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dlochart · Jul 11, 2008, 10:42 AM

My wife and I are pondering selling our house ourselves. We are beginning to look into how to do it and we have a neighbor that is a Real Estate agent that will assist us. I have a couple very high level questions. We are trying to avoid paying the 6% commission so that we can be more flexible with our prospective buyers.

1) I realize we do not have a brokers license so we cannot technically sell the house ourselves. That being said I assume that we will have to pay a brokerage fee to a broker.. is that correct? What kind of ballbark figure are we looking at? We are in the Baltimore / DC area. The figure does not need to be exact but an informed guess would be nice :)

2) Since we will be selling the house ourselves I feel that buyers agents might avoid us like the plague because there is no split of the 6% fee. Is this a correct assumption or will the buyers agent ask for a commission from us? If I am totally off base then how does this work?

Thanks a bundle!

D

progunr · Jul 11, 2008, 11:03 AM

I used forsalebyowner.com to sell a home about five years ago.

It cost me $1,000 flat fee.

It may have been slightly unusual in the fact that I already had a buyer, and just needed someone to handle the paperwork and loan closing.

Everything went just fine, but you are in a bit of a different situation in the need to possibly work with another real estate agent representing the buyer.

There are also many Attorney's that do pretty much the same thing as FSBO.com.

ScottGem · Jul 11, 2008, 11:09 AM

I sold my previous home and bought my current one without using a real estate agent. I don't think you need a broker, but you do need an attorney to draw up sales contract and protect you at the closing.

dlochart · Jul 11, 2008, 11:30 AM

Originally Posted by ScottGem

I sold my previous home and bought my current one without using a real estate agent. I don't think you need a broker, but you do need an attorney to draw up sales contract and protect you at the closing.

I am curious then why there are real Estate brokers and real Estate agents and the agents work for the broker because they do not have the brokerage license yet?

I hope I can bypass the whole thing that would be great!

I assume that a legal contract I get from a current Real Estate agent would not be good enough? I am not saying I don't want to use a lawyer just trying to see if it is necessary. Also could you please go into more details when you mean protect you at closing?

If I buy using a realtor then I assume the realtor is the one protecting me at closing?

Thanks

dlochart · Jul 11, 2008, 11:31 AM

Originally Posted by progunr

I used forsalebyowner.com to sell a home about five years ago.

It cost me $1,000 flat fee.

It may have been slightly unusual in the fact that I already had a buyer, and just needed someone to handle the paperwork and loan closing.

Everything went just fine, but you are in a bit of a different situation in the need to possibly work with another real estate agent representing the buyer.

There are also many Attorney's that do pretty much the same thing as FSBO.com.

Thanks I will check into them. So do they provide the Attorney / sales contracts / protection at closing for you? If so that is not a bad deal at all.

smearcase · Jul 11, 2008, 11:40 AM

Our biggest cost was advertising, but we put our house for sale right when the market took a dive. The house was sold by our ad on forsalebyowner.com, which was a trivial cost in comparison to newspapers. The guy who bought it had been watching the ad for months on fsbo.com. When the price got down where he wanted it, he came forward.
Our house took a while (almost 1 year) to sell, but three others in the development, being sold by realtors, never did sell. The realtors didn't keep the other sellers information boxes filled, didn't replace damaged signs, and couldn't respond for showings as quickly as we could.
We bought our replacement house from a seller who had a realtor for 6 months and released them, and sold it fsbo. But he had to wait for months to sell because of limitations in his former realtor contract. His sale in another state was even easier.
I would do it again in a heartbeat. My brother-in-law sold his own house in Baltimore County and had no problems at all, but he was fortunate to sell during the boom market.

