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  Who pays the commission?
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posted
If I'm selling my house on my own and a potential buyer comes to look at it and then mentions that they are working with a Realtor, who would pay the commission to the Realtor? The buyer, or me, the seller?
I assumed I would pay a commission(reduced, like 2.5% or something) , but I've been told that the buyer pays it.
 
Posts: 774 | Registered: Dec 13, 2002Reply With QuoteReport This Post
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Usually the Realtor will negotiate their fee( 2 1/2 to 3%) with the seller before they show the house- usually called a "show and sell agreement". In rare cases a buyer may pay the commission.
 
Posts: 3106 | Location: Michigan and sw Florida | Registered: May 16, 2007Reply With QuoteReport This Post
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Most FSBO sellers disclose whether (or not) they're cooperating with realtors in their RE listing and/or advertising. Many do cooperate in order to (hopefully) reduce their days on market and increase the number of showings to qualified buyers. Typically, if cooperating, the FSBO seller pays 50% of the standard commission for their area, often 3%, to the buyers' agent.

So, in your situation or hypothetical, cheekaboom, you're saying a buyer individually toured a home without an agent present and the sellers' (or your) FSBO listing was silent on the issue, correct? Because you had no prior agreement with the buyer's agent and apparently made no offer within either a listing or your advertising, it depends on the agreement between the buyer and their agent. So, the buyer would normally pay any agreed upon amount to their agent, usually 50% of the standard commmission in their area, pursuant to that agreement. In practice, the buyer would most likely deduct the amount of that commission from any offer presented.

In summary, you're correct - in the situation you described, the buyer would be responsible for the commission.

Hope that makes sense - JMHO and good luck!

This message has been edited. Last edited by: BearCat49,
 
Posts: 168 | Registered: Sep 21, 2012Reply With QuoteReport This Post
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Ah, I see. Thank you both for explaining; that makes sense to me. It seems that in reality, either way the seller is actually paying the commission. In the first case that you stated, BearCat, the seller clearly pays it, and in the second case it is sort of hidden because the buyer's offer is based on a deduction of the commission owed by the buyer to her Agent. It's all good, as far as I'm concerned, but I feel better educated on that scenario now.
 
Posts: 774 | Registered: Dec 13, 2002Reply With QuoteReport This Post
Picture of real estate lady
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oh, brother!
 
Posts: 9242 | Registered: Aug 14, 2007Reply With QuoteReport This Post
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quote:
Originally posted by jacobwilson8:
In most of the cases the buyer pays the commission to the realtor, not you which ever corner of world you go into the person who contacts the realtor then the realtors shows him the house that are under him for sale.

Get real and get your facts straight.
 
Posts: 3106 | Location: Michigan and sw Florida | Registered: May 16, 2007Reply With QuoteReport This Post
Picture of rker321
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REL LOL, LOL, another well informed individual. LOL
 
Posts: 4988 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
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For a little further clarification, yes my home was listed FSBO. I paid to be listed on the MLS. Along with that came a statement of what I would agree to pay a showing agent, should their client buy from me. BUT a lovely couple showed up on their own, without their agent, at my Open House. They hadn't planned to come but happened to drive by and decided to stop. After they phoned other family members over to our Open House to get their opinion, the couple mentioned that they have an agent. I was not sure of the correct protocol in this case, since their agent hadn't brought them.

If you'd like to know the ending to this story, an offer was made that evening. The agent chuckled that it would be the first time that he had written an offer on a house that he had never seen. So he asked to come over to meet us and to see our house so that he could properly advise his client. We paid him his commission and didn't mind doing so, as his client's family made the process difficult and slow, and we appreciated his intervening; and he did things for us that normally a listing agent would do. Everyone is happy and all is well!
 
Posts: 774 | Registered: Dec 13, 2002Reply With QuoteReport This Post
Picture of real estate lady
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well of course, your paid the buyers' agent through your MLS listing agreement.

Oh, brother.
 
Posts: 9242 | Registered: Aug 14, 2007Reply With QuoteReport This Post
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My apologies, relady. I kind of regret writing that whole follow-up now. In retrospect, now that I can stand back and look at everything that ultimately transpired, my original question does look idiotic. Someone who works on commission did a job; he should be paid his commission.

