Buyer Agent Commission FSBO

[Isaac Black]

I found a house on my own and have done 100% of negotiations thus far by myself. The seller is a FSBO obviously, I'm figuring I'm going to have to pay my agent a commission but can I figure that commission into my loan? Do I owe him 3% considering what work I have done? He said he can handle all the paperwork for closing and offering once I decide to proceed with the house which is what the fee would be covering in terms of services.

[Account Closed]

Originally posted by @Isaac Black:

I found a house on my own and have done 100% of negotiations thus far by myself. The seller is a FSBO obviously, I'm figuring I'm going to have to pay my agent a commission but can I figure that commission into my loan? Do I owe him 3% considering what work I have done? He said he can handle all the paperwork for closing and offering once I decide to proceed with the house which is what the fee would be covering in terms of services.

 Normally the seller pays the agent's listing fee. If you signed an agency (buyer's representative) fee with your agent, you pay that fee. If neither of those is true, it is up to you to decide if the agent earned any commissions and how much. 

Your loan will be based on the lower of the asking price or the appraisal. Yeah, bummer I know, but that is how it's done. You would have to increase the selling price, if the seller was willing to do that, to cover the agent's fee in the financing, provided that the price didn't exceed the appraisal. A little complicated, but not too bad.

If you found the house on your own and the agent didn't put any time into bringing you up to speed on the market, locating the property, negotiating the price and terms, then paying the agent simply to open escrow is a bit extreme to be paid for. 

All that escrow needs to be opened is a purchase & sale agreement, which frankly can be picked up at Office Max or Staples, fill the thing out, price, closing date, who the parties are, the address. Take it to an attorney to complete the details.

If you will be doing this for a.) Investing, it is a good idea to use a real estate agent this time and learn from them.

If this is for b.) a "one up" (the only purchase you plan on making) an attorney can do the same thing for $800 to $1000.

The hardest part of the whole thing is finding the property and negotiating price and terms.

Congratulations.