FSBO: for sale by owner post Aug 2024 commission changes

[Edgar Perez]

I am considering putting my personal residence condo up for sale and am curious how the recent agent commission change in process impacts sellers in for sale by owners.  My understanding is previously the norm was sellers were still “expected” to pay buyers agent commission but now that the norm could be shifting is that still part of the buyer/seller negotiation?  How are we seeing this rule change play out in practice?

Tags: Kenosha Wisconsin fsbo agent realtor 

[Russell Brazil]

Most real buyers will have agents and will put it in their offer that the payment for the buyer agent come from the settlement funds.

[Christopher Robert Noland]

Quote from @Edgar Perez:

I am considering putting my personal residence condo up for sale and am curious how the recent agent commission change in process impacts sellers in for sale by owners.  My understanding is previously the norm was sellers were still “expected” to pay buyers agent commission but now that the norm could be shifting is that still part of the buyer/seller negotiation?  How are we seeing this rule change play out in practice?

Tags: Kenosha Wisconsin fsbo agent realtor 

 Legally you were never expected or bound to offering the commission.

Now you can simply only pay the selling agent, and the buyers agent has to inform the buyer that they might have to pay - in an ideal world....

The risk of not offering to pay the buyer side is the buyer can tell their buyers agent to skip houses where they would have to put out for the commission, it may result in less offers on your home.

It is now ultimately up to the seller, but in a for sale by owner.... you are not signing any listing agreement with a listing agent so, again the buyer's agent would need to pay the agent.

If you are an agent selling your own home off-market FSBO, check your state laws on disclosure etc.

[Lynn McGeein]

@Edgar Perez it doesn't affect FSBO; just can't state commission amount offered to buyer's agent in MLS any more. If I were selling FSBO, I'd still probably price it to expect offers asking at least 2% in either closing costs or buyers agent fees, more if it's a good first-time buyer area. If you won't pay any closing or agent fees, I'd suggest stating that up front so everyone knows what to expect before showing or writing an offer. Saves everyone a lot of time.

[Joe Norman]

Nothing has changed for FSBO. Sellers (represented or FSBO) were not previously required to pay a Buyer's Agent's commission and still are not with the new rules. Most did, and most still do, but it was never a requirement.

Every state is going to be a little different in terms of forms and procedures, but expect any buyer who is represented by an Agent to include a request for you to pay some or all of their agent's commission with their offer just like they would have prior to the NAR settlement.

[Peter Falk]

I am a Realtor in Madison, WI and so far as stated earlier, other than an offer of compensation no longer being listed in the MLS, not a lot has changed as far as sellers typically being agreeable to pay buyers agents at closing a buyer agency commission, and sellers just viewing that as a closing cost and focus on reaching a net proceed number they are happy with (if competing, one buyer may ask you to pay their buyer agent fee, but at a higher price where you could still net more than a lower priced Offer). In Madison, and I assume your market, we have always had discount broker options to basically just get your listing on the MLS and not much else as well as sellers just exposing it to the market themselves off the MLS and hoping to maybe pay no buyer agent commission, where the buyers have no agent they are working with or the buyer agrees to pay their agent directly. You can always add on the commission you are willing to offer to your asking price and let the buyer finance that with their mortgage/purchase price paid and negotiate commission along with other Offer terms as Offers come in. The marketplace is always evolving, so may eventually see more listings where sellers only set their listing agent commission for marketing the property and negotiating on their behalf, and not offer any buyer agency fee up front, and just settle on that in the Offer the buyer agent brings them.

[Rick Albert]

I wouldn't worry too much about it. Most FSBO properties sell for less than what they would be paying in commissions anyways. 90% of buyers are working with agents and never think to look on FSBO websites. Most your leads are going to be investors who want a steep discount anyways and they may factor in the savings in commissions (meaning you technically aren't paying but it is still factored into the price).

I know this because years ago as an experiment I had posted my condo for sale as a FSBO. I only got Realtors trying to get the listing and investors who flat out said upfront they want discounts on the price.

[Edgar Perez]

Thanks everyone by no means am I opposed to paying 0 in closing or buyer agent fee's and this thread helped provide clarity on what to expect. My thought process with going FSBO is my market research tells me my condo is in high demand as it is the lowest cost to home ownership (starter homes are going 250K+ condo will be 140ish) and in the last 6months 3 similar have sold going contingent in less than 2 weeks. I am also involved with two local REIAs and thought I could market to them and the agents their to bring their buyers

[Rick Albert]

Quote from @Edgar Perez:

Thanks everyone by no means am I opposed to paying 0 in closing or buyer agent fee's and this thread helped provide clarity on what to expect. My thought process with going FSBO is my market research tells me my condo is in high demand as it is the lowest cost to home ownership (starter homes are going 250K+ condo will be 140ish) and in the last 6months 3 similar have sold going contingent in less than 2 weeks. I am also involved with two local REIAs and thought I could market to them and the agents their to bring their buyers

Were those that went contingent FSBO or marketed by agents? Big difference because properties listed in the MLS are syndicated to the top websites.

Keep in mind if you advertise to investors, then they are paying investor prices. That's fine as long as you are okay with it.

I don't really care because I'm not in your market. I just want you to be the most informed so you make the most amount of money.

[Edgar Perez]

@Rick Albert 

Thanks Rick that is a good point they were MLS properties, my point about the REIA was more so to bring the property in front of the Agents in the group that work with traditional buyers that maybe haven't had luck finding homes on MLS either due to budget or competition

[Rick Albert]

So you are willing to pay a commission, willing to work with agents, limit the exposure of the property by just the few networking groups you are a part of and expect to sell at the same price as those fully advertised across the platforms that 90% of buyers see?

Again, I don't have any skin in the game since I'm based in Los Angeles. I am just trying to understand the logic.