Buying a FSBO when you have a realtor

Pharmacist · The Villages, FL · Member since 2014 · 96 posts · 36 votes

I found a FSBO that I am interested in but I do have an agreement with a realtor. The property listing says 3% broker participation welcomed. Can anyone tell me what that means? I realize I may have to pay my realtor's commission, but am hoping my closing costs wouldn't be double what I have paid on my other properties that were on MLS. Also, in the past I have negotiated closing costs with the sellers. I am assuming that is not an option here? I am waiting to hear back from my realtor to proceed, but wanted to have a little more info so I can make educated decisions. Thanks!

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

@Deanna McCormick the reason you would is because its the right thing to do..

look at it from the realtors point of view they spend hours and hours working with a client their only reward is the close of escrow.. there is a thing called loyalty.. I suspect if you were in the position of the realtor you would sing a different tune.

And of course there is the contractual aspect.... and its a risk realtors run for sure.

Attorneys are NOT nearly as good as a very competent agent.. you think an attorney knows there way around a home inspection... or is really really up to speed on all the financing angles..

closing attorney's cannot charge enough they get paid like escrow companies a few hundred to 600 bucks a file.. you know how many hours an agent has to work to close these deals.. the lawyer would be working for 20 bucks an hour if that... NO lawyer is not the way to go here unless your a very sophisticated buyer.. and then why have a lawyer at all simply go to a good title and escrow company.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
the FSBO owner is willing to pay your realtor 3%... any decent realtor would accept that and not charge you any additional..
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Donna Salmiery
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Pharmacist · The Villages, FL · Member since 2014 · 96 posts · 36 votes
9y
Oh that is good news! Thank you @Jay Hinrichs
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
my pleasure...
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Deanna McCormick
Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
9y
If you found the the house on your own, why use your realtor at all... You could hire a attourney to review purchase agreement and do final paperwork for closing for probably less than the realtor's 3% fee. Then negotiate with seller to drop price the 3%..
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Donna Salmiery
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Pharmacist · The Villages, FL · Member since 2014 · 96 posts · 36 votes
9y
@Deanna McCormick - My agreement with the realtor says if i find a property within a certain time period, she still gets commission.
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Deanna McCormick
Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
9y
@Donna Salmiery Live and learn.. I'd never be bound by a contract like that.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Deanna McCormick the reason you would is because its the right thing to do..
look at it from the realtors point of view they spend hours and hours working with a client their only reward is the close of escrow.. there is a thing called loyalty.. I suspect if you were in the position of the realtor you would sing a different tune.
And of course there is the contractual aspect.... and its a risk realtors run for sure.
Attorneys are NOT nearly as good as a very competent agent.. you think an attorney knows there way around a home inspection... or is really really up to speed on all the financing angles..
closing attorney's cannot charge enough they get paid like escrow companies a few hundred to 600 bucks a file.. you know how many hours an agent has to work to close these deals.. the lawyer would be working for 20 bucks an hour if that... NO lawyer is not the way to go here unless your a very sophisticated buyer.. and then why have a lawyer at all simply go to a good title and escrow company.
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Donna Salmiery
OP
Pharmacist · The Villages, FL · Member since 2014 · 96 posts · 36 votes
9y
For me being fairly new, I like having the realtor guide me through things like inspections, etc. She has been great for our first two properties and it's worth the extra money in the long run to me. Maybe down the road, I will be more comfortable without a realtor, but for now, it's working. Thanks for the advice.
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Brian Lacey
Rental Property Investor · Hailey, ID · Member since 2015 · 218 posts · 143 votes
9y
That realtor is a business partner that you can leverage down the road. You have an ally.
No reason not to honor your deal to save a measly 3% on one deal when this realtor is far more valuable than that.
Get back the money, you'll lose to the realtor, in negotiations in either the price or terms and conditions
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Brian Lacey in my line of Work Realtors are the one's who make my year ... you get in with top notch realtors and the deals flow.... we buy maybe 10% of our inventory from wholesalers the rest is from OREO brokers who know us to be the real deal.. you become the real deal by being dog loyal to your brokers .. its a symbiotic relationship.
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Brian Lacey
Rental Property Investor · Hailey, ID · Member since 2015 · 218 posts · 143 votes
9y
Originally posted by @Jay Hinrichs:

@Brian Lacey in my line of Work Realtors are the one's who make my year ... you get in with top notch realtors and the deals flow.... we buy maybe 10% of our inventory from wholesalers the rest is from OREO brokers who know us to be the real deal.. you become the real deal by being dog loyal to your brokers .. its a symbiotic relationship.
Good to know that I'm on the same page as you. This is something I learned from Quarles' program.
Always be nice to people who can hurt you by doing nothing.
I know it seems like I'm some kiss ***, but I don't know there's anyone else on this platform that has more knowledge on relational capital and how to leverage it than you.
Always enjoy reading your posts/comments, nothing short of gold.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Brian Lacey Quarles is an expert and one of the few that I would recommend... frankly
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Michael Hicks
Real Estate Investor · Rossville, GA · Member since 2014 · 218 posts · 96 votes
9y
Definitely give the realtor their 3%. Loyalty goes a long way.
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Deanna McCormick
Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
9y
My point is I'd agree to pay a realtor their fee, if the realtor finds me the property, If I happen to stumble across a property myself, or if find a listing that's not on MLS, why should a fee be given to a realtor when they weren't involved in finding the property, when I could use my attorney to do the closing paperwork. It's like a non-compete clause, against yourself.
I found my last experience in listing a house with a realtor excessive for the amount of work required by the agent in my opinion,, granted it was move in ready unoccupied house...and sold in 10 days... but my mistake was not putting it on FSBO and MLS myself. I lived and learned.
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Account Closed
Johnson City, TN · Member since 2014 · 586 posts · 705 votes
9y
Realtors are being spoken of like they are a generic item available off of the shelf. All realtors are not made the same. I have encountered some that are very knowledgeable and are an integral part of putting a deal together and getting it to the closing table. I have encountered others that their greatest expertise was access to the lockbox. I am constantly stunned at the ignorance I have encountered out of agents with 20+ years of experience. Some agents eat, sleep and breathe real estate. It's their passion and and they are constantly trying to improve their knowledge base. Others got into it because they wanted something to do and thought they could make some money at it. Suprisingly, many of those agents have hung around solely because of their social connections. My advice is to interview realtors and ask them some tough questions to gauge their depth of knowledge. Don't hire one just because they are a friend or neighbor or because you just saw their sign. Interview them and hire them just like a employer interviews a job applicant.
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Deren Huang
Real Estate Agent · Tulsa, OK · Member since 2016 · 408 posts · 242 votes
9y
I totally get what @Deanna McCormick is saying! If you find the property and feel good enough to navigate your own transaction you can def. save some money if it is a FSBO.
In this case, the owners are already willing to pay the realtor the 3%, so no need to try to negotiate.
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