Greetings-
Been reading through this groups history and thought this might be a
good place to ask for opinions.

Wifey and I are considering selling our townhome (value about 400k) and
want to buy a detached house that's 25% larger for 535k.

We enlisted the aid of an agent-broker who my wife knew. He listed our
house after we selected a house to purchase, and he submitted our offer
today.

This house was listed solely by one of those companies that help u sell
for a flat fee (we discovered this house not in the MLS, it was
physically right next door to another house we were being shown).

We received the seller's counter offer. It is 5,000 higher than their
asking price. It appears they did this to pay for our agents commission.
They were going to split the difference, and pay him 5,000 too.

At first I was against this on principle, as it's customary for the
seller to pay. We had asked out agent about this aspect beforehand, and
he was not real clear about it but assured us it wasn't an issue. I
recall his strategy was something about offering them a lower price than
our offer that would cover his commission. That, apparently, didn't
happen.

Well, I have taken some time to refelct on this. When you add up the
value of the properties involved, were this the usual kind of RE
transaction, through conventional realtors, at 5% (instead of the until
recently usual 6%) that means about $46,700 worth of commissions to be
split... quite a bit of money, and I'd rather find a way to keep that in
my pocket.

My research on the web has been reawakening my desire to purchase FSBO.
Both my wife and I have purchased and sold about six houses between us
over the years. There is an avalanche of paperwork to be gone through,
but most forms are freely available. We're not averse to reading
contracts and consulting a lawyer. I think our mortgage broker and title
company can be helpful resources. Not easy as buying a car or horse, but
do-able.

The only thing holding us back is deciding if we should drop the whole
thing right now and ask our agent to release us from our signed
committment to him (or failing that, waiting six months for it to
expire).

Just trying to decide how we should begin at this stage, since I believe
(have to read the contract again to be certain) we are contractually
obligated to our broker.

What would you do?

--
MC

Mahkol writes:

Greetings-
Been reading through this groups history and thought this might be a
good place to ask for opinions.

Wifey and I are considering selling our townhome (value about 400k) and
want to buy a detached house that's 25% larger for 535k.

We enlisted the aid of an agent-broker who my wife knew. He listed our
house after we selected a house to purchase, and he submitted our offer
today.

This house was listed solely by one of those companies that help u sell
for a flat fee (we discovered this house not in the MLS, it was
physically right next door to another house we were being shown).

We received the seller's counter offer. It is 5,000 higher than their
asking price. It appears they did this to pay for our agents commission.
They were going to split the difference, and pay him 5,000 too.

LOL...

Sounds like yer dealing with a very naive FSBO-er.


At first I was against this on principle, as it's customary for the
seller to pay.

It is...but don't kid yourself too much, if you use a buyers agent to
buy a FSBO property, you're really paying the agent because you won't
be able to achieve the same price as a non-encumbered buyer would
because the seller is doing the mental math where they have to pay
your buyer's agent.

Well, I have taken some time to refelct on this. When you add up the
value of the properties involved, were this the usual kind of RE
transaction, through conventional realtors, at 5% (instead of the until
recently usual 6%) that means about $46,700 worth of commissions to be
split... quite a bit of money, and I'd rather find a way to keep that in
my pocket.

Solution: avoid using an agent unless you really need their services.
And if you do need the experience and local knowledge a buyer's agent
brings, dont' expect to get it for free. 2.5% is customary around
here.

My research on the web has been reawakening my desire to purchase FSBO.
Both my wife and I have purchased and sold about six houses between us
over the years. There is an avalanche of paperwork to be gone through,
but most forms are freely available. We're not averse to reading
contracts and consulting a lawyer. I think our mortgage broker and title
company can be helpful resources. Not easy as buying a car or horse, but
do-able.

Oh absolutely.

The only thing holding us back is deciding if we should drop the
whole thing right now and ask our agent to release us from our
signed committment to him (or failing that, waiting six months for
it to expire).

Uh oh. You signed an exclusive buyer's agent contract? Oy. Your
agent won't be very excited to let you out of that especially
considering you have firm interest in a FSBO property.

Just trying to decide how we should begin at this stage, since I believe
(have to read the contract again to be certain) we are contractually
obligated to our broker.

What would you do?

I was in your situation before. Buyer's agent yadda yadda, and I
got interested in FSBO in an area that my buyer's agent wasn't even
showing me. I found the property. I toured it with her due to the
contractual obligation and all that, and ultimately bought the
place. I knew I was payin gmore for the place than I could achieve on
my own, but it was my first house purchase, and don't begrudge her
needing to make a return on carting a first time homeowner around to a
lot of places.

And I have used buyers agents in 2 successive home purchases, but I
went into those with eyes wide open that I was paying their commission
ultimately, even if it was the seller writing the check in the end.
In my case, my buyer's agent most recently absolutely earned his
keep--cleverly negotiating items I wouldn't have thought of, and
facilitating a process on an MLS listed property, and adding a great
deal of local knowledge of the neighborhood (he lived in it) that was
very reasssuring.

