Realtor^® Fees

How to Handle when For Sale by Owner

Realtor^® Fees, or real estate agent commissions may come up when you are for sale by owner. On this page we will cover the following:

* When a Realtor^® approaches you and says they have a buyer.

* Why you should never sign a "listing agreement" when for sale by owner.

* Keeping certain information from a Realtor^® and why.

Let's look at each of the above.

I have a Buyer

Will you Pay me a x% Commission?

* Has the real estate agent shown your property?

- If the answer is no, how do they know that they have a buyer?- If the answer is yes, then you can take this much more serious.

* Has the "buyer" actually seen the property with you and then ran to their real estate agent to write up an offer?

- If this has happened and you are able to find out, this is great information for you to have. Why? You are in a stronger position to negotiate Realtor^® Fees.

When the real estate agent approaches you, pay close attention to body language. Listen carefully to what they say and how they act.

Are they nervous or failing to make eye contact? If this is the case, there is a good chance the buyer approached them after they viewed the property with you.

Ask the Realtor^® lots of questions about "their" buyer. If this real estate agent hasn't seen your property before, ask why he or she thinks your property is suitable.

Ask them if the buyers have been qualified yet for a mortgage. If they say yes, which they probably will, ask where. See if they squirm.

Ask them directly if the buyer has already viewed your house without them. Watch how they react. Don't be shy here. You are in the driver's seat and they know this.

Of course you always have the option right off the start to say, "No, we are not paying Realtor^® Fees."

Never Sign a Listing Agreement

Be careful. By signing one of these forms, you could find yourself paying a Realtor^® Fee even if you found the buyer yourself during the time frame.

I'm not saying that many real estate agent would take advantage of this, but play it safe.

What you should agree to, if you decide to cooperate with a real estate agent, is a Flat Fee for a specific amount of compensation.

The paperwork for this type of Realtor^® Fees should specify:

* The name of the buyer and their address.

* The time in which the buyer has to make an offer on your property and the offer being accepted.

* The amount of the flat fee in an exact amount. An example might be; $2,000.00 plus any taxes that might be applicable.

Let me explain. You knew I would right? ;-)

When you are for sale by owner, you represent yourself. The real estate agent represents the buyer. If you agree to a certain percentage instead of a flat fee, this could be felt to be a conflict of interest between the Realtor^® and the buyer. Huh?

The reason is, the higher the sale price, the higher the Realtor^® Fees would be and therefore this could be interpreted as not looking after the best interest of the Realtor's^® client, which in this case, is the buyer.

Another problem with entering into a "listing agreement" with a Realtor^® is, the Realtor^® is now in a legal contract with you and has promised to represent you as a client.

Now it just gets messy. The Realtor^® has entered into a dual agency agreement with 2 parties, that have totally different objectives. There was absolutely no reason to do this.

The "Flat Fee" agreement with a set amount of compensation, eliminates all these problems.

If there is any Realtors^® reading this and you weren't aware of this solution, I hope this helps you out when you are trying to sell a for sale by owner property.

When you are negotiating the flat fee amount, a good idea is to take the upper hand. Look the real estate agent straight in the eye and say something like this.

"Mary, I'll be happy to pay you a flat fee of $2,000.00 upon completion of the sale of my property to your buyer."

Now, don't say a single word and don't argue. Just wait patiently for a positive response. The amount of course is up to you.

If they come back with say their Realtor^® fee is $5,000.00, you might respond in this way. "Well Mary, I guess unfortunately we can't do business. I do appreciate you stopping by though."

Then....you got it! Don't say a word and wait for Mary to speak again after an awkward silence.

For a refresher on some negotiating techniques, you can go from Realtor^® fees to real estate negotiation

Do NOT Disclose

When a real estate agent gets involved with you, the for sale by owner and wants Realtor^® Fees, be careful what you say!

For example: Probably not a good idea to say, " We are asking $275,000.00 but we are negotiable with that price."

Why? Because the Realtor^® will not only tell the buyer this, but actually they are obligated to disclose this information if they are representing the buyer.

There are no secrets between you, the Realtor^® and the buyer.

Here is how to remember what not to say.

Do NOT tell the Realtor^® anything you would not tell the buyer, if they were standing right in front of you

The Realtor^® may be a very nice person and make you feel they are your best friend. Trust me, they aren't when it comes to a real estate transaction!

Negotiating the Realtor^® Fees

If for some reason you decide to list with a Realtor ^® instead of continuing for sale by owner, keep one thing in mind. Realtor^® Fees are negotiable.

The real estate agent you talk to first may not be flexible, but another Realtor^® may well be more willing to negotiate a commission.

If the Realtor^® tells you something like the following: "If you list with a lower commission rate, none of the agents will show your property", do me a favor. Report that Realtor^® to your local real estate board and complain. Thank you.

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