How much should a home seller offer a buyer’s agent?

Dear Glen ,

We have our house for sale by owner (FSBO) and got a call from an agent who apparently has a possible buyer for our house. She said she wants to come over and “preview” the house to make sure it’s right for her buyer. She also asked how much we were offering to buyer agents. I haven’t gotten back to her because I’m not sure what to do.

I don’t want to miss out on a potential buyer, but I also don’t want to pay more than I have to in commissions. This is so stressful! Any advice?

Worried in Worthington

Dear Worried, 

First off—I’d be seriously shocked if that agent actually has a living, breathing buyer lined up for your house. This is probably something she learned in a webinar on how to convert FSBO sellers into listings. There is an old playbook out there that teaches the bait-and-switch method of converting FSBO’s into bona fide listings.

“Working FSBO’s” like this is one of many deceptive practices some agents continue to use to this day. 

If you’re an agent and have no clients, you have to start somewhere. Since you likely didn’t get much training, you will need to get resourceful, and FSBO sellers are a great place to start.

I have no problem with Realtors recruiting FSBO Sellers. I DO have a problem with lying to get in the door.

The way the ploy works is you call up a FSBO seller, tell them you have a buyer, and you’d like to see the place because you don’t want to waste anyone’s time if this house isn’t right for them. In the meantime, they are also establishing whether or not the FSBO seller will be offering a commission.

The result, if successful, is that you are now standing in a home that is for sale, and you are face-to-face with the seller. In sales, this is what we call a “highly qualified lead.” The possible outcomes are numerous:

  • If the seller is offering 3%, they are halfway to 6% and a full-service listing.
  • If they can dazzle them with their listing presentation, they might get the listing.
  • Chances are, depending on how long the FSBO has been trying, the seller may be getting tired of it and is ready to list.
  • If the seller does not want to list, they now have a relationship and could go find a buyer and get paid.
  • If the agent has no buyers, they could offer to do an open house for the seller with the understanding that if they find a buyer, the seller pays them 3%. The side benefit is that the seller gets the chance to sell to any buyer that shows up, and the agent gets to build their business.

All in all, it’s not a bad thing for an agent to do, but the deception is what bothers me. Why not just say, “IF I have a buyer, would you…”. I may seem to be hardcore here, but why does the agent need to begin your new relationship with this charade? No Bueno.

If an agent starts out lying to you, there’s a good chance they will continue to lie to you.

But wait…Glen, how do you KNOW the agent doesn’t have a buyer? I’m glad you asked. I KNOW with 100% certainty that this agent doesn’t have a buyer because if she did, the conversation would have gone like this—

“I have a buyer that wants to see your house, but before we set that up, I need to cover compensation. Are you offering a commission if we bring you an offer you like and it actually closes?”

You see—that’s how things work in the real world. Even if you say no, a good buyer’s agent will have already covered that with her buyer. She would explain that sometimes sellers are offering less than what she charges for her services. In that case, the buyer can pay her, and they would work that out ahead of time.

The fact that the agent said she didn’t want to waste anyone’s time is perhaps the biggest lie of the whole pack of lies.

Agents universally complain about not having enough time. Why would she waste HER time when she could just bring the buyer along? Because she’s NOT wasting her time—she’s going on a listing appointment and doesn’t want her fake “buyer” there to mess things up.

OK—so that covers the first question—I think.

On the “how much should we offer” question, I would say the short answer is to offer the local “going rate,” which is probably around 2-3%. This may seem to contradict my well-documented rants about how real estate fees are too high and how the 6% established commission structure needs to go away. And you’d be half right.

I didn’t say you should pay 3%—I said you should offer 3%.

  • And I’d only offer that 3% for a specific set of conditions. Such as:
    • Full price offer
    • Pre-approved buyer (with a letter in hand)
    • “As Is” inspections so we don’t end up renegotiating later
    • No “home sale” contingency
    • 30 days possession after closing for the seller
    • One mint-condition copy of the Beatles’ White Album

That last condition is to make the agent think you’re just a little bit nuts. We need her to think that so she’s less likely to mess with you later. Besides, you gotta have a little fun along the way.

The point is you are offering maximum commission because commissions are supposed to motivate a salesperson. You need the agent to understand that if she brings you the perfect offer, she will get her full 3% commission for her trouble.

If she brings you an offer that is below your dream offer, she can expect a counteroffer that includes the clause “Agent commission to be 2% at closing” or whatever you decide is fair, but certainly not 3%. Why reward her for failing to follow your directions?

Now you’ve kept your word and brought the topic of her commission directly into the spotlight where it belongs.

You now have the agent in the awkward position of having to explain to her buyer that her commission is now standing between her buyer and their dream home. 

THAT is what we call negotiating, my friend.

Why 3% to start? Like it or not, studies have shown pretty conclusively that sellers offering less than 3% get fewer showings and take longer to sell. It doesn’t affect your eventual selling price statistically speaking, but time is money, and once you’ve decided to sell, most sellers want it done yesterday. Offer 3% and negotiate down from there. It’s the best of both worlds.

So, in summary, you are going to tell her either that either she brings the buyer or you will not be letting her in the door, that is, unless she wants to attend your open house.

Second, you will offer your commission of 3% but make it understand that if she doesn’t give you a dream offer, you will be negotiating it out of her commission.

The agent will either say, “Forget it,” which means she never had a buyer in the first place, or she will bring her buyer, and you’re off to the races.

You might be worried that she will walk away, but remember, agents don’t get paid until they sell something. If she really does have a buyer, I promise you she is already tired of showing homes to that buyer. Also…

Agents would never knowingly risk a buyer going around them to buy a FSBO without them. 

To sum up my summary, you are in good hands here. Use these methods of negotiating, and instead of having one agent, invite them all. If you’re really savvy, you’ll spend a few dollars on a Flat Fee MLS listing and tell the entire Realtor community about your sweet deal of an offer. I promise you, if you’re priced right, that kind of exposure will get you loads of traffic.

But…leave out that “White Album” thing. Oh, what the hell—leave it in there. If you’re hanging around me, you probably ARE a little nuts, so why not be upfront about it?

By the way, if you’d like a complete, up-to-date market breakdown of your property, why not get our free Realist® Report? This 10-20 page comprehensive data bundle contains mountains of rich details like current pricing analysis, the Real AVM®, Sell score, local comps, neighborhood data, market trends, and flood plane information. Just ask us for it here, and we’ll send it. This kind of info is invaluable during negotiations.

Best of luck, and keep the questions coming! Hit me up HERE with your thoughts and comments. I read and respond to every email…eventually.

Take care,


Ohio Property Group, LLC
Author: “You Can Sell It”

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