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Mentor Mondays – What is a Single Party Compensation Agreement?

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One of the more powerful but underused tools in a realtor’s toolbox is the Single Party Compensation Agreement.

Finding a non-listed property for your buyer, and convincing the homeowner to sell to your client, is a dream for buyers’ agents. More and more agents are using ReboGateway as a tool to do just this, to find unlisted properties that meet a buyer’s desires and have a higher likelihood of selling than other nearby properties because of some life event. But what many agents still don’t realize is that double-ending the deal is not the only way to be compensated for their efforts to match buyer and seller.

In this week’s Mentor Mondays, Jeff Petsche goes into detail about the Single Party Compensation Agreement, an agreement with a seller to compensate the agent if a particular buyer ends up buying the property. Besides talking about the advantages and pitfalls of this type of agreement, Jeff also discusses how to use the idea to start a conversation with a potential seller, and how to use it in conjunction with expired listings (an approach which might also work for FSBOs). The best part is that, since this agreement is specific to an individual buyer and seller, if a deal results from it, the process is far simpler than had you approached the homeowner with a proposal to list the property.

Please tell us about your experiences with Single Party Compensation Agreements in the comment section below. We’d love to hear how this underused tool has helped you succeed!

Be Informed – I have always more than enough money to meet my needs.

Be Informed - I have always more than enough money to meet my needs.

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Comment(4)

  1. I am home owner that has a single party compensation agreement on my house this very moment. I have not signed the agreement as yet but would like your advice as to the following:
    1. How much commission is acceptable. He is asking for 5%. I think 2.5% is acceptable
    2. Time line 4 months. I think that is too long. The market is really heating up my area. A house will go in 10 to 15 days.
    3. Broker will act as dual agent. Is this acceptable?
    Is a single party compensation agreement form in California standard.
    Your reply will be greatly appreciated.

  2. Thanks Jeff for your presentation. I’ve never heard of the Single Party Compensation Agreement before, but I will start to use it. I have a buyer that is looking to buy in a certain neighborhood where there are rarely any listings. Where can I find a copy of the agreement?
    Andrew

  3. nice job-I used this once before. My offer got rejected and they decided to go the MLS route. Nonetheless-I agree it’s a super tool

    I am going to try it on the expireds as you suggest

    I agree most agents don’t know it. I ahve been at this for 2+ yrs so it was new to me-but a surprise to others.

    thx

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