Although we've bought and sold before, this was a first time for us using the MLS on our own. We have actually sold another home in the past on our own, but without the help of MLS or any agents whatsoever. The buyer called his attorney over during the Open House, along with family members mentioned earlier. We figured the attorney was acting as sort of the agent. We didn't know there was an actual agent until after the buyers, attorney and family had spent nearly 3 hours looking over every square inch; then they mentioned it. The family considered just leaving the agent out of it altogether. My confusion came at the point when the buyers ultimately decided to get their agent involved in the sale. As I said, my sale before this house was done privately, to a couple who also came on their own and did not use an agent; their and our attorneys handled everything and we paid zero commission (as a side point, that is exactly how we bought this house also). And sorry, but to be very honest, that scenario was looking pretty attractive again. So now here we were faced with the question of paying commission to an agent who had not found, shown, or even seen our home. Coupled with the fact that I had been told by a well-meaning "someone" that if there was no agent present to show his clients our home that we would not be responsible for paying commission. Plenty of agents came to the Open House and at other times to show it to their clients and of course it never occurred to us NOT to pay THEM! My question and motivation was not about gypping anyone; we just wanted to do things the right way and not be taken advantage of, either.
 
Posts: 774 | Registered: Dec 13, 2002Reply With QuoteReport This Post
Picture of Charming
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Thanks for clarifying Cheekaboom. The buyers probably had a signed agreement with a real estate agent that required them to keep the agent involved in a real estate transaction. If you were an actual agent holding an open house for a client your first question of anyone crossing the threshold would be if they were working with a real estate agent. Depending on their answer will determine what follows.

On another discussion board for real estate professionals there is a very heated discussion about just what you did. Paid the MLS to use the system. It is not a popular concept with most agents is all I will say.


Fun and Info
 
Posts: 3456 | Location: Coastal SC | Registered: Jan 10, 2006Reply With QuoteReport This Post
Picture of BMichel
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This is a major reason why good Realtors are assets. There are soo many things that can go wrong. Each transaction is different and has its own complexity. You don't know what you don't know until something goes wrong. Depending on your situation, you should walk away with what you need. Have you sat with an agent to determine how much you need to net in comparison to what you can get on the sale? Is there another option to getting where you need to be? Is the commission worth the risk of what could go wrong? I know you are saying, "Spoken like a Realtor!" But calculate the variables.
 
Posts: 10 | Location: Arizona | Registered: Nov 17, 2013Reply With QuoteReport This Post
Picture of real estate lady
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I would venture to say that buyer most likely would not have used your agent to write a contract, as most buyers know the value of using their own buyers' agent. Sorry--sounds like your agent may not have reviewed the MLS agreement with you thoroughly enough.
 
Posts: 9242 | Registered: Aug 14, 2007Reply With QuoteReport This Post
Picture of Charming
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quote:
Originally posted by real estate lady:
I would venture to say that buyer most likely would not have used your agent to write a contract, as most buyers know the value of using their own buyers' agent. Sorry--sounds like your agent may not have reviewed the MLS agreement with you thoroughly enough.


REL - In some markets the MLS is not owned by the Realtor's Association and will allow private individuals to list a property without benefit of an agent. A very heated discussion about it on other forums. Not a very popular topic with the pros. Wink

For now in my area an individual must at least go through one of those discount brokers that are basically there to get your listing onto the MLS. That is still is throwing an unsuspecting seller into the pool with the sharks.


Fun and Info
 
Posts: 3456 | Location: Coastal SC | Registered: Jan 10, 2006Reply With QuoteReport This Post
Picture of real estate lady
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YIKES! Had no idea and never heard about that.
Time to move to Florida Charming.
 
Posts: 9242 | Registered: Aug 14, 2007Reply With QuoteReport This Post
Picture of Charming
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quote:
Originally posted by real estate lady:
YIKES! Had no idea and never heard about that.
Time to move to Florida Charming.


Thanks REL, our local association controls the MLS we use so the listing agent must be a member and they still have to meet the requirements and pay all their dues.


Fun and Info
 
Posts: 3456 | Location: Coastal SC | Registered: Jan 10, 2006Reply With QuoteReport This Post
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