dlochart · Jul 11, 2008, 11:46 AM

Originally Posted by smearcase

Our biggest cost was advertising, but we put our house for sale right when the market took a dive. The house was sold by our ad on forsalebyowner.com, which was a trivial cost in comparison to newspapers. The guy who bought it had been watching the ad for months on fsbo.com. When the price got down where he wanted it, he came forward.
Our house took a while (almost 1 year) to sell, but three others in the development, being sold by realtors, never did sell. The realtors didnt keep the other sellers information boxes filled, didnt replace damaged signs, and couldnt respond for showings as quickly as we could.
We bought our replacement house from a seller who had a realtor for 6 months and released them, and sold it fsbo. But he had to wait for months to sell because of limitations in his former realtor contract. His sale in another state was even easier.
I would do it again in a heartbeat. My brother-in-law sold his own house in Baltimore County and had no problems at all, but he was fortunate to sell during the boom market.

Thank you... you brought up another interesting question. Can you get your house into the MLS (Multiple Listing Service) without having a Realtor? Maybe I could use my neighbor to do that if it requires a license.

I am half tempted to go get my own license. Not sure if the company I would sell through would allow me to split the fee or not :D

ScottGem · Jul 11, 2008, 12:03 PM

Originally Posted by dlochart

i am curious then why there are real Estate brokers and real Estate agents and the agents work for the broker because they do not have the brokerage license yet?

A Broker owns an agency that deals with selling real estate. Agents or sales people work for a broker and can't work independently in most US states. But a broker is not required to process a sale.

dlochart · Jul 11, 2008, 12:08 PM

Originally Posted by ScottGem

A Broker owns an agency that deals with selling real estate. Agents or sales people work for a broker and can't work independently in most US states. But a broker is not required to process a sale.

Thank you! That seems like a total racket to me :)

ScottGem · Jul 11, 2008, 12:12 PM

Originally Posted by dlochart

Thank you! That seems like a total racket to me :)

Of course it is. But there is a significant amount of complexity to real estate transactions that licensing is not a bad thing.

sammyjk1 · Jul 12, 2008, 11:30 PM

You can sell your house yourself. You friend can't put it in the mls for you and you can buy real estate contracts at office max. you are right a agent helps protect your interest throughout the process, but they can't give legal advice. Hire a attorney. It's money well spent.

dlochart · Jul 13, 2008, 06:01 AM

Originally Posted by sammyjk1

you can sell your house yourself. you friend can't put it in the mls for you and you can buy real estate contracts at office max. you are right a agent helps protect your interest throughout the process, but they can't give legal advice. hire a attorney. it's money well spent.

Thanks, I believe we will use a lawyer because we will have to have a contingency in place (that we can find a suitable home) so it would be best to get that right. As far as MLS I think I can pay a broker to do it for me but with the internet that may not be necessary.

More questions:

1) Say a prospective buyer is using a buyers agent. Will that buyers agent steer him away from our home because there won't be pot of money for them?

2) In this situation would an agent ask for a fee or is it customary for me place a 2% or whatever fee when I put the house for sale.

I don't think a Realtor by law can refuse to show a property for sale but I know they do not have to recommend one if there is no brokerage fee that awaits after the sale.

ScottGem · Jul 13, 2008, 11:12 AM

A buyer's agent is paid by the buyer. They don't care about how the property is being sold. The only thing is a buyer's agent will generally find their listings through MLS. They may not search sale by owner sites. However, if they are good they might.

If the buyer goes to a realtor, they won't have your listing. A buyer knowing it's a for sale by owner will generally not check your home out with a realtor in tow.

dlochart · Jul 14, 2008, 08:53 AM

Originally Posted by ScottGem

A buyer's agent is paid by the buyer. They don't care about how the property is being sold. The only thing is a buyer's agent will generally find their listings thru MLS. They may not search sale by owner sites. However, if they are good they might.

If the buyer goes to a realtor, they won't have your listing. A buyer knowing its a for sale by owner will generally not check your home out with a realtor in tow.

