I currently have my home for sale by owner and I have been contacted by a real estate agent from the area that has a prospective buyer interested. The agent asked me up front if I would be willing to work with her and I said yes depending on commissions. I had always figured I would work with a buyers agent if it came to that. We worked out the commision % and she will be showing my home to the buyer. She also stated that she had the contract papers if I needed them to use for the deal. The buyer that is interested has a preapproval letter for more than what I am asking for the house.
My question is what should I expect from the agent acting as the Buyers Agent? Am I paying for them to bring me the buyer and supply me with the contract papers? Or should they work to get all the paper work done throughout the deal? Do I need to get a lawyer to represent my end of the deal or will having this agent involved take care of the legal end with the experience they will bring.
I searched the archives but did not find anything specific dealing with the buyers agent responsibilities. Thanks for any information you can prvide me.
It would be best for you to hire a lawyer to review the contract and represent you at the closing. You’re taking a real risk by doing it all yourself. The buyers’ agent has no responsibility to you, and in fact is obligated to get the best terms possible for his client. The cost of a lawyer is small in comparison to the potential cost to you if things go wrong.
No, a buyer’s agent is the representative of the buyer. It’s his/her job to get the house at the best possible cost to his/her client. The buyer’s agent is not representing you in any way, shape or form.
Therefore make certain you look over (and have a settlement attourney look over) any paperwork prepared by the agent.
It’s likely the BA is on the up and up. Many housing contracts are boilerplate. But it doesn’t pay to take that chance and get stuck with clause 29.A.123.c which states you’re responsible for yardwork for the first 5 years or something.
[slight hijack]
If you’re dealing with the buyer’s agent, isn’t the commission amount between the buyer and his/her agent? Why do you have to negotiate that at all?
[/slight hijack]
The agent asked me if I would be willing to work with her. I had read before about sellers paying the buyers agent fee to have the agent bring the buyers into the home to sell it. I believe this is just one way to sweeten the deal for the buyer, kind of like if I was to pay the closing costs (I’m not). The way that I look at it is that if the agent knows that I will be willing to work with her like that she will be more likely to show my house to prospects. And the buyers agent fee is about half what it would cost me for a listing agent.
Anyone else familiar with selling like this? This is somewhat a common practice isn’t it? I don’t want to end up being a sucker and kicking myself, it seems like a legitimate way to sell the house though.
I’m not terribly familiar with home selling/buying, but it sounds to me like they’re asking you to pay the fee of someone whose obligated to work for the “other side” of the deal. Since, as others have pointed out, the buyer’s agent ethical and professional job is to get the best deal for her clients (which will usually turn out to be the worst deal for you) why would you want to pay her?
Again, however, I’m no expert in this field. I’d love to hear what someone more knowledgeable in this area has to say…
It is common for the costs of both buyer’s and seller’s agent to come out of the seller’s pot. Everyone in the transaction knows this and therefore the buyer’s price takes these fees into account. A FSBO property (with no agents) usually will sell for 6% less (no fees to any agents). An FSBO with a buyer’s agent only will sell for roughly 3% less (because the other 3% still has to go to buyer’s agent).
Regardless of who pays, the BA still represents the buyer (and only the buyer). This apparent conflict of interest is acceptable because it is disclosed in the paperwork and a very commonly accepted practice.
If it were a true buyer’s agent, that might be true. More typically, a so-called buyer’s agent isn’t paid anything by the buyer. He or she splits the commission with the seller’s agent. Technically, this kind of buyer’s agent is actually a sub-agent of the seller. In recent years, the use of dual agency has expanded, but a buyer should always remember that the latter kind of buyer’s agent also owes duties to the seller, and has a personal incentive to have you pay more for the house, as his/her commission is based upon that sales price.
To more directly answer you, the buyer’s agent here won’t show the house unless the OP pays what would otherwise be her share of the commission. Understandable, but it highlights the point I made above - the faux buyer’s agent really doesn’t have the buyer’s interests at heart. If she did, she’s show them what she obviously thinks is a good house for them.
To answer the OP - get thee to a lawyer. Yeah, the agent will probably use a form, but forms can favor one side or the other. In this case, I bet the form protects the agent above all. You’ll need a lawyer for the closing anyway to prepare documents. Your state may also have laws which impose responsibilities on a seller (such as disclosure requirements) that you need to be aware of.
One thing to remember with this whole deal of who is paying what is that I know how much the commission of the agent will be, I know what my bottom dollar that I want to pocket is, and I figure everything in. So one way to look at it is that while I’m paying the fee’s, the buyer is looking at a slightly higher bottom dollar price of the house, so the buyer is paying the extra to cover those fee’s and is in fact paying those fee’s.