FSBO, Full Commission owed?

If you were planning on paying a brokers commission to anyone who brought you a buyer, then pay the commission you said you would. It doesnt matter if the buyer came before without him, you could hold that against the buyer and say no you wont pay the broker because you came on your own but that could hurt your deal. You could also stand firm on a higher price to compensate for the extra commission you were going to pay. The customer is always right and if they want to hire someone to represent them they have that right, if you want this deal I would play ball and just make them pay for you having to pay an extra commission. You could also try to negotiate with the broker if they would take a less commission to make a certain offer go through.

Did you negotiate based on the assumption you were paying the fee, or not?

tell the buyer you are adding the commission % to the agreed upon purchase price. zap!

When I was looking to buy, my broker brought me to an FSBO (so she actually did bring the buyer) and we asked her how that would work with her fee. It was simple, we paid her 2.5-3%, and it was assumed that we were getting a better price on the apartment because it was FSBO. This made perfect sense to me and seemed fair, as I was the one benefiting from her services, not the seller.

We should let Ali or another experienced agent chime in here, but my understanding is that as a seller, unless you have engaged your own broker who is subject to a co-broke agreement, you are under no obligation to pay any one's fee. That should be squarely on the shoulders of the buyer and you should make it clear that they are already paying less because you're not paying the 5 or 6%.

I think the problem here is the deception, or rather that the deception was discovered, by me. I was prepared to pay a commission to a buyer's broker who brought me a client. this buyer did not have a broker, but the broker led me to beleive that she was on board from the beigning which I now know is not the case. Why should I pay a full fee commission to the buyer's agent to negotiate the deal? The only benefit being conferred is to the buyer, not me. The buyer could have retained an attorney to negotiate the purchase price. What's the difference? The buyer would have had to pay the attoney out of his own pocket whereas by engaging a realtor for the negotiation, the seller pays and the buyer gets the full benefit of the negotiation.

As mentioned previously, if you negotiated based on there was no broker (so no fee) then you come back and tell them so. And that the price with a broker is 103% of the price without a broker. But if you negotiated knowing they had a broker and you would have to pay the broker, then you know the answer to the question. ... If there are other circumstances, you can also consider trying to come to an agreement in between (say split the broker commission).

pressure10, in your op you said the broker admitted she was brought in after the initial showing, so where is the deception? i have had buyers bring in a broker after negotiations , and legally they can up until contracts go out. However that doesnt mean i have to stick to the same terms, gcondo said it simply, just ask for more money if you lowered based on the fact you werent going to pay an extra %, or just talk to the broker and say i want to make this deal happen, but if they want it, they are going to have to come up or you accept x%.

The buyer's pretty stupid. You'd be so much more willing to negotiate on price if you didn't have to pay the broker's fee, I'm sure. I had so many offers from buyers with brokers that I turned down because it didn't make my threshold. Yet, if they had come in directly (since I had advertised all over town as FSBO), I would have accepted happily.

Depending on how desperate you are to sell, raise the price on him by the amount of the commission.

I would also take what angeloz says with a grain of sand - he is probably a broker (if you are, disclose it before you give such pro-broker comments as advice) since every post he makes is on how great their contribution to society is.

Pressure I am not sure what the issue really is. The whole point of FSBO is that you are doing all the work to sell the apartment and therefore you are not paying a broker commission. Why would you even agree to pay a commission as you are then paying someone else to help the buyer and is under no obligation to make sure you are protected in this transaction. I agree with the negotiated price + x% if the buyer wants their broker paid as part of the sale. Otherwise agree on a price and leave it to the buyer to pay their broker.

The only reason the broker is involved is because it appears the buyer is wary of negotiating on their own. So what exactly does that do for you since the broker is negotiating a price for the buyer and no one is on your side making sure that you are somehow not being talked into something that is not in your best interest because all of a sudden instead of the buyer you are dealing with a broker.

I for one sold my apartment as an FSBO originally and negotiated with the broker as to price and fee at the same time as he wanted to be compensated for his time and I wanted a certain dollar amount. He then cut his commission to make the deal work. Unfortunately for him though his client for some reason balked and then i refused to sell when they tried again a few weeks later.

And it is not really a deception as it is on you whether you ever intended to pay a broker.

Pressure10, you are making this way too complicated. You are under NO obligation to pay the broker, period. The broker has been retained by the buyer, and the buyer is responsible for paying. If they want the fee to come from the purchase price, then you should negotiate the price up so you net what was originally agreed to.

Again, you have to get rid of the idea that the SELLER pays a fee when it's FSBO. You don't, that's the whole point, but theoretically the sale price should be somewhat lower to reflect that. So if the broker comes in on the buyers side, that sales price goes up by the amount of the fee.

If you don't want to risk losing to deal, the negotiate the fee and meet somewhere in the middle.

if a buyer has a broker you pay them 2-3% commission and that should be factored into your negotiations. If you negotiated as if there was no fee, then you need to bump the broker's commission into the price, or tell the broker that the buyer needs to pay the commission separately or no deal.

Do you have the guts to walk away from your deal?

Pressure10, the situation totally stinks and, like most posters, I too think that (out of fairness) you should try to add the commission at this point. There is one problem, however -- you WILL kill the deal.

If the buyer brought in a broker at the late stage that they did, it's because they don't trust the process and/or you and wanted some guidance. Likely, the broker and the buyer have bonded in the process and the buyer is clinging to the broker for assurance. Upsetting the apple cart now in any way (including an attempt to "screw" the broker -- though that's clearly not what you're really doing) will confirm the buyer's distrust and it will kill the deal. It's all very unfortunate but that's the reality. At this point, you have two choices: Suck it up and see the deal through or make a move and kill it.

So sorry that you're in this situation...

Remember boys and girls, the purchaser brings the CASH to the closing. Also remember the duty to the seller to negotiate for them not for yourself. The duty to the seller, not the duty to maximize the broker's commission. To kill the deal would violate the duty.

If the buyer has a broker, the buyer has a broker.

Agree with many of the above, add the brokers % to the price you would accept from the buyer. Alternatively, call the buyer and explain the cost will be more with a broker. Seller controls so do what you like.