FSBO: Should You Pay the Buyer’s Agent?
By Sadiya Anjum
The decision to sell on your own (FSBO) is largely influenced by the savings you can make on an agent’s commission. But if you are not a pro in real estate or not extremely lucky, you will soon realize that you cannot really avoid agents without affecting your sale. A significant portion of the real estate market is FSBO and agents have been quick to realize this. You may choose to utilize some of the discount services offered by agents – services only for marketing, to list on the MLS, for negotiations, to hold open houses etc.
Even if you are still completely selling on your own, you may still not be able to avoid the buyer’s agent. Buyer’s agents are generally wary of FSBOs and may not show your home to prospective buyers. This rises from the fact that agents do not expect to be paid any commission in such a transaction. If they stand to gain nothing, odds are they will not be directing any buyers to your home.
For Sale By Owners have to be conscious of reality. You will just be losing out on several potential buyers who have agents by their side. If you are in a seller’s market, you may not worry too much. On the other hand, if it is a buyer’s market you may have some difficulty finding worthy buyers or even some who are interested in your home. The smart thing to do is to not avoid a buyer’s agent entirely.
If a potential buyer is interested in your home, his agent may approach you. Before you rule out dealing with him entirely, consider the benefits you will stand to gain. An agent involved will usually try to make a successful deal. Any problems that may arise during closing and other minor details can be effectively handled by him. But since he is still the buyer’s agent, you would be smart to have a real estate attorney by your side.
Technically you are not obligated to pay any agent, even the buyer’s agent. But if a buyer likes your home and you refuse to pay the agent a dime, the buyer may have to pay the agent from his pocket. Unless you lower your sale price, there is a good chance of you losing the buyer. If you have many interested parties, you may have the liberty to take your pick. If not, you should consider the best offer that comes your way even if there is an agent involved.
A buyer’s agent may ask you for a commission or a finder’s fee for bringing a buyer to your doorstep. Although you are not obligated you should consider paying him some amount. A buyer’s agent will usually charge a percentage that he would have normally obtained if he was splitting the agent’s commission with a listing agent. In comparison to the exorbitant amount you may have paid a listing agent, this would be much cheaper. In addition, commissions are always negotiable – so you can always work an arrangement that makes all parties happy.
This can work only if the agent decides to bring his buyers to your property. To gain more exposure, you should be willing to offer a commission or a fee to the buyer’s agent. This will keep the agents from shying away from your property. If you list with the MLS, your MLS contract may actually require you to pay the buyer’s agent.
To help reach out to a larger segment of home buyers, you will have to let agents in. Trying to save a small percentage of your money could put you in a position of losing potential buyers with good offers. Ultimately it is your personal decision but a buyer’s agent may just know the perfect buyer for your home.
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