What to pay a realtor on a private sale

Question

What do people pay a realtor on a private sale (I found the property with direct mail) to handle the closing process, home inspection, etc...?

He also provided me with a CMA and contractor name

Vanessa Brown · Answer

@Wayne  Woodson I don't think he means he's going to give the money directly to the agent.

I could be wrong but I believe the question is what percentage should be paid to the Realtor for assistance win the transaction. Once that is decided between the two of them then at settlement the title company will cut a check to the Realtor's company, then the agent in question will take the check to their company and get paid on whatever the split is.

In addition to that because the sale is not going through the MLS the whole notion that Michael can't pay this person may be inaccurate. Many agents have agreements with their brokers that if it's not an MLS sale and no other company is involved the agent can be paid as consultant or transaction facilitator. This is something that happens all the time.

That aside we'll go with the first scenario. You may have an agreed upon amount that you were going to pay your agent already if they helped you find the property. In my experience 50% of the work is finding the property and 50% is getting it to settlement.

Special circumstances can be difficult to get to settlement and so anything that's an estate, short sale, multiple owners etc. is worth more than average.

For me (and I can only speak for me ever), I charge 3% for the whole shebang. If you find your own property and I just need to get it to settlement then we're at 1.5% and if it's one of these special hard ones we're at 2.25%.

Now with that being said we also have to take into account that there is a minimum that all this is worth. If it's a 50K property and you know that 1.5% is only $750, that's not a good thing. My minimum is $1500 and I feel that's reasonable.

If you stand to make a nice profit, and you have a good agent who is working hard and is a valued professional, try and pay what the work is worth. The reality is that if you can put it in competent hands and be confident that it'll get to settlement while you move on to finding the next one, that's worth something.

Michael Medeiros · Answer

Thanks everyone for the feedback.

Vanessa you nailed the intent of my question.  Great feedback and you validated my assumptions, appreciate the indepth response!

Wayne Woodson · Answer

If I am mistaken only a Broker can pay a Realtor. Realtor's cannot receive funds from unlicensed investors or other agents (at least not in my state). You can do a referral program where you refer leads to this agent but even that can be grey area. I would do a gift card or something that can't easily be converted to cash.

- Wayne