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Answers (6)
- Michael Emery, "MikeEmery"
- Contributions:7298
Another point that needs to be made is unless your home is woefully underpriced, there's a pretty good chance that all offers will come in for less than asking price.
Just as everybody thinks their baby is the cutest baby in the world, homeowners think that their home is the nicest and most valuable home on the block. Which is why many FSBO homeowners overvalue and overprice their homes. So it's no great surprise that the offer came in for less than list price. Everything in real estate is negotiable, including price.
Another point to ponder is are you going to rely on the buyers agent for assistance in setting up escrow for both parties. It's easy to stick a sign in the lawn but the problems start when someone (god forbid) makes an offer on your home. Unless you have some expertise in home sales, you might well be relying on the buyers agent to help you out. And that certainly is worth more than 1 percent.
Just as everybody thinks their baby is the cutest baby in the world, homeowners think that their home is the nicest and most valuable home on the block. Which is why many FSBO homeowners overvalue and overprice their homes. So it's no great surprise that the offer came in for less than list price. Everything in real estate is negotiable, including price.
Another point to ponder is are you going to rely on the buyers agent for assistance in setting up escrow for both parties. It's easy to stick a sign in the lawn but the problems start when someone (god forbid) makes an offer on your home. Unless you have some expertise in home sales, you might well be relying on the buyers agent to help you out. And that certainly is worth more than 1 percent.
- SoCal_Engr
- Contributions:5666
Personally, I believe you should establish a set commission rate for the buying agent. If you are going to pro-rate the commission based on offer price, that should be spelled out up front - not after the fact. The agent should have asked more questions, but you have set up a situation wherej confusion about the actual commission is almost inevitable.
If you accept the offer, I personally believe you should honor the 2.5% commission. If you want a better offer, then decline the offer and wait for another/better one.
"We don't want to be unfair to her, but she only brought in this one client and we could wait for another offer from a walk-in buyer."
How many clients do you want her to bring in before she "earns" her commission? If she brings in "only one" but that buyer offers a price you're willing to accept, she's earned her commission.
If you accept the offer, I personally believe you should honor the 2.5% commission. If you want a better offer, then decline the offer and wait for another/better one.
"We don't want to be unfair to her, but she only brought in this one client and we could wait for another offer from a walk-in buyer."
How many clients do you want her to bring in before she "earns" her commission? If she brings in "only one" but that buyer offers a price you're willing to accept, she's earned her commission.
- Matthew Allan, "Matthew Allan"
- Contributions:128
Did you originally say you would work with agents? Or you were clearly looking to avoid agents and she arrived and asked if you'd pay a commission? While I do think FSBOs should pay the normal buyer's commission if they are brought an offer, if you made it clear that you didn't wish to work with an agent, and she still brought an offer, then she didn't do her due diligence. You and the agent should have made some arrangement for a commission, not based on what her client's price would be, but as a percentage of any closed sale, per the norm. Otherwise, this floating commission confusion inevitably happens.
- James Callas, "ABBAUSA"
- Contributions:957
If you agreed to 2.5% you should stand by your word.
The agent bought you the buyer and you have saved the listing side fee.
Pay what you agreed to pay.
Good Luck!
James Callas - Realtor©
The agent bought you the buyer and you have saved the listing side fee.
Pay what you agreed to pay.
Good Luck!
James Callas - Realtor©
- RichardReid
- Contributions:197
An agents commission typically does not vary with the offer price. The agents role is to facilitate a meeting of the minds. If you vary the agents commission with the price offered, you have 3 parties working in a transaction rather than 2. This creates ethics issues for the agent - who typically has the greatest advantage based on experience.
In most cases, commission is split between a buyer's agent and a listing agent. If 5% is a common commission in your area, then 2.5% would typically go to the buyer's agent. If they bring you a deal you are willing to accept, you should pay them the full 2.5%. Essentially, you should know that any deal you are going to accept from that agent includes your commitment to pay them 2.5%.
If you want to wait for a buyer without an agent, you could be waiting a long time. 87% of all buyers use an agent to facilitate their transaction.
In most cases, commission is split between a buyer's agent and a listing agent. If 5% is a common commission in your area, then 2.5% would typically go to the buyer's agent. If they bring you a deal you are willing to accept, you should pay them the full 2.5%. Essentially, you should know that any deal you are going to accept from that agent includes your commitment to pay them 2.5%.
If you want to wait for a buyer without an agent, you could be waiting a long time. 87% of all buyers use an agent to facilitate their transaction.
- wetdawgs
- Contributions:26830
It is normal with a FSBO to pay a buyer's agent 1/2 of the standard commission of the area, therefore, if the standard commission is 5%, then 2.5% is standard for the buyer's agent. Most FSBOs include this percentage in their advertising.
1% is not reasonable. You apparently wish to wait for the walk in buyer.
FSBOs are ignored by many agents because of this concern.
1% is not reasonable. You apparently wish to wait for the walk in buyer.
FSBOs are ignored by many agents because of this concern.
How much should we pay an agent who brings a buyer for a FSBO listing?
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