However, I was not under exclusive contract with him. I told him when
I met that I had a sour experience in the past, but if I were to
purchase an MLS listed property, I'd do it with him. I wouldn't have
worked with him on any FSBO's though. I was actually contracted and
about to buy a FSBO, but it fell through upon inspection. The
house I ultimately bought though, was MLS listed and with my buyer's
agent. No regrets.

You signed the buyer's agent exclusive contract. You're kinda stuck
I'm afraid. Either wait it out for 6 months, or pay the piper.

The FSBO dude wouldn't get away with countering $5000 above asking
price if her were MLS listed. I would counter at asking price, and if
the seller refuses, it's not meant to be--walk. Keep shopping. And
keep taking more of your buyer's agent's time. LOL.

What percentage does your buyer's agency contract mandate if any? HOw
much of the agent's time have you chewed up? Figure his time is
worth, say... oh, $100-$150 an hour tops, and see if you can't work
something out with him. That's an expensive piece of property you're
willing to buy, and the agent should be able to make some allowances
to get the deal closed without you feeling like you've been bent
over.


Best Regards,
--
Todd H.
http://www.toddh.net/

In article , you say...
Todd,
- We received the seller's counter offer. It is 5,000 higher than their
- asking price. It appears they did this to pay for our agents commission.
- They were going to split the difference, and pay him 5,000 too.
-
- LOL...
- Sounds like yer dealing with a very naive FSBO-er.
Yep, I think it's their first; formerly in the mortgage industry, I
guess she felt she was able to handle it.

As an aside, I've been calling a few sellers who advertise in the local
Pennysaver FSBO. Hmmm... a diverse bunch. My next door neighbor sold his
home in August. He's a very competent individual and long time property
owner (who manages his family's holdings, several homes/ apartment
buildings across town).

A lady I called today had advertised and currently lived in her home,
but knew next to nothing whan I asked a few of the ordinary questions
one asks. Didn't know the size of the lot ("but it's big"), the sq ftg
("but it's 3 bedrooms"). I asked her how she planned to handle the
transaction, she said she had a friend who was a realtor... oy.

It seems there is a sizeable FSBO community. Problem: no cohesion and
getting hooked up. It costs about $395 to list in MLS. There are a few
sites that do natioanl FSBO, but the listings are inconsistent, and only
a few in the area we are looking.

- Solution: avoid using an agent unless you really need their services.
I will in the future. I'm really quite taken with buying it without the
help og an agent. They're great for first time buyers/sellers, but more
and more people are starting to realize hey, it's not that complicated.

Our agent is listing our house, and we will be discussing the situation
with him tonight. We need to make our counter offer by Sat, and his
suggestion as of this moment is to make the offer again at listed price,
and he would take the commission being offers by the seller (not from
us, or half). If the sellers go for that (they seem a tad parsimonious,
so stand by).

The Purchase of this house has the sale of our current home as a
contingency. In fact, we waited to have him listed until we picked a
house we liked. If this deal goes nipples up, then it's time to
reconsider. I have a feeling he might consider releasing us from our
obligation, if we play our cards right.

- Uh oh. You signed an exclusive buyer's agent contract? Oy. Your
- agent won't be very excited to let you out of that especially
- considering you have firm interest in a FSBO property.
yeah, mah bad, I was asleep at the wheel. I've just awoken. Now we need
to do a bit of negotiating.

- However, I was not under exclusive contract with him. I told him when
- I met that I had a sour experience in the past, but if I were to
- purchase an MLS listed property, I'd do it with him. I wouldn't have
- worked with him on any FSBO's though.
Now I know what I wished I had done (thanks for that; live, learn, don't
repeat mistakes)

- You signed the buyer's agent exclusive contract. You're kinda stuck
- I'm afraid. Either wait it out for 6 months, or pay the piper.
We're prepared to wait, if it comes to that.

- The FSBO dude wouldn't get away with countering $5000 above asking
- price if her were MLS listed. I would counter at asking price, and if
- the seller refuses, it's not meant to be--walk. Keep shopping. And
- keep taking more of your buyer's agent's time. LOL.
Proceeding with all of the above.

Enjoyed your response!
--
MC

Mahkol writes:
In article , you say...
Todd,
- We received the seller's counter offer. It is 5,000 higher than their
- asking price. It appears they did this to pay for our agents commission.
- They were going to split the difference, and pay him 5,000 too.
-
- LOL...
- Sounds like yer dealing with a very naive FSBO-er.
Yep, I think it's their first; formerly in the mortgage industry, I
guess she felt she was able to handle it.

Ooof. Yeah, some FSBO'ers are just greedy bastages I think, and
aren't terribly reasonable. To try to sell a home, and to not
entertain the possibility of a realtor's client seeing the