Profile picture for SellerDweller

Buyer's Agent Commission

I am currently marketing my dwelling as a FSBO.  I have been contacted by some realtors asking if I would offer them a 2.5% commission should they find a qualified buyer.  I don't have a problem providing such a commission, 

My question is when do I sign an agreement with them concerning this commission?  I realize they must protect their interests, but I am reluctant to sign any such agreement until a specific offer to purchase is being presented.  
  • July 19 2012 - Webberville
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Answers (11)

You will sign a commission document only for the particular client they have with them.
  • July 19 2012
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If we work with a FSBO, the listing agreement specifies that it is only for one or two people, generally, and specifies the names of those individuals. The commission is also listed in that agreement.  The purchase agreement is only written if after viewing the home at least 2 times, our clients want to make an offer.

  • July 19 2012
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We use a document titled a one-party listing agreement which states the buyers name and is only valid for that client.  It is signed when the buyer views the property to protect all parties involved.

Good Luck!!
  • July 19 2012
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I understand the hesitation seeing as though you are opting to do a FSBO.  The contract that you sign with the buyers agent should be for specific buyers that they bring to the table.  I'm in Illinois so the rules may be a tad different, however, just make sure you are not signing a listing contract if it is not your intention to list your property with an agent.

I also always recommend that FSBO and buyer clients get the assistance of a RE attorney, even it's just to review documents after signing.

I hope you sell soon! :)
  • July 19 2012
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Profile picture for emtjweber

Just be sure that the agreement states you don't owe them anything unless they bring you a buyer.   As an agent I wouldn't show your house without something in writing.  Also when people see a FSBO they think they can get the property cheap... because they aren't dealing with a professional.  So you really don't save anything by going FSBO plus you have all the headache of having to do everything yourself...  for example by law you must provide a seller's disclosure even on a FSBO but if you didn't know that you would be putting yourself in jeopardy for legal action down the line.  There are other considerations as well... my suggestion is to be represented.  Hire an agent.

  • July 19 2012
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You sign it upon request, so long as the terms are agreeable to you. While we are not here to provide legal advice, our offices are stocked with appropriate forms.

All the best,
  • July 19 2012
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The terms of a contract for commission should be looked over by your lawyer if you feel uncomfortable. That being said, this is not an uncommon commission structure. Best of luck on your sale.
  • July 19 2012
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Profile picture for SellerDweller
Judging from the responses, there seems some variation on when such an agreement is usually signed.  It seems some agents would be willing to wait until they are ready to present a specific offer, while others would want an agreement upfront before they are wiling to even show the property. As such, the overall response would seem to be that there is no standard practice. I hope I got all that right.

That's fine.  I just wanted to make sure of what would be deemed reasonable when dealing with agents.  My preference would obviously be to work with agents who wouldn't demand an upfront contract.  And if I would feel otherwise compelled, I would certainly make sure I could still consider offers from others.  (BTW, I am working with a RE attorney.)

Thank you all for your helpful advice.

  • July 19 2012
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Just sign a fee agreement "if and only if" the escrow goes through and the commission is to be taken from the proceeds of the sale.

walla!
  • March 27 2013
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Profile picture for user8194043
As one using FSBO right now to sell the family home, I would also like to note that anything you sign should have a time limit on it... For example, you sign an agreement to pay the 2.5% commission to the one person the agent brings if you accept an offer from them, but what happens 3-6 months later (after a price change or two) and the same buyer comes back with a different agent and makes an offer you accept? BE CAREFUL and get FULL DISCLOSURE on who is paying what, to whom, and why? 

I feel a broker or agent should only be paid if they bring a buyer who is READY, WILLING, and ABLE to BUY within a reasonable period of time you agree to... Just my 2 cents!   
  • May 24 2013
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In Pennsylvania there is  Broker Fee Agreement, which states what you agree to pay, the name of the potential buyer(s).  This will protect all involved and also show clearly who is represented in the transaction.
  • May 24 2013
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