I think I don't understand something. When I said 'buyers agent' I mean finding a real estate agent to help you (the buyer) find a house. You as the buyer do not pay this agent per se. They typically get 1/2 the commission from the selling broker. Does a 'buyers agent' mean something different than what I stated? I want to make sure I have my terms right.

ScottGem · Jul 14, 2008, 10:24 AM

A buyer's agent is something hired by and responsible to the buyer to help them find a house. The buyer is responsible for their payment. A seller's agent is responsible to the seller. I don't see what they would share the commission. I would see that as a conflict of interest.

dlochart · Jul 14, 2008, 10:59 AM

Originally Posted by ScottGem

A buyer's agent is something hired by and responsible to the buyer to help them find a house. The buyer is responsible for their payment. A seller's agent is responsible to the seller. I don't see what they would share the commission. I would see that as a conflict of interest.

Well when I bought my first home I contacted an agent to help me find a home and I did not have to pay her. She received part of the commission from the selling company/selling agent. Unless I truly did not get a buyers agent then this really is not all that beneficial for the client as they would have no interest in bargaining down the price of the house

ScottGem · Jul 14, 2008, 11:16 AM

If they weren't paid by you, they weren't a true buyer's agent. I suspect they only showed you listing from their agency.

rockinmommy · Jul 16, 2008, 07:44 PM

Originally Posted by ScottGem

If they weren't paid by you, they weren't a true buyer's agent. I suspect they only showed you listing from their agency.

Wherever I've ever lived this is not correct. A buyer's agent can negotiate a payment from the buyer in the case of a FSBO or something unique like that. But for 99% of the listed houses that they will lead their buyer to they are compensated (typically half, or 3%) of the price of the home. It's a separate line item on the HUD 1 closing statement listed under settlement charges. It will then say "division of commission" and list out which agency gets what. Then the total is listed under the column titled "Paid from Seller's Funds at Settlement".

They solely REPRESENT the interests of the buyer, but they are almost always paid by the seller.

Fr_Chuck · Jul 16, 2008, 08:00 PM

The actual legal term for buyers agent will differ by state. In some they have to be a paid agent who does not list property but only helps others find and deal with buying.

What you found was a real estate agent that you assumed was working for you, that showed you properties that their broker had listed but also other MLS properties. While they were not the listing agent, they are also for from a buyers agent, since their job is to sell you a house, not always work in your best interest. Also in those cases, the commission is split with 1/2 going to the selling brokerage, and 1/2 going to the buyers brokerage, in each case the broker gets a percentage, then the listing agent gets some, and then the selling agent gets some. So what most people call a "buyers agent" really is not, they are still a selling agent, just not the listing agent.
All real estate agents will try to sell you things they have listed first, things listed by their brokerage second, and then any other property.

If the buyer has a agent, when they make a offer on your home ( although most likely they won't since it is not MLS listed) when they make a offer, their agents commisison will be part of that offer to be paid at closing.

ScottGem · Jul 17, 2008, 05:47 AM

Originally Posted by rockinmommy

Wherever I've ever lived this is not correct. A buyer's agent can negotiate a payment from the buyer in the case of a FSBO or something unique like that. But for 99% of the listed houses that they will lead their buyer to they are compensated (typically half, or 3%) of the price of the home. It's a separate line item on the HUD 1 closing statement listed under settlement charges. It will then say "division of commission" and list out which agency gets what. Then the total is listed under the column titled "Paid from Seller's Funds at Settlement".

They soley REPRESENT the interests of the buyer, but they are almost always paid by the seller.

Maybe its different in your area. I am aware of that line on the closing statement. It's there because there are frequently situations where commission is shared, especially on MLS listings.

The usual scenario is Mr and Mrs Doe walk into the Century 25 real estate office and tell the agent they are looking for a house. This agent then interviews the Does to find out what they are looking for and goes through the listings for matches. The agent then takes the Does around to view the possibles. If they find a match and the Does buy, then the agent shares the commission with the listing agent.

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.