# FSBO: Buyer's Agent Commission



## dagman1 (Mar 3, 2010)

I'm going to sell my income property for a bunch of reasons I don't need to get into. I was thinking of listing it using PropertyGuys.com (or some equivalent) but I hear you need to offer a buyer's agent commission to get agent to even bring their clients by your property. How much should I offer in order to get this done? I was thinking perhaps offering 2%. How do I indicate the amount of commission in the listing that I will offer to the agent?

Thanks for any help.


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## Montrealer (Sep 13, 2010)

I am a Broker and if my clients like a property that is listed by a FSBO or on a site like propertyguys.com I will call them and ask for a flat rate or at least 2% because without me, they don't sell there property and there is no way I would let them speak to my clients.

We Real Estate Broker's work in a tough, competitive and dog eat dog business so every penny counts!!!

Good luck ;-)


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## Homerhomer (Oct 18, 2010)

First off make sure you are listed on MLS, secondly at the moment many buyers are still represented by agents because it's "free" and you need to make sure in your listing that buyer agents are welcome, or as the agent who posted above they will eliminate large percentage of your potential buyers (and they will try to do anyway, but if you are listed on MLS most buyers will at least browse the site themselves as well). I personally would offer 2.5% or what is stated in buyer's contract (whichever is less).

Hopefully in the near future it will change and more poeple will realize that there is very little need to pay thousands of dollars for receiving automated email with mls listings (and not much more than that).


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## Assetologist (Apr 19, 2009)

*Competition & Value*

I don't think real estate agents should be paid more than 1% of the sale price of property.

For me that is the absolute value I attribute to their services.

The good ones will make up for excellent service and effectiveness with more frequent sales. The 'not-so-good' ones will seek other jobs suited to their talents.

The market will set the price of goods and services and the real estate agent market is in a state of transition.

Competition is good.


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## Assetologist (Apr 19, 2009)

Montrealer said:


> because without me, they don't sell there property and there is no way I would let them speak to my clients.
> 
> We Real Estate Broker's work in a tough, competitive and dog eat dog business so every penny counts!!!
> 
> Good luck ;-)


This is exactly the attitude I cannot stand and the reason I wholly support the Competition Bureau's strong stance.

Good Luck ;-)


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## kubatron (Jan 17, 2011)

***,

I don't think you could put a % term on what a 'good' agent will bring. I hate when people make absolute-truth statements like this, especially when it comes to real estate. 

Why not 1.25%?
Why not .75?

What if an agent who you paid 1% got you a crap deal, but one you paid 2.5% got you an amazing deal?

*i'm not an agent.


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## Assetologist (Apr 19, 2009)

kub,

I am the one paying the bill so I get to pay what I want for the service otherwise I have the choice of not using that service. That is the beauty of a free market.


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## kubatron (Jan 17, 2011)

Thank you for demonstrating how little you know about real estate.

Continued success.


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## K-133 (Apr 30, 2010)

Here's how a few agents described it to me.

If you list below 2%, you won't get a bite.
If you list below 2.5%, you'll get the desperate agents.
If you list at 2.5%, you'll get the greatest exposure.


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## andrewf (Mar 1, 2010)

This doesn't make sense. Buyers' agents want to find a property while investing minimal time. Limiting the properties you look at with the client over 0.5% commission means you might be spending more time.

I wish the Competition Bureau well in crushing the real estate cartel.


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## kubatron (Jan 17, 2011)

I agree it's garbage that agents will trashtalk a property which is listed at 2% not 2.5% for example. I've heard this numerous times. "why should I show a 2.0 place when I can sell a 2.5% place?" they ask (I work _inside_ a r/e agency but am not an agent). 

Well, long-term, 2.0 is better than 0.0, but they don't see it that way (yet).

However, to say blindly that no agent should make more than x% is also foolish. 80/20 rule applies (or in my opinion, 95/5). the 5% of agents who are amazing at what they do should be paid top $ because they save people money and stress by finding suitable properties. 

I am stuck with one agent and having worked with him this long, I could say I would easily pay him more than other lesser agents, based on the thousands he has earned me (or saved me) thru various transactions.


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## dagman1 (Mar 3, 2010)

I did not mean to turn this into a debate about what agents should be paid.

This has nothing to do with what they should be paid, but what I need to pay to get an agent to show my property to their client. I have little choice given the business model that agents have worked so hard to set up for themselves despite my views on the value of agents' services.

I think input from actual agents would be helpful. It seems like 2% would be enough to get an agent to show a client a listing. Do you think this would cut me out of 50% of agents? 80%?


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## Montrealer (Sep 13, 2010)

Assetologist said:


> This is exactly the attitude I cannot stand and the reason I wholly support the Competition Bureau's strong stance.
> 
> Good Luck ;-)


I make over six figures yearly, I think there are more than enough people that trust and believe in Broker's.

Also, I respect FSBO's and think they are (for the most part) capable of doing a good job, but it's a fact that most FSBO's sell for less than market value and often get screwed by buyers down the road due to lack of contractual paperwork etc.

