Selling a House by Owner


Understanding Real Estate Agency


When selling a house by owner, you may be positive that you will have nothing to do with a real estate salesperson during the process. This page may still be worth reading and understanding.....let's say, "just in case." OK?


While writing Sell My House FSBO, it is my desire, to eventually cover every possible topic and situation, that you might run across selling for sale by owner.


Therefore, this page is all about real estate agencies, who represents whom and why you should care.


Selling a House by Owner

The Situation

You have been on the market selling a house by owner for 2 weeks when suddenly there is a real estate salesperson at your door. 



They tell you they have a couple that looked at your property last Saturday during your open house.



If you are looking for different information about Realtor's, you can select any one of the photo links below.

Realtor going over paperwork with couple in front of house

Finding a Realtor to Represent You

Stuffing flyers in front door mail slot

Types of Realtors that may Arrive at Your Door

Light blue percentage computer key

Real Estate Fees and Commissions

Pile of real estate documents, rider signs and calculator

Handling Realtors - Main Page

Gold house logo with red sold sign

Return to Home Page



The couple had been working with her and came to her, so she could show them the property a second time and probably put in an offer.


Now you have some choices to make, right? You could:


  • Tell her to leave and you aren't interested.

  • Tell her you would be happy to co-operate and pay a commission.

  • Tell her you would pay her a flat fee if she sells the property.

  • Tell the salesperson you would be happy if they showed the property and not discuss compensation unless she asked you first.


  • Tell her that you would be happy to let her sell the house, but she has to add her commission on the price.


  • Tell her it is your purchaser and the purchaser should come directly to you.

  • Whatever else you as the seller can think of not covered here. :)

What is a flat fee you ask? For information please go to Realtor Fees


Real Estate Agency Explained


Note: Before you proceed, the state, province, territory, or country you live in, may have different laws and by-laws concerning this subject. Unless you are certain of your own agent relationships in your particular area, I strongly advise you to seek out that information.



It's very easy and should be as simple as one phone call. You want to know the answer to the following question.


Q. Who does your company represent in a real estate transaction of real property. Is it the seller, the buyer, either party depending on who they represent in the transaction or is it neither?


If the answer is always the Seller, then where you live is still under the older system of "Seller Agency" from Common Law practices. This is becoming less and less common as it places buyers at an unfair disadvantage if the Realtor follows his or her fiduciary duties in representing their client.


If the answer is always the Buyer, then that particular office only owes all their legal duties to a buyer and never a Seller.


If the answer is, it depends and can be either the Seller or the Purchaser, then the agents will owe their fiduciary duties to the Seller when they list a property and to the Buyer when they are selling a property.


If the answer is Transaction Brokerage, the agents do not represent either party. They are to treat both parties fairly and follow a code of ethics. In other words, they facilitate the transaction without legal obligation to either party.



Note: It is my humble opinion, that the whole real estate industry will drift to a Transaction Brokerage. Agents will market properties and facilitate transactions between willing sellers and buyers.


Why? The waters get far to muddy and scary in any other type of brokerage. Again, this is only my humble opinion and time will prove me right or wrong. :)



The following assumes the real estate salespeople represent either the buyer or the seller.



So Far, So Good


Yes, you with your hand up in the back. :)



A Visitor's Comment

While I think I will go to a real estate agent, your advice was still so useful.

Dual agency is when a Realtor or, (and this is important), someone from the same agency sells a house to a buyer that is listed with that Realtor or, that same agency.

Various real estate agent tools and paperwork


An Example Please


I'll give you four for the price of one, OK? :)


A) Bob from LMNOP Realty 123 First Street list a house on the MLS system and then sells that house to a buyer. = Dual Agency


B) Bob from LMNOP Realty 123 First Street list a house on the MLS system and Sally from LMNOP Realty 123 First Street sells the house to her buyer. = Dual Agency.


C) Bob from LMNOP Realty 123 First Street list a house on the MLS system and Linda from LMNOP Realty 456 Tenth Street sells the house to her buyer. = Dual Agency.


D) Bob from LMNOP Realty 123 First Street list a house on the MLS system and Sally from QRST Realty 789 Fourth Street sells the house to her buyer. = NOT Dual Agency.


In fairness, each example in the descending order above can be viewed as less and less potentially damaging to the parties involved.


In other words, if Bob "double ends" and represents both the seller and the buyer in a transaction, that is much more likely to cause a problem than Bob listing a property that is sold by an agent from another branch of his office.


If you think it doesn't matter, let me ask you this. If you were getting a nasty divorce, would you want to use the same divorce lawyer as your spouse? I didn't think so.


This is why whether selling a house by owner, or through a Realtor, you should always have your personal representation.


Who Cares?


I should really say, who should care


You should care just in case when selling a house by owner you get involved buying, or selling, through a real estate salesperson.


In a perfect real estate professional world, the agent should only represent the party that they legally represent. A professional salesperson should also disclose to any party that they have contact with in a given transaction, a clear understanding whom they represent.


As an example, say Bob has listed a house at 123 Elm Avenue. Bob is in a contractual agreement with the seller and therefore, all of Bob's fiduciary duties lie with that seller.


Bob should not disclose any information, that would put his client at a disadvantage, to any other party, without the express written agreement by the seller.


A verbal agreement should be OK, except the seller could deny they gave permission later, so I would opt for the written agreement.


Again, Bob is legally required to disclose information such as serious defects etc.


Unfortunately, it has been my experience that we don't live in a perfect world and therefore as a seller, or a buyer, may I suggest the following:




Note: When selling a house by owner, never disclose any information to a Realtor that you would not disclose directly to the other party if they were standing right in front of you.


The exceptions are information you may be required legally to disclose, such as defects.


For those Realtor's that do play by the rules of disclosure, congratulations and keep up the good work.




You Represent Yourself


When selling a house by owner, you represent yourself. If a real estate salesperson brings you an offer, you still are representing yourself and they are representing the buyer.


So, making a statement to a real estate salesperson when selling a house by owner like; "We are asking $275,000.00 but we are willing to take $260,000.00 if push comes to shove", means that they not only have every right, but are legally duty bound to tell their buyer that information.

Guess what? You may just give away $15,000.00 when selling for no good reason! Not only that, but you will probably pay a selling commission on top of everything else!

Signing contract


In a Nutshell:


  • When talking to a real estate salesperson, treat them the same as you would when talking to a buyer, when it comes to price and terms of a sale.


  • If you are selling a house by owner, you don't have to sign a listing agreement with a Realtor. Agree on a single named buyer Flat Fee Agreement and only sign that type of agreement.



If the Realtor doesn't know what you are talking about, and you are selling a house by owner, have your real estate lawyer draw up the paperwork.


  • When you are selling a house by owner and you sign a 24 or 48-hour listing agreement with a Realtor, you are entering into a dual agency agreement with that Realtor, unless in your jurisdiction, they still practice Seller Agency.

  • Even if you are selling a house by owner, be aware of what type of real estate agency is practiced in your area. It's best to find out ahead of time before a situation arises.


  • Try to avoid paying a Realtor a flat fee or a commission, if you found the buyer and showed the property yourself. Sometimes it is worth biting the bullet, though, if the buyer insisted they buy through their Realtor.


For More Information about Using Realtors


Just select any of these photo links


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This website was built and is maintained by Douglas F. Cameron

Me working in our backyard


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