Do I have to pay commission to a buyers agent if I didn't have the property listed with anyone?

Its a commercial property, and I didn't have it listed with anyone, so we never signed anything or advertised saying that we would pay a buyers agent commision. I'm assuming the buyer just found the property themselves and had the agent send us the offer so they would have someone representing them. In this situation am I obligated to pay them a commision or is it negotiable?
In Selling Property - Asked by s r. - Jul 21, 2010
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Answer(s)

Joseph F.
Rockville, MD

No. You have no obligation to pay a Buyer's agent commission. If the Buyer chooses to use an agent to represent him, the Buyer is responsible for compensating the agent. You can make this easier for him buy adding this compensation to the current purchase price and crediting it back to the agent at closing or the buyer can simply pay the agent out of his own pocket.

Jul 21, 2010
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Rob B.
Chandler, AZ

Scot.....
I believe there is a "reasonable man rule" that should be followed in all transactions in life, and real estate just happens to be one of life's transactions. This reasonable man rule simply follows the answers created by asking, "What would reasonable people likely do in concluding an answer to your question"?
I would approach this by asking just how much value to person representing the buyer was adding? I would further ask myself, "How much do I want to accept the offer that is being made"? The last question leads to the question, "Just how fast do I want to sell the property"?
If it is reasonable that the agent is offering some value to the transaction, if the offer is a acceptable one and your want to move your property, it would then seem reasonable that you could either negotiate the commission or follow the previous advice of adding it to the purchase price.
The major thing in life is to not try to "screw the other party" or stand still for being taking advantage of yourself. This is reasonable.
Rob Baird, CA RE LIC #544165 (One of the oldest active licenses in CA)
951 515-5855

Jul 21, 2010
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Jared P.
Broker/Agent
Frankfort, IL

Being a broker, I would expect to be paid by the seller, even if you don't have to property listed with me. All of my Letters of Intent include the wording "Seller is responsible for commission." One way or another, you are going to pay the commission.

Jul 21, 2010
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Bjorn R.
Broker/Agent
Estero, FL

You should pay him at least a co-brokerage fee that a listing broker would pay if you had it listed. He did bring you a buyer and sell your property for you didnt he?? You should compensate him for that.

Jul 21, 2010
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Neera K.
Broker/Agent
Orlando, FL

I am in the same situation my self where I brought the buyer to the seller, the loopnet ad did not specify any commission structure but did say that the brokers are welcome. I called and confirmed before taking the buyer to the seller whether the commission is paid and how much. The listing person, who was a brother of the seller said, you put down whatever commission you want in the contract, if seller does not like the offer he will not accept it. We went to the seller, I specifically discussed the commission of 3% which is quite reasonable to the seller for a commercial transaction. I promised some cash back to the buyer from the 3%. When we visited the seller he started grumbling about the commission to the prospective buyer and said he could not bargain on the price because he has to pay me. The seller and the buyer tried to discussing to do a direct deal w/o any broker. Luckily I had already drawn a contract where 3% commission was listed and the buyer had signed off on that. We have not closed on the transaction yet but the buyer is saying he is paying for the commission since the seller mentioned he could have negotiate better if he did not have to consider the commission.
I like the response of a reasonable man approach, if the service has been offer, the commission has been discussed whether originally mentioned or not, it must be paid.

Jul 22, 2010
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Russell P.
Broker/Agent
Overland Park, KS

I agree with Joseph F., you are not obligated to pay a buyer's agent a commission in this case, and offering to add the requested commission onto the sales price is the most reasonable approach. However, keep in mind that your property may not be the only option for the Buyer, and the agent may have the power to direct his client to another property where the owner WILL compensate the agent. In my opinion it's usually best to offer to compensate, and a figure between 2-3% is usually fair depending on the transaction size.

