FSBO Sellers: Working With A
Buyer's Agent
Seal the Deal, Boost Your Appeal:
Work with a Buyer Agent, Seller's Steal!
Your home needs to be sold so you’ve decided to do it yourself. For Sale By Owner (FSBO) sellers are not necessarily exempt from paying a real estate agent before you transfer the keys, even though you may be motivated to avoid commissions.
In 2018, 87% of buyers used a buyer’s agent when buying a new home. The chances are you’ll have to work with a buyer’s agent even when you’re a FSBO seller. Make sure you read up on what a buyer’s agent does before putting up your For Sale sign. It is important for you to be armed with as much information as possible as the unrepresented party in the transaction. In order to successfully navigate the world of buyer’s agents, here are a few things to keep in mind.
Listing Your FSBO Property With A Buyer's Agent
For FSBO owners, it’s important to think about how you’ll market your property so that buyers in your area notice it. MLS listings are accessed by real estate agents through multiple listing services (MLSs). MLSs are resources that agents use to list homes so all local agents are able to see them.
Real estate agents can only list homes on MLSs so FSBOs cannot access these resources. The rule does not apply to everyone. Specialized real estate companies will list your home on an MLS for a flat fee if you want it listed on an MLS. In this case, you will only receive a listing after paying a few hundred dollars to a real estate company. If you want to save money by selling your home without an agent, it may not be worthwhile.
You may want to advertise your listing and third-party aggregators to increase its exposure. You will be able to reach more real estate agents and have them send your property to their clients if you use these sites.
It may also be a good idea to research buyer’s agents in your area and contact them since agents perform an important service in recommending your listed property to prospective buyers. You can always ensure that your property gets the attention it deserves by holding an open house and inviting local agents.
Preparing Your FSBO Home For Showing To Buyer's Agents
To prepare your home for a showing, you should clean it and clear your schedule. When a buyer’s agent is present at the showing, you need to take it one step further as a FSBO seller. Your home won’t sell immediately right after a buyer tours it. It is common for buyers to ask questions and buyers’ agents often ask more nuanced questions. For a successful showing, you must be able to provide information about the structure, the plumbing, the electrical system, and the HVAC system. It’s also wise to keep track of any major renovations or repairs you’ve completed, as well as any work required on your house. There is a good chance buyer’s agents will ask and it’s your responsibility to provide them with all the information they need.
A buyer’s agent may advise their client to pause rather than write you an offer if the agent does not feel their client has adequate information or if you, as a FSBO, provide incomplete information. During this pause, the odds of receiving an offer from them diminish greatly. FSBOs can prevent this by preparing ahead of time. Providing buyers and their agents with a show sheet is always a good idea. By giving potential buyers something tangible to take home with them, you will not only inform them about the particulars of your property but also ensure that they remember it long after they’ve left. We advise buyers to put on paper why their home is special.
“Please allow us to walk around alone with our buyers during the actual showing,” Henry says to FSBO sellers. We don’t want our clients to feel comfortable speaking the truth to you.”
It is common for buyers to be too distracted by feeling as if they are being watched to appreciate the property they are viewing when they feel as though they are being watched. Please give agents and buyers space. The agents’ feedback will be more positive if you do this.
After showing your FSBO, follow up with the buyer's agents
Once you have shown your property to potential buyers, speak with their agents to find out what they think of your house and what their circumstances are. It is important to ask agents questions in order to determine the level of interest and commitment of their clients.
Understanding the potential buyer’s timeline is critical to gaining an understanding of a potential transaction. Ask the realtor about the buyer’s situation. Are they moving from another town? Have they already sold their current home? All of these details will give you a better idea of the buyer’s motivation. It will allow you to better gauge the potential that they will purchase your home.
Finding out if potential buyers are financially capable will help you gauge their likelihood of purchasing your home. It is not enough to prequalify potential buyers for a loan; you need to preapprove them as well. It is important to distinguish between prequalification and approval because someone who is prequalified for a loan does not guarantee that the buyer will actually be able to get one. By contrast, the preapproval process verifies the financial strength of buyers, whereas the prequalification process simply estimates it.
Agents should also tell you if their offer is subject to any contingencies. It is often the case that deals fall through because of mortgage or home sale contingencies when choosing between offers.
FSBO sellers' best tips for negotiating with buyer's agents
Buyer’s agents are experienced negotiators, so keep this in mind when negotiating with them. Before you begin negotiating, you should gather as much information as possible about buyers, but be cautious not to reveal too much about yourself. FSBO sellers should remember that the agent works for the buyers, not for them, and the agent’s job is to find the best deal for the buyer. In order to avoid hurting themselves during the negotiation process, sellers should be careful about volunteering information.
Don’t let your emotions get the better of you during negotiations, but stay tight-lipped. If the offers are coming in lower than you expected, it can be even more difficult to sell the home where so many memories have been made. Put your feelings aside and focus on the facts instead. You can argue for a fair price by using comparable sales in your area and your home’s appraisal. You shouldn’t accept a low offer without considering how much interest has been generated in your home.
You should rely on your open house traffic and inquiry volume. Generally, if 10 people are looking at the property every week while an agent offers you a lower price, you shouldn’t cave. In contrast, if no one checks out the property and you get a disappointing offer, you may be overpricing and should consider it.
In FSBO transactions, who pays the buyer's agent?
You may think that you shouldn’t have to worry about agents’ commissions as a FSBO seller. In the end, representation doesn’t benefit you. No matter whether the transaction is FSBO or not, commissions are still paid out traditionally.
What is the payment structure for a buyer’s agent? The seller is generally responsible for paying the buyer’s agent out of the purchase price even if you sell your home yourself in order to save on agents’ commissions.
A buyer’s agent typically receives 2-3% of the purchase price, but it’s not uncommon for FSBO sellers to refuse to pay the commission. Generally, buyers ask for a credit to be applied to the purchase price, which means that the agent’s fee remains on the closing check.
In your listing description, it’s recommended that you address the agent’s fee since FSBO sellers still have to pay the commission somehow. You should clearly state in the first line of the description that you will be paying the buyer’s agent a commission. X% commission will be paid to buyer agents is the first line of the contract.
The more you pay your agents at the end of the transaction, the more likely they are to show your property. It’s also important to make sure that the agents who discover your listing actually forward it to their clients. The purpose of discussing commissions is twofold.
It specifies exactly how much buyers’ agents will receive. The second benefit is that buyers will also see it, since many buyers are unaware of their agent’s compensation, especially how much it is. Some buyers will decide to keep 3% of the transaction for themselves if they see their agent will make 3% on the transaction. Your home will be seen by more potential buyers if you address the commission upfront. Your property will sell faster – and for a higher price – if there are more buyers who see it.
When you sell FSBO, you’re probably the only party without representation. You may find yourself unsure of what to do, so it’s highly recommended that you enlist some assistance. We’ll provide you with live support for free whenever you have questions about our free, independent package. In addition, we offer FSBO sellers a Partner package that provides even more resources, including a personal listing coordinator who will guide you through every step of the process.