Question for Realtors on Private Sales

[cdnsir]

My friend found a nice place listed on Kijiji that he's interested in. But on the ad, the seller emphasized the fact that they want No Agents involved with this sale. They want to save a few bucks on commission, I think that's pretty understandable. But the kicker is, my friend has already been working with his agent since last month.

Right now he's holding off any contacts with both the agent, and the seller regarding the listing to avoid starting any complications. So my question to the Realty Pros here, what should he be doing in this situation? TIA!

[barmanjay]

He should ask his agent for advice ;)

But really,.. if he is willing to pay his agent a bit for his time, he can help with the negotiations and sale of the home.

Also he can help better judge the current market value of the home. From what I have seen, most FSBO's (for sale by owner) are over priced

[cdnsir]

So in this case, it will be the buyer who hires the realtor and so the seller don't have to worry about the commission? Nice, that should work out fine then.

Interesting, I always thought the realtors only get their paychecks from the sellers. Didn't know it can actually work either way. Shows how much I know... :nut:

[HRD2PLZ]

Originally posted by cdnsir
So in this case, it will be the buyer who hires the realtor and so the seller don't have to worry about the commission? Nice, that should work out fine then.

Interesting, I always thought the realtors only get their paychecks from the sellers. Didn't know it can actually work either way. Shows how much I know... :nut:

When a home is listed on the MLS the commissions for both the Listing and Buyer's Realtors is paid for by the seller. In a private deal, its typically the buyer who will pay for their own Realtor if they choose to be represented.

And like Jay said, *most* For Sale By Owner's are over-priced. They typically get their list price from looking at realtor.ca (which already has commission built into their list price). Not only that, but unless they've sat down with a Realtor prior to listing their home, they don't know what the comparable properties in their area are actually selling for.

[turbotrip]

Originally posted by barmanjay
From what I have seen, most FSBO's (for sale by owner) are over priced

indeed

[quazimoto]

thankfully a good realtor on your end can make the seller aware it's over priced by showing comparitives. Just factor in your realtors commission into your offer, then it won't cost you a dime anyways.

[bg_27]

yah, if they arent at LEAST discounting the house for realtor commission, the price will be too high.

[2002civic]

well if they asked less to reflect the lack of realtor fees what would the point be aside from a possibly quicker sale? The reason they list it themselves is to make more money...whether it works out that way is another story...

[Kloubek]

Barmanjay is right.

In an ideal world, a FSBO home would be priced half the commission less than a comparible home on MLS. This way, the seller saves half the fees, and passes on the other half to the buyer. Unfortunately, I must agree - FSBO are usually overpriced and that is where a Realtor can help: with comparables, negotiating, etc. If the Realtor does help out, ideally the buyer and the Realtor should have a commission or payment agreement prior to the Realtor spending his/her time working on behalf of the buyer in regards to this particular home.

An alternative is to contact the seller, or have his Realtor do so, and ask him/her to pay his Realtor fees - despite the fact they insisted on no Realtors. This has been done to me before (my place is on Welist) and it is quite frustrating when you explicitly ask otherwise.

The other option is not to use your Realtor at all to purchase the home. It is unfortunate for him, but if your friend is finding better deals elsewhere then it is his choice to move on them himself. Your friend is under no legal responsibility.

Personally, I feel I know enough that in such a case I would not view the benefits of using a Realtor as worthwhile for whatever the likely charge is. On the other hand, if your friend isn't keen on negotiating, doesn't know what to look for in a home, isn't sure what it is worth, or of course, can't drive, then the (likely reduced) fees might be worth it to him.