9 out of 10 FSBO's eventually sell with a broker and only 10% are successful without one and sell themselves.

So.... GOOD LUCK TO YOU ;-)


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## Montrealer (Sep 13, 2010)

andrewf said:


> This doesn't make sense. Buyers' agents want to find a property while investing minimal time. Limiting the properties you look at with the client over 0.5% commission means you might be spending more time.
> 
> I wish the Competition Bureau well in crushing the real estate cartel.


And I also hope that the government goes after your line of work so your wife and children don't have a roof to live under and/or food on the table.

Be careful with your words!


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## Homerhomer (Oct 18, 2010)

Montrealer said:


> 9 out of 10 FSBO's eventually sell with a broker and only 10% are successful without one and sell themselves.
> 
> So.... GOOD LUCK TO YOU ;-)


This is about to change with access to MLS, not having it was the main reasons FSBO didn't work because most buyers wouldn't even see the listing.


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## Homerhomer (Oct 18, 2010)

Montrealer said:


> And I also hope that the government goes after your line of work so your wife and children don't have a roof to live under and/or food on the table.
> 
> Be careful with your words!


Most don't have the monopoly like priviliges that your industry enjoys so it's not a problem, we all have to deal with open competition or poeple doing the work themselves (with few exceptions for a good reasons ei doctors, and not so good reasons ei RE agents).


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## andrewf (Mar 1, 2010)

Montrealer said:


> And I also hope that the government goes after your line of work so your wife and children don't have a roof to live under and/or food on the table.
> 
> Be careful with your words!


My industry is not an anti-competitive cartel. Competition is fierce and margins are small.


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## GeniusBoy27 (Jun 11, 2010)

I think 2% is a reasonable offer, to be honest ... but the question is the MLS listing or not, because that's still the major way by which people filter.

FSBO has its major downside, which is time consumption required to sell a property. Is it worth that hassle?

What I'd like to see is a balance between buyers and sellers (like in the US), where each side pays for their own agent. I've never understood why only the sellers pay in Canada.


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## Ziggy (May 16, 2011)

IIRC, when I bought my condo 6 years ago, the standard commission was between 2.5% and 3% but the guy selling the condo was cheap and only willing to offer 2%. As a result, he got very few viewings and the property stayed on the market for over 6 months. So I'm not surprised that low commissions would result in a property being harder to sell.

You might also want to consider that some people that are cheap about paying commission will also be cheap on other things like maintenance and renovations.


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## Homerhomer (Oct 18, 2010)

Ziggy said:


> You might also want to consider that some people that are cheap about paying commission will also be cheap on other things like maintenance and renovations.


There are plenty of poorly maintained houses sold through the agent, don't think this applies at all.


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## larry81 (Nov 22, 2010)

The whole RE agents industry will get CRUSHED by interned based listing, give it a couple more years.

RE Agents
Mutual funds salesman
Mortgage brokers

= middleman's


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## marina628 (Dec 14, 2010)

Some people here assume an agent is going to take a couple out to see a few house in a day sign a few papers and make thousands. The last house we bought was after 47 showings that spread over several months.We bought three Investment properties in last 12 months plus sold our old primary residence.
On my last purchase my agent was paid $5300(2.5%) which she then has to pay taxes on ,desk fees, gas for driving us around , many lunches and dinners.When we made the Deal it was 3 sign backs and that meant she had to drive an hour each way to our home to get us to sign stuff.

I pay my agent willingly because she is a great negotiator on both sides of the deal and I know I would be horrible at it.


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## Jungle (Feb 17, 2010)

A little bit side tracked now, but an update on the latest fight between TREB and the Competition Bureau states that in a few weeks, (Toronto) might be able to access information such as previous days on the market and previous selling price from the internet, without an agent.


http://www.theglobeandmail.com/repo...ighs-enhanced-online-listings/article2046850/


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## Montrealer (Sep 13, 2010)

Most FBSO's:

- Have their property over priced and don't know or understand the market
- Think they can manage visit's, who comes and goes, open houses and contractual paperwork
- Don't know when to accept an offer and what the market is dictating
- Need a reality check when it comes to quality of construction, location and price
- Call a Realtor within a few months and 90% sell with a Realtor eventually

In Montreal and surrounding areas, most people choose a Realtor over selling themselves because it makes more sense and remember, the commission means nothing when a Broker can get you more money than you can get yourself on the open market.

FYI: The average Realtor makes around $60,000.00 per year so by no means are we rich and swindling people after making huge commissions, in Quebec, just to hold a license and have access to MLS is almost $15,000.00 per year.


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## kubatron (Jan 17, 2011)

larry81 said:


> The whole RE agents industry will get CRUSHED by interned based listing, give it a couple more years.
> 
> RE Agents
> Mutual funds salesman
> ...



Actually, Larry, did you know that once the "internet" "opened up" the business in the states, after a "couple more years" the great majority (over 75%) of business is still done with / thru agents?

