Ask Me Help Desk - For Sale By Owner -- Issues?

Quote:

Originally Posted by ScottGem

But that's not a true buyer's agent. I maintain that a true buyer's agent is not paid by the seller in any way, That would create a conflict of interest.

Well, Scott, I'm not trying to set up an argument with you - you ALWAYS have true, honest, helpful advice. I just know that I have a written representation agreement with my BUYERS agent (that's what it says on the document). And I've had the same contract with several other agents in several other states. (Residential and commercial). I've closed over 100 real estate deals in the last 5 to 6 years as a buyer, and have never paid the agents a penny. Their sole form of compensation was from the seller at closing as I previously stated. My agent represents me and only me. There's no conflict of interst. She gets paid if and when we successfully close on a property.

I've always operated in the middle of the country, and I know things can be quite different on the coasts.

Original Poster,

What I've seen happen several times - usually when I've been the seller - is that you may have a Realtor call you and say, "I have a client who's interested in your house. They want me to represent them. If we work out a deal and they buy it, would you be willing to pay me 3% of the sale price?" Then you can negotiate from there. Sometimes it's a ploy on the part of the agent to get a listing. Sometimes they really have someone interested. It's a crap shoot.

You can say that you won't pay them, the buyer would have to pay them, but in over 15 years, in 6 different states, I've NEVER seen or been part of a real estate transaction where a buyer has paid a realtor a cent.

I've always operated in the middle of the country, and I know things can be quite different on the coasts.

P.S. If a realtor brings a 'close to full price' offer with good terms and a pre-approved buyer, I've usually just paid them. Sometimes negotiated it down to 2.5 or 2% on higher priced stuff. I try to build that in when I figure my initial price.

It appears to me that there is no clear consensus on what a Buyers Agent is. That is fine however I have personally have not heard of a buyer paying an agent directly. So that being the case if I am doing a FSBO then I should expect an agent representing the buyer (no matter what you call them but the ones that split the sellers commission) to not show my home for fear of not getting half of the commission. I assume I may get a few more nibbles if I mention that I will offer a 2% commission to an agent representing a buyer.

My question is this, if a buyer (with an agent) sees my house online and asks to see it I know the agent has to legally take them to see it. If they want to put an offer on my house what does the agent do? Would they typically ask me for a commission? What if I say no?

Also 'Rockinmommy' what does "close to full price' offer with good terms" mean exactly? I assume that they accept your full price but is that it?

Thanks

Ok, I will give you the actual teaching that they do with real estate agent, This is from the National part of the testing, from Dearborn Real Estate Education from the Ethics section, This is used in most states but I know is the law for Georgia and Tennessee where I am licensed.

To have a true buyers agent, you have to create a buyer agency agreement, this is not merely a agent that is representing you to find property for you. There is seldom a true buyer agency agreement ever done. For two significant reasons. First if someone chose to hire an agent to represent them in the transaction as their buyers agent, the buyer client would be expected to pay the agent a fee or at least a commission. So if the person is not actually paying the agent thierself then there is no true agency agreement.

Also a true buyers agent can not show the person any property that their brokerage has listed, since by law they are not allowed to try and sell their own listing as a conflict of interest.. Which would be a violation of the fiduciary duty of a true buyers agent.

The major change that stopped the use of a real buyers agent was the National Association of Realtors and the MLS system. Any cooperting broker of the MLS is considered a cooperating broker or subagent of the listing agent. So when you have a agnet show you property off the MLS, they in fact become legally a subagent of the listing agent if they are to be paid only by commission if they sell you a home.

Since it is the selling broker who is now spliting fees, and the selling agent is being paid in fact by the selling broker, there is no buyer agent status since the buyer is not the one paying the agent.

In fact most states require that the true agency disclosure be made, and it prescribes staturory duties for all agents.

So officially, if the buyer is not paying the agent directly, they are not legally a true buyers agent, and they by law are suppose to notify the buyer that there is no true agency agreement between them.

Quote:

Originally Posted by dlochart

My question is this, if a buyer (with an agent) sees my house online and asks to see it I know the agent has to legally take them to see it. If they want to put an offer on my house what does the agent do? Would they typically ask me for a commission? What if I say no?

My experience has been a call from and agent saying, "I have a client who is interested in seeing your house. If I show it to them and they buy it, are you willing to pay me a commission?" I typically inform them that they're welcome to set up a time to come see it with their client. At such time that they would present an offer, based on the strength of that offer, I'd be willing to consider compensating them.

Quote:

Originally Posted by dlochart

Also 'Rockinmommy' what does "close to full price' offer with good terms" mean exactly? I assume that they accept your full price but is that it?

thanks

Right, the price part is self-explanitory. Other things to consider... they may write in contingencies about selling their house before they can close on yours. They may or may not be pre-approved. They may not want to close for 2 months. They may want you to include appliances or other items that you didn't intend to include with the sale. To me "good terms" means that they're pre-approved, want to close in a month or less, the sale isn't contingent on any other houses selling or being bought, and if they're asking for things that normally wouldn't convey in the sale they're increasing the price accordingly. Of course everything varies from place to place across the country, and from transaction to transaction. What you don't want is to put it under contract with someone only to find out a month later that there's no chance of them qualifying for financing, or the house they're trying to sell is a pit and they're asking way too much for it. Does that help?