Jul 22, 2010
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Brandi L.
Oak Brook, IL

With few exceptions, one is not required by law to leave a tip at a restaurant either, it's just a good faith gesture which most people make knowing that their server relies heavily on tip income.
The broker should disclose any commission demands prior to or along with his/her client's offer so you can factor the additional cost of sale into your decision to accept or reject. Real estate transactions can be expensive. As a seller, don't lose track of your bottom line by focusing on the benefits others will receive. The net to seller should be your most important consideration.
You would be wise to have a discussion with the broker regarding compensation. If you both have reasonable expectations, you will be able to create a win-win situation for all parties.
Jim Blanchard
Inland Real Estate
jblanchard@inlandgroup.com

Jul 22, 2010
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Jeff G.
Broker/Agent
Houston, TX

no

Jul 22, 2010
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Olga A.
Broker/Agent
Erie, PA

It's a simple math for you. If you are asked to pay buyer's agent's commissions you would just keep that in mind when negotiating an offer and ad it to the sale price. Commissions will lower your proceeds from the sale so you would want the sale price to be that much higher. Ultimately it's still going to come out from the buyer's pocket since he is the to bring money to the table.

Jul 26, 2010
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Butch H.
Broker/Agent
Holmes Beach, FL

The answer is no, you are not obligated to pay the commission if the property is not listed and you have not signed anything agreeing to pay a commission. That said, a broker has several ways of getting paid by the seller for bringing a buyer to the party. Before presenting the property to the buyer, the broker can ask the seller to sign a simple one sentence commission agreement that states that if he brings a buyer that results in a sale, then the seller will pay him x% of the purchase price as a commission. Another way is to incorporate the commission arrangement into the offer to purchase contract. A third way, is for the broker to get a buyer's broker agreement signed by the buyer upfront - before doing any searching. If a broker is the procurring cause of the sale, he deserves to be paid, but he must look out for himself.

Jul 27, 2010
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Robert D.
Property/Asset Manager
Newton, MA

Scot,
If you have not listed the property with anyone then then you are not required to pay a commission to anyone. The buyer would pay their broker a commission.

Jul 29, 2010
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Dawn L.
Broker/Agent
Boca Raton, FL

Scot:
While there is no 'mandatory' legal responsibility to pay broker's commission in the event someone brings you a buyer, think about it this way:
Did you advertise on Loopnet or some other directory that (mainly) one real estate agents use? Even if you just had a FSBO sign on your property, (more thank likely) your property was found because of the efforts of a real estate agent looking for space for their buyer (who they control).
My firm operates as exclusive agents, but in the rare event that we do not have a property in our inventory that suits a buyer's/tenant's needs and I have to do a search on Loopnet, I look for the commission language in the listing itself. If there is no set commission, or if there's the 'broker's welcome' or equivalent, I DON'T EVEN PRESENT the property to my buyer. Sometimes a buyer will see a property and bring it to my attention, and if the owner is not willing to sign an exclusive (if not represented by another broker), then we have a 'one-time' agreement which registers this buyer to the owner, and we usually ask a higher rate of commission because we're taking the risk by introducing a ready, willing, and able buyer to the owner.
I do have a few buyers for whom I do site selection, and in those cases, I've made THEM sign the agreement to pay my commission (in the event that the landlord will not). Most buyers, however, WILL NOT agree to this. I've been fortunate.
The only asset I have (besides my knowledge) is MY TIME. I do not like to waste my time by looking for properties for a buyer, only to have an owner wheel-and-deal their way out of my only paycheck for the transaction.
As an agent, if an owner does not want to respect my efforts and time, I'll take my buyer to a property where I will get paid - simple as that!

Jul 30, 2010
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Ratna Dewi Y.
Kerobokan, BA

off Course Not...

Sep 6, 2010
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Dorene S.
Broker/Agent
Torrance, CA

When a property is listed for sale, it is assumed that a commission will be paid to those who are working hard to bring a buyer.
Under normal circumstances, if an agent brought a buyer to you the buyer agent commission should be paid by you, and not the buyer.
To avoid any confusion, the fact that you will not pay any commission should be printed on your listing.

Sep 30, 2010
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