For Sale By Owner (FSBO) What To Do When You Have A Buyer

Hello Trisha,

Great tips!  Thank you for sharing.  We have 2 FSBO's going right now.  Hope you have a great week end.

Dawn

You wrote:

"But remember, a commission will need to be negotiated between you and the agent for their commission."

I disagree. 

This looks like it may turn into a very interesting conversation. I'm going to park here for a while.

FSBOs always make things interesting for a buyer's broker because sometimes they forget that we represent the best interests of the buyers, not the sellers. I had one who kept offering me money to help him sell his house but who wouldn't go into a listing agreement with me. I eventually decided not to touch it with a ten foot pole because no matter how many times I kept explaining to him that my managing the paperwork was about my customer being serviced, the seller felt that since I was handling both sides of the transaction that I was working for him.

We finally withdrew because I did not want the headaches involved in potential conflicts that might rear its ugly head over the un-permited construction that turned his basement into an illegal apartment. I wanted plans and permits filed and an updated certificate of occupancy that would make the conversion legal. I did not want my customer on the hook for having to tear it all out and restore it to its original condition because there were no architectural plans filed for the alterations made and the work was never inspected. The seller's solution was to offer me $5K in cash to continue the transaction. Pissed me the hell off... The owner claimed a licensed contractor did it and the work was okay. That made the situation worse in my eyes. I explained it all to my buyer and we ended negotiations.

Before I take a buyer to see a FSBO I make it clear that they are responsible for paying my firm and I make it clear that the seller may or may not also agree to pay my firm a fee. That does not let my buyer off the hook, but it may provide them savings if I decide to reduce their contribution by what the sellers is willing to pay. That is my negotiation option, not the buyer's. In New York a broker may be paid by both parties for the same transaction with the consent acknowledged and shared between both parties. It is best to get both sides to sign something in writing if they are both willing, able and agreeing to pay you for your time so when the squabbling begins about other items it is clear who is responsible what what portion of the commission payment.

Trisha ~ Wonderful post. It seems these days the FSBO are eager when a Realor calls. I haven't had a problem with the commission. In fact, I have listed a few homes from showing the FSBO properties.

FSBO's generally overprice their homes and don't have a clue what they are doing.  I always give them a disclosure which alerts them that my fee will be included in any offer brought by the buyer.  In addition, I suggest they have any attorney look over the purchase and sales agreement.  I don't think most FSBO's have a clue what to include in a contract.