Selling FSBO, Buyer Using Agent

[Reese Thompson]

My cousin is trying to sell his house without using an agent (For Sale By Owner, FSBO). He called me a couple days ago saying that he received a verbal offer from buyers using an agent. He was frustrated because his intent of not using an agent was to save the commission. The conversation he had with the agent seemed to have a lot of focus on whether or not he would pay her a commission.

So I asked him, "Why would the buyers use an agent when you have it FSBO?" He said that they are first time home buyers, so they were nervous. Understandable.

So I recommended to him that since they are first time home buyers, they are most likely going to only want to pay the down payment and whatever other minor closing costs they have to so that they are using as little out of pocket as possible.  Because of this, he should say that whatever price they agree on, he'll divide it by 0.97 and give the agent the 3% (typical split commission if my cousin were to have used an agent), he's not losing anything extra, and the buyers have that cost tied into their mortgage and aren't out that amount themselves.

I'm curious what other techniques people have used if selling themselves and are approached by a buyer's agent?

[James Wise]

I'm not following you on the .97 thing. What exactly is going on there?

As for FSBO and real estate agents. This is how it usually goes down.

A buyer's agent begins working with clients. The agent always presents them properties that are on the MLS. Sometimes the clients see a FSBO on Zillow, Trulia or while driving around town. The clients ask their agent to show it to them. After getting off the phone with the client the agent usually slams their head into a wall or their desk then reluctantly calls the FSBO. The conversation involves the agent telling the FSBO that they have clients who are interested in looking at their home. The agent will then want to make sure they will get paid a commission (3% is common in this scenario) if they show it so they will ask the seller to agree to a commission if the agent's clients buy the property. I have my agents get this in writing prior to showing their clients.

If the seller does not want to pay a commission the agent would then have to work for free or ask their buyer clients to pay the fee. Working for free is typically not an option and the buyer client paying the fee is also typically not an option. This leaves the seller with two choices. Pay the agent the fee or have the agent and the agent's clients move onto another property.