caution you against assuming all selling agents will be willing to cough up 3% - because many will not. It's money out of their pocket.

Well said.

[WestieMomma]

littlelove8138 I think that 1-2% is totally reasonable. Why not go 1.5%?? Since you found the buyer yourself but have had this realtor do work for you and already listed your house that seems fair to everyone. How long has your house been listed with her? Any idea how much $$ the realtor has spent on marketing your house thus far?

[littlelove8138]

Westiemomma-the house never went on the market we were still getting ready for that when we found a buyer. so the only thing she has done for us is take us out to look for our "new home" i don't in any way want her to do it for free i just wanted to make sure i wasn't being over charged. :)

[kristin]

Just thought I'd bump this thread, since my DH just convinced me to do a FSBO....

We have had horrible past experiences with realtors in the past. When we sold our last home, they only had one open house in 3 months, but showed people the condo a few times/week while we were at work. The refused to do any more open houses because they felt we had a fair deal on the table ($30,000 less than what we asked for). We ultimately learned that they sold it to another realtor who sold it 2 months later for $40,000 more than they paid us!

Also, I have 2 small kids and do not want a lockbox on our house! I know most realtors push this, but the same realtor mentioned above really abused this, even after we sold they would let themselves in whenever they felt like it.

Anyway, due to this and other bad experiences with realtors, we will be putting our house on the market in about a month FSBO. Luckily, we have a smaller home in a very desirable area of North Jersey, and there are about 1/2 dozen homes in our neighborhood that are for sale using realtors. We've been through all these homes, and we feel ours is the nicest by far due to the work we've put into it. I think there is a limit for starter homes though, so we won't be asking too much above what homes our size are going for.

Any suggestions for where to advertise? Obviously we'll be putting signs up on the weekends. The house next door has been empty for almost 9 months because they are asking way too much in light of how much work it needs - so we expect some traffic from people interested in that home. Also Craig's list and the local paper. I know many people search on nmls listings. Is there anyway to get your home on the listing without having a realtor?

We plan to have open houses every weekend and I will be available by cell during the week to show the house. We decided to try it for 2 months and then if it doesn't sell, find a realtor.

I am also a little nervous about showing the home myself when my DH starts his new job. With 2 toddlers in the house I just feel a little more vulnerable. Anyone else concerned about letting total strangers into your home?

This thread has been really helpful so far - any more advice would be really appreciated! TIA!

[hmbay]

kristin--sorry you've had a bad experience. DH is a realtor and I can honestly say yes you had a bad realtor. Open houses should be done when you want them. Period. Reality is they rarely sell a house--they're used primarily by agents to find clients but they do sell houses in some cases and if you want one they should have one or have another agent in their office hold one for you. You are the owner and the client--you should get what you want. #2 what they did with selling to another agent who flipped the house is bordering on unethical if they knew that was the other buyers intent but they might not have known that. However did the other agent get more for the house because they upgraded anything? That is always a possibility. #3--it IS unethical for your agent to use the lockbox without getting your permission to enter. New electronic lockboxes track who was in your house when so agents need to be accountable for their actions. If you do list with an agent request they use an electronic lockbox--they are less likely to abuse the privledge of being able to enter your home if they know there is a papertrail.

There are flat fee places you can pay a set amount and have your house listed in MLS. MLS sells the majority of houses. I would pay to have your house listed in MLS. As for the safety issue--yes it's a big safety concern to show your own house. Realtors take their lives in their hands anytime they show a house. DH personally knows realtors who have had "clients" pull guns on them and lock them in closets while they robbed the house or had "clients" pull a knife out of the knife drawer in the kitchen and rob the agent. It rarely happens but it is possible for it to happen. Don't want to scare you but it IS a reality and could happen--most likely it won't but it could.

[Hello Kitty]

We had to sublease out our apartment, and I had to show it to random people alone. I did feel very vulnerable but couldn't get a neighbor or friend over to show it with me. What I did was call DH when the people showed up, and then called him immediately afterwards. It's not a terribly proactive approach, but it did make both of us feel better.

And I absolutely would pay to list in the MLS. Definitely include pictures too.

[kristin]

Hmbay - I hope you didn't get offended by my tone regarding realtors. I'm sure there are some great ones out there. Just in my limited experience, and probably due to my location, we have gotten screwed. Thanks for the info on the lockboxes - knowing that now they can track who comes into my house makes me feel a little better about them. As to our previous experience, I guess they could have made some upgrades, but it was already very nice - cathedral ceilings, window seats, crown moulding, granite counter tops and top of the line cabinets (which cost us a fortune). But I guess people always think that about their own homes!

Hello Kitty - I guess it's just a necessary risk to show the home alone? I would be very wary of people just stopping by, but if they call ahead of time I can't see refusing to show the place. My parents did FSBO and they only showed their homes during open houses - never during the week. In a buyers market like this, I don't see how we could afford to do this! Those were the days!

Thank you both for the info on listing on mls - any idea how much it would cost?

[hmbay]

no I wasn't offended--there are good and bad realtors just like there are good and bad mechanics or good and bad drs or anything else. I was just agreeing that yes you seem to have encountered a very bad one.

[Hello Kitty]

Kristin - I had a bad realtor experience too, and am planning on FSBO when the time comes. I think you can get it listed for about $400 - google around. There are sites that are obvious services and stuff (and extra charges), but there are other ones that just facilitate MLS for you.

I think being available is part of the process. Unless you are able to have a friend come over and either sit with your house or with your kids while the house is shown. Also in showing my apt, few people wanted to see it during the day - it was mainly on weekends and evenings anyway. DH worked retail so that's why we had to do the phone thing.

I'm guessing a lot of people wouldn't just stop by your house - especially if you have good signage and fliers out. You can also structure visits so that people come one after another - which I did and it made me feel better.