Absolutely, you want to pay that 3% to a buyers agent. Who do you think will bring you your buyers? Not many people buy a home without representation.

It is very common around here for a seller to pay that 3% for a buyer's agent (and they are saving the 3% on the sellers agent by going fsbo.)

I thought it was pretty common for a seller to pay an agent that brings them a buyer. You're still saving a TON and they handle a lot !!! It does not sound to me as if you should be going bare....this is the best of both worlds. You save half the normal commission, yet still have an agent handling the sale. WIN-WIN.

This post was edited by redcurls on Tue, Jun 4, 13 at 13:37

You can decline to pay buyers' agents, but so many people still use them that it's likely to limit your market if you don't pay their commissions.

Alas, this is the system we currently have. IMO it makes more sense for the buyers to pay their agents, because they're the ones getting the benefit. But when it's "free" to them, they're inclined to use them, which forces FSBO-ers to at least play half the system. Someday we may have a more equitable world, but in the meantime, you're probably stuck. Unless your market is super hot and people will seek you out to get their hands on your property.

Well, if you can find a buyer who doesn't have an agent, then you could split the 6% commission. In other words, keep in mind that a buyer, too, would like to benefit financially from a FSBO sale. In other words, if I bought a FSBO, I would not offer the same purchase price as for a sale with an agent.

Where do you have it posted? Your previous post indicated that you were putting it on Zillow and perhaps "buying" an MLS listing. Did you get it on the MLS? If yes, agents will expect to be paid.

NC: sure, but in the same vein the seller's agent bringing a sale-ready house to the attention of the buyer is a buyer benefit.

Ultimately the seller's agent is working for the seller's interest and the buyer's agent is working for the buyer's interest, so why shouldn't each pay their respective representative?

Ultimately the seller's agent is working for the seller's interest and the buyer's agent is working for the buyer's interest, so why shouldn't each pay their respective representative?

Because it would ultimately reduce the sales price of houses by a similar amount so it really makes no difference that the seller in effect pays it. As a practical matter, many buyers can't afford to turn over an extra 3% in cash to a buyer's agent. If they had to do so, they would simply consider it part of the price of the house and would lower their offer prices accordingly so the seller still gets 3% less in the pocket. In fact, one can make the case that at present the buyer pays that 3% since it is factored in as part of the price of the house.

When my buyer clients make offers on FSBOs, we always tell the seller that my fee is included in the offer so that the buyer doesn't have to pay it out of pocket.

If the seller strikes out the part where he agrees to pay my fee, we must reduce the price by the same amount.

It's sort of like the "seller pays (fill in the blank) toward buyer's closing costs".

The seller is paying those costs out of the amount the buyer pays for the house.

If the buyer didn't want the seller to "pay" those closing costs, he would offer less.

Actually, if I as a buyer had to pay 3% to a buyer's agent for their services, I'd think long and hard about the cost/benefit, and I might not use one. Or I'd look for a few people to parcel out some of the work, like an attorney to write the contract, or someone to do the negotiation if I weren't comfortable with it, or whatever. (In what other industry is it cheaper to hire a lawyer to do the paperwork?)

You guys are all talking as though it's just a given that every transaction has to have a 6% transfer to real estate agents, so all we need to do is figure out who pays for it. I'm talking about breaking that paradigm because I think that's way too high a transaction fee, and I would love for that system to become more efficient, letting both buyer and seller keep more money in their pockets instead of handing it over to layers of agents and brokers. One thing that keeps it perpetuating is that sellers pay buyers agents, so the buyers keep using the "free" service, so sellers continue to find it hard to sell without using the real estate industrial complex. Vicious cycle.

I didn't mean to hijack this thread, or to start another debate on the topic. I'll crawl back in my shell again. Sorry.

I think the 3% is an anachronism which hopefully will be something of the past sometime soon. Realistically, the rate can be negotiated. You can either do it yourself, or here in California there are sites like HutMut which help buyers and sellers find agents who are willing to scrap the 3% and go with a more negotiated fee depending on transaction price and services rendered.

I really think the current fee structure is broken and bears no relation to actual market forces.

I am not an agent and never want to be. I tried the FSBO route before the internet was invented. It did not go well. Many only see that 6% an agent earns then splits with another agent then kicks up to the broker, then takes their expenses out of from marketing to fuel, and, and, and.

When a buyer drags an agent around to dozens of viewings and never buys we don't see that. Or the seller turns down fair offers then takes the property off the market. That 3% on a 200K home to me becomes measly.

Believe you me, it is well deserved. I wonder what an agent makes per hour?

We've moved off topic. But, while we're here...

6% isn't that much on a 100 or 200k house. However, in my area, you don't find much of ANYTHING for under 275k (I'm talking 2bd 1b tear downs) and median price right now is 417k county-wide with condos at a median price of 235k. We're in double digit percentage increases from last year. In April (already 2 months ago) our local (Eastside) median price was 552k.

In a market like this, 6% doesn't make sense, imo. Homes are selling within days of being posted on the MLS often with multiple offers. How is an agent selling a 600k home in 2 days working harder or longer hours than someone selling a 150k home in a rural area over the course of several months?

Even in pretty much the same area, you have a wide range of prices, so I agree that a percentage is not appropriate. In my area, houses sell for 1 mio with multiple offers within a few days. On the other hand, a small studio about 7 miles further out goes for 140K. It's not like the agent spends 7 times more time on the house sale than on the condo sale. In a seller's market, the buyer's agent actually spends more time than the seller's agent.

Regardless of the debate issues, if the OP doesn't agree to pay the 3% to a buyer's agent, there is unlikely to be a buyer.

And unless the OP pays a seller's agent to put the home on the MLS, there isn't enough visibility to buyers to have a sale either.

Seems to me to be pretty straightforward: If FSBO sellers can find a buyer without an agent, then they don't need to pay any commission. If they can't, then a 3% commission obviously is justified.