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Buying or Selling a Home/Contract negotiations and agent compensation


Dear Ms. Sue Bernstein,
Thank you very much for volunteering on this site!  While you are selling real estate in the great city of Los Angeles, CA, my scenario is in another state but I hope and trust you'll have no problem answering my questions.  Background:    We are selling a house in Louisiana as a FSBO.    (We are doing FSBO mostly due to major financial challenges we are about to face).   
We have paid an agent $400 to give our home an MLS number for 6 months.   As part of the listing, we have agreed to compensate a buyer’s agent some amount.    And sure enough, whenever we are contacted by an agent, one of the first things they wish to reconfirm, is if we are indeed willing to pay them a (usually specified amount of) commission.  
We just recently received an offer from an agent.    (She has the same last name as the buyer  and we  learned, she is the ex-wife of the buyer).    
In conversations with the agent there has not been any mention of compensation for her, nor is there anything in the contract.   We are a bit puzzled about this.   If it is not in the contract, would she have any legal basis for asking us for anything later?
The offer stipulated – among other things – the following:    the buyer wants to rent my house from June 1 till September 1 and then buying it.    Buyer doesn’t have a house to sell but we learned he is the Air National Guard and will deploy sometimes in September.   (We wonder if maybe the increased pay then is factored in and is the reason, or if he doesn’t want to break his apt lease).   
Should I be concerned about the terms of this contract?    
How could I make sure the buyer will be able to buy after two months of already living in my house?    
What should I put in the contract to protect my interest?
I am thinking about proposing a rental agreement for $40/day – starting on 1 June - until the closing.  
But while hoping for the best, would like to prepare for the worst and would like to also propose them an agreement that would state that if by 1 September the buyer cannot buy the home then the agreement will convert to a conventional rental of $1900/month w/ a $5000 security deposit?
Also, should I be concerned that the buyer's agent – as of yet - has not asked for any compensation from me?      Could this come up later if it is not in the contract?
Once again, thank you VERY MUCH in advance.    


Pablo Durissimo

Dear Pablo,

You are asking several questions and I will try and answer them as best I can and how things are done in California.

1. Everything should be written into the contract at this time.  Ask the agent what they are expecting in commission and negotiate if necessary.
2. Any relationship to the buyer should be disclosed in writing.
3. Sounds like all you have right now is a short term rental with the possibility of a purchase.  Doesn't make much sense to me to take it off the market based on them maybe purchasing the house at a later time.
4. If you want to proceed with the idea of it converting to a lease if they don't buy everything needs to be signed now and the deposit should be paid now and can be applied to the down payment should it become a sale.

Saving money by not hiring a realtor to represent you in contract negotiations can cost you a lot more in the long run.

Good luck and I hope this helps.

Buying or Selling a Home

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Sue Bernstein


My expertise in in residential real estate., I have been selling residential real estate for over 2 decades in the Los Angeles area. I can answer most questions regarding real estate in the state of California and most generic questions for the rest of the country relating to buying and selling homes, selecting a real estate agent, and more!


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