You probably didn' tknow that, because you probably thinks its childs play to sell a house, right?

Yeah, thought so.


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## larry81 (Nov 22, 2010)

kubatron said:


> Actually, Larry, did you know that once the "internet" "opened up" the business in the states, after a "couple more years" the great majority (over 75%) of business is still done with / thru agents?
> 
> You probably didn' tknow that, because you probably thinks its childs play to sell a house, right?
> 
> Yeah, thought so.


Do you have any stats or official source ? It would be interesting to see the 'progression'.

IMHO, many people of the boomer generation is not familiar with the internet and will use agents. Give it a couple years...

Last time i was in Quebec i actually heard a Remax publicity of on the radio went something like "if there no commission, its not ok"...


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## andrewf (Mar 1, 2010)

marina628 said:


> Some people here assume an agent is going to take a couple out to see a few house in a day sign a few papers and make thousands. The last house we bought was after 47 showings that spread over several months.We bought three Investment properties in last 12 months plus sold our old primary residence.
> On my last purchase my agent was paid $5300(2.5%) which she then has to pay taxes on ,desk fees, gas for driving us around , many lunches and dinners.When we made the Deal it was 3 sign backs and that meant she had to drive an hour each way to our home to get us to sign stuff.
> 
> I pay my agent willingly because she is a great negotiator on both sides of the deal and I know I would be horrible at it.


Sounds like you're a very demanding client, and you got your money's worth. Not everyone is so demanding. Some clients go to an agent with a house in mind. Those people should be free to pay a lower commission.


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## kcowan (Jul 1, 2010)

I think good agents earn their money. I have always used an agent when buying or selling. Because it is a skill I use so seldom, I pay for their experience.

The last house in Toronto I wanted to get $530k. The agent suggested listing for $529k. Then she had all the potential buyers submit their bids 10 days later. There were 3 unconditional bids. We eventually took one for $550k. Even though the total time she spent was not that high, she used her experience in the market to orchestrate an acceptable transaction for me. This was in October 2009.


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## Larry6417 (Jan 27, 2010)

Good real estate agents definitely earn their money, but...not all real estate agents are that good. When I bought my present home, I first used a friend of a friend (mistake!). She was very inexperienced and more interested in making a sale (and commission) than getting me the right house at the right price. We found the right house, but she wasn't interested in getting me the right price. I fired her and replaced her with a more experienced agent. The new agent got me a lower price (~$4K) and recommended a home inspection agency, which found a faulty furnace (replaced before the sale). The second agent was worth the full price; the first was not.

All parties (real estate agents, sellers, buyers) should be free to negotiate their own prices. If people want a higher level of service, then they should be prepared to pay for it. If they want a lower level of service, then they should have the freedom to pay for less.


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## marina628 (Dec 14, 2010)

Andrew
I am not a demanding person , I picked out many houses on the internet but unfortunately the internet does not show everything .They have photos that show the best things about the house and leave out the crap.


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## andrewf (Mar 1, 2010)

I did not mean it as an insult. You were looking for income properties, right?

It's your prerogative to look at dozens of properties, but that agent certainly earned her commission. Other people might not need or want that level of service, and thus they should not be paying the same rate.


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## kcowan (Jul 1, 2010)

Larry6417 said:


> We found the right house, but she wasn't interested in getting me the right price. I fired her and replaced her with a more experienced agent. ...


We experienced that once but I said: Look I want you to get it for the price I offer. If not another agent will! She eventually got $9k off list and I was happy.


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## dagman1 (Mar 3, 2010)

After thinking about it, I think I'm going to offer 2.5% so I don't miss even 1/4 of the potential buyers. That could cost me in the purchase price. Of course I'm going to be listing on Craigslist, Grapevine, Kijiji, and MLS (likely through PropertyGuys).

I'm currently unemployed so taking calls and doing showings is a non-issue, not to mention I'm familiar with contractual issues from my former employment. I don't think selling a property myself will be that complicated, even though I am walking in blind to a certain extent, as long as I do my homework.

Although I didn't want to turn this into an agent compensation debate, as other have said, the current fixed commission model is broken. There is no reason why I shouldn't be able to select what services I need on, for example, a flat fee. But agents right now have a monopoly on listings right now, so they push tied selling on their other services and inhibit price competition. It is obviously inefficient and stiffles innovation in the industry. So I hope the Competition Bureau has their way with the CREA and TREB. 

But for now I have to work in the current system we have to sell my house, which means paying a buyer's agent 2.5% commission.


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## apom (Mar 10, 2011)

Watch out with property guys. I recently found out that if you list with them in Toronto they only put you on the public board. Your ad is never viewable on the private mls board which agents use. You lose a lot of potential clients because of this.

I recently sold a property through a flat fee listing. It was great. The property sold in 5 days for good money. If you have the interest and knowledge of selling a home yourself then go for it. All the orea purchase agreement forms can be found online.


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