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Selling your home "For Sale By Owner" increases your profit and decreases the amount you owe at closing. Even though selling FSBO saves you the listing agent's fee, you still may end up paying a buyer agent's commission, especially if she brings a ready, willing and able buyer to the table. Ultimately, how much you pay the buyer's agent depends on how much assistance she provides to close the deal.
Buyers' agents endeavor to show their clients the full range of available homes in their target area, which includes broker-listed and FSBO properties. If a buyer's agent, who has entered into a buyer-agency contract with her client, shows your home to a fully qualified buyer and the buyer wishes to put a contract on it, you may have to pay the agent's commission, usually around 3 percent of the final negotiated home price in a one-sided transaction. In exchange for the standard commission, the agent facilitates contract negotiations and coordinates most aspects of the closing. This approach works well when you and the buyer have some experience buying and selling homes but may not be comfortable negotiating the various complications of real estate transactions.
Fee for Service
If you are an experienced home seller, meaning that you know how to do everything required of a seller for a successful closing, you may only need limited assistance from the buyer's agent. For example, you may only need the buyer's agent to provide a filled-out the contract on behalf of her client. In such cases, pay only for the services you need. You can find out the fair market value of individual real estate services in your area by reviewing a local fee-for-service real estate broker's fee schedule. This approach works well when the buyer's agent has previously agreed to pay the agent's commission out of his own pocket.
Most real estate fees are negotiable. Generally speaking, you should place information about the commissions or fees you are willing to pay a buyer's agent in your property's printed brochure. This eliminates surprises on both ends and lets interested parties know how to approach negotiations up front. If you are on the premises when a buyer and his agent come to view your home, steer clear of discussions about prices, commissions and fees to avoid misunderstandings down the road.
Contract the services of an attorney who you can consult with questions related to your real estate transaction, even if you are selling your home by yourself. All commission and fee offers and counter-offers should be presented in writing on the original sales contract. The closing agent will pay the buyer's agent's fee to her broker, who will then pay her according to their agreement.
- House For Sale image by TMLP from Fotolia.com