You just found an awesome home. In fact, it has all of the features you’ve been looking for including a huge backyard, your dream kitchen, and even a two car garage with enough storage space for all of your gardening tools. However, there is one problem… The house isn’t listed with a real estate agent. Your potential dream home is FSBO. That’s right, it’s a “For Sale By Owner” property, meaning that the owner is selling the property without the help of a listing agent. You’re not sure how to navigate this territory, are a little nervous, and don’t want to be on the hook for the buyer’s agent’s commission. You know you still want to work with a buyer’s agent and understand that your agent deserves to get paid their usual commission, but with a FSBO, who pays the buyer’s agent? Generally speaking, the seller will still pay the buyer’s agent commission when selling their home FSBO. In this article, we will go over your burning questions and what to do in the event that the seller is unwilling to pay your agent’s commission. A FSBO is a home that is for sale by owner, meaning a real estate agent, also known as a listing agent, is not representing the seller in selling their home. Instead, the seller has chosen to sell the home themself. According to NAR’s 2021 profile of home buyers and sellers, 7% of home sales were FSBOs. Just because a home is a FSBO, that doesn’t mean that you should run. There are pros and cons of buying a FSBO home, but it’s still worth checking out if it meets your homebuying criteria. There are many reasons why owners choose to list their homes as FSBO including: However, just because the seller isn’t working with a real estate agent doesn’t mean the buyer can’t. In fact, it’s always encouraged to work with a real estate agent during every real estate transaction. Your agent can give you feedback on home price, set up inspections, help with negotiations, and explain contracts, among other services. Generally speaking, the seller will pay the buyer’s agent’s commission and this is usually disclosed in the FSBO listing. The listing description may say something along the lines of ‘buyers agents welcome’ and then it may mention how much commission the seller is willing to pay. For example, a FSBO seller may be willing to pay between 2% and 3% of the purchase price as a commission to the buyer’s agent. In this case, they are still saving money by not paying another 2% to 3% to a listing agent. Sellers typically know that if they don’t offer a commission, or aren’t willing to cooperate with buyer’s agents, these agents might not show buyers their home. Additionally, the seller may not be that familiar with completing a real estate transaction, so the buyer’s agent is a valuable asset here as well. Although they don’t represent the seller’s best interests, buyer’s agents can still write up the purchase contract, start negotiations, and guide the buyer through the homebuying process. In the unlikely event that a seller flat out refuses to pay your buyer’s agent their commission, then you have a few other options. You can consider the following: It is more common for FSBO sellers to agree to paying commission to a buyer’s agent than it is for them to refuse. According to Ed Villeda, who has completed 16% more sales than the average Stamford, Connecticut agent, more than half of FSBO sellers will pay the buyer’s agent commission. If for whatever reason, the seller won’t pay the commission, it’s still not recommended to purchase the home without the help of a buyer’s agent. Buyer’s agents are essential to real estate transactions for so many reasons including: Villeda says that “agents don’t just open houses. They provide a lot of information, historical information, details on the neighborhood, and their real estate expertise. They also pull comps (comparable sales) to show what other houses nearby have sold for.” Another thing to keep in mind, is if you already signed a buyer-broker agreement, you need to know what would happen if you decide to end the contract and buy a house without them. You could be charged a cancellation fee or penalty for ending the agreement early or for purchasing a house without using their services. Read over your agreement (and it couldn’t hurt to consult an attorney) before making a decision. Don’t be scared to buy the FSBO house. Most sellers are motivated to sell their home quickly and realize that cooperating with a buyer’s agent will help them do just that. Work with a top buyer’s agent so the process goes as seamlessly as possible and if the seller won’t budge, be creative, and see if buying the house is still feasible and you still feel represented in the deal. If not, it’s ok to walk away.What does FSBO mean?
Who pays the buyer’s agent commission during a FSBO transaction?
What if the seller won’t pay the buyer’s agent commission during a FSBO transaction?
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