I have been house hunting with the help of a realtor who is my
godchild's grandmother and a nice lady. I have however been doing a
lot of the research on my own. I put a flyer in the mailbox of a home
we liked from the road and we now think that we will buy that house.
how do I compensate our realtor even though she did not help us find
the house we are actually going to buy? a flat fee? a percentage of
the value of the home we are going to buy? I want to be fair.

Hi tr1234,

I work in the real estate industry, so this comment is not a guess.

The proper thing to do is to call your realtor and allow her to
represent you as the buyer in this transaction.

Some areas of the country, and some companies have buyers sign a
representation agreement. She stands to gain approximately 3% of the
purchase price. That's why buyer's agents take the time to show you
homes, get to know your wish list, do all the homework and show you
homes, for free --they want to represent you in ANY purchase you
undertake.

Just because you found the house on your own does not mean the sale
will go smoothly without a licensed agent to represent your interests
as buyer.

I'd get on the phone and tell her you found a house and want to make
an offer. It's the right thing to do.

~~Cynthia

---

Clarification of Answer by cynthia-ga on 01 Jul 2006 01:19 PDT

If you have already made an offer, you should call her and tell her
the truth, that you made a horrible mistake, you didn't know the
protocol, but have recently been informed, and ask her what would be
fair. In this case, I would think half her standard commission would
be fair. This is probably in the neighborhood of 1.5% of the purchace
price, but make sure it closes, then pay her promptly.

It's an interesting question, and one whose official answer I'll be
interested to soo. As for my own free comments from the peanut
gallery:

Even this realtor/broker didn't show you the home you wind up buying,
you could still have that realtor make your offer to the homeowners. I
think what typically happens in that case is that your realtor/broker
and the realtor/broker of the seller will split the agreed-upon
commission. Doing so might be exceptionally generous on your
part--you're basically enabling your realtor/broker to earn money for
not having done much to find you a home--but if that's what you want
to do, there's nothing intrinsically wrong with exceptional
generousity.

Alternately, you could figure what the amount of your realtor/broker
would stand to earn in a typical scenario, and just offer to pay her
that.  (So, say, if a typical real estate commission in your area is
6% of the homes selling price, and maybe you figure that there would
be some sort of commission-split between selling and buying brokers,
then you could offer 3% of the value of the home you wind up buying.)

Realistically, if you have a close (or close-ish) relationship with
this realtor, and if she really is a nice lady, why not just have the
conversation with her? Why not just say, "I think I'm going to go
another direction with house hunting, but I want to compensate you for
the time and effort you've given me. What would be fair to you?" and
then work from there...

Typically, the realtor helping the buyer is paid from the seller's
side.  The seller "pays" the 6% commission, and that is split between
the two realtors.  It's likely that the seller's realtor will ask,
"who's your realtor" and make sure that the buyer's realtor gets that
3%.  You don't have to make a payment.

The seller's realtor has an incentive to do this (i.e., get the
buyer's realtor a commission even if she's not done anything) for
several reasons.  It "protects" the tradition of this arrangement, and
the seller's realtor may need a favor from the seller's realtor later.
 The only person who is really loses in this arrangement is the
seller, since they are paying 3% to your realtor for not having done
anything.

If your realtor helps in negotiating through providing market
research, etc. you might want to make sure she does get paid. 
However, it also sounds like you are doing much of the work yourself.

Unfortunately, depending on the contract between the seller and their
realtor, the seller may not be able to NOT pay your realtor... this is
somewhat of a scam in my opinion--realtors looking out for each other
and not for the people who've hired them.

A potential solution.  If you feel comfortable, ask the seller what
they are bound to.  Ask to see the contract between them and their
realtor, with the explanation that this could save both of you lots of
money.  If we're talking about a $200K house, 3% is $6,000!  The two
of you could split that...  The seller will want to make sure they
aren't paying 6%... even if it means amending the contract at their
end.

Calculate for "real time", say $xxx per hour your realtor helped you. 
Make sure this is contingent upon actual close.  Calculate the total
fee and come to an agreement with your Realtor.  Then work with the
seller and let them know that you will pay your Realtor $XXXX, and
that would save all this money for them.  Work that into your
negotiations.  You could save $1000s on the price of the house... AND
the seller will get more at their end as well.

What you are responsible for is contained in your written agreement
with your realtor.  You have a written agreement, right?

As noted in other comments, as a buyer, you don't pay the real estate
commission so there is no downside for you to have "your" realator
represent you in the purchase.  ("your" realator is a misnomer since
they owe their duty to the party paying them - the seller).

I can't see any seller letting you look at their agreement with their
agent.  That doesn't make any sense.

Is the house for sale by the owners or did they list it with a real estate agency?