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Steve McLinden, the Real Estate AdviserPaying agent's commission may help FSBO sale

Dear Real Estate Adviser,
If the buyer of a FSBO house has an agent, am I -- the seller of the FSBO -- required to pay commission to the buyer's agent? What if the buyers are willing to pay full price?
-- Amy
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Dear Amy,
You aren't required to pay a dime. But there are circumstances where you might want to contribute funds in the interest of making a sale, particularly if your FSBO has been on the market awhile and the buyers are willing to pay close-to-full price for it.

For example, if a prospective buyer, using an agent, is serious about purchasing your home, that agent might ask you to pay some kind of finder's fee, if not straight commission, for bringing you the buyer. If you balk at that arrangement, the buyer would be forced to either pass on your home or pay the agent the full commission themselves. That's probably a deal-killer, unless you have proffered significant reductions in price.

In any event, be sure to remind the buyers and their agent that you are, after all, selling FSBO, but that you might be persuaded to forge a compromise, depending on the terms.

But also realize that sellers traditionally have paid commissions to the buyer's agent. So buyers and their agents have come to expect at least some contribution from the seller's camp in a home sale -- although the FSBO trend has changed that mindset somewhat.

If you can strike a discounted commission deal with the buyer's agent that includes her tending to the many little details of closing a sale, then that's a bargain -- at least at face value -- unless you're unusually savvy about real estate and are comfortable doing it yourself. However, the more you rely on the buyer's agent, the more you put her -- and you -- in a possible conflict-of-interest position, since she is really not your agent, even if you are using her for some agent services.

If you are paying a real estate service to list your FSBO home on the Multiple Listing Service to gain broader market exposure, you will likely be obligated to pay part of a commission anyway -- about 2 percent -- as a condition of the arrangement.

With enough of these add-ons, you might be sacrificing most of the gains you thought you'd enjoy by going FSBO in the first place.

It's hard to say how many of these scenarios, if any, will apply to your sale. But if you are sitting in a seller's market, you stand to fare a little better going FSBO. If you're not, you may have to make significant concessions. As in any real estate deal, the devil is in those details.

Happy selling!

To ask a question of the Real Estate Adviser, go to the "Ask the Experts" page, and select "Buying, selling a home" as the topic.'s corrections policy -- Posted: March 18, 2006
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