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For Sale by Owner News and Articles

For Sale by Owner Articles • - Negotiating for Home Sellers

Should You Pay A Buyer's Agent?

By Robert Irwin
As a "by owner" seller, you will undoubtedly come across buyers who want to purchase your home, but who want to do it through an agent. They may say they are inexperienced in real estate and really don't know how to handle a transaction. They would feel more comfortable working through a professional.
Of course, since you're selling on your own, you politely tell them that you're selling direct, without an agent. But, you point out that (hopefully) you've already contacted an agent and/or attorney who will handle all the paperwork, for a fee that you can split. And through a website like, you've linked to a home inspection service, mortgage broker, title insurance and escrow company, even a termite clearance company.
Still, they're afraid to go it alone and they leave. Then a couple of days later, an agent appears who says he has buyers who've already seen your home and want to purchase your it. But these buyers will only work through him. And he'll only handle the sale if you pay him a buyer's agent's commission. Obviously it's your buyer. Nevertheless, to make the deal should you work with the agent? How much should you pay?
First and foremost is to determine just how much money is involved. Typically buyer's agent's want half a full commission. Most of us make the assumption that the full commission is 6 percent, so a buyer's agent's fee would be 3 percent. (That's $9,000 on a $300,000 house.)
However, according to Real Trends magazine, which covers the industry, the average commission around the country is far from 6 percent. Indeed, it is closer to 5 percent and in some areas, such as the Northwest, it is as low as 4 percent. Therefore, a buyer's agent's half, depending on your locale, probably should be somewhere between 2 and 2.5 percent. (That's $6,000 to $7,500 on a $300,000 house.)
Now that you know what the cost is, should you pay it?
That really depends on how desperate you are to sell. If the agent's buyers are ready, willing and able to purchase, it might be worth the money to get a quick sale. Besides, though the buyer's agent probably won't directly handle your paperwork, he or she might help you out with any tricky parts to the deal.
On the other hand, you're a FSBO seller which means "For Sale By Owner." You can simply tell the agent, "Sorry, but I'm not paying a commission."
Now the buyers have three options. They can simply walk away and look for another home. They can pay their agent's fee themselves. (There's nothing to keep a buyer from doing this.) Or, they can work directly with you.
As a seller, I'm sure you'd love to know what the odds are for each option. Unfortunately, there are no reliable statistics that I know of. It usually depends on how desperately the buyers want your home... and how hot the market is. If they can't live without your property, or the market's so hot there's a shortage of good homes for sale, they'll probably move forward with the deal, the commission at their expense. On the other hand, if they see your home as only one of many fish in a pond, and the inventory of homes is large, they'll probably move on.
Remember that everything is up for negotiation. You might suggest that you'll split the buyer's agent's commission with the buyer. This could be just what it takes to make the deal!"
Robert Irwin is the most prolific real estate writer in America having produced over 100 published books in the field. His TIPS & TRAPS McGraw-Hill series has sold well over a million copies and his FOR SALE BY OWNER KIT and FIND IT, BUY IT, FIX IT and other books have been strong sellers for Dearborn.
In addition Irwin writes a regular real estate column for The Wall Street Journal online and is introducing a new weekly column
Irwin has sold his own property "by owner" and during over 30 years in the business has been a broker and consultant to lenders, agents, buyers and sellers.
He can be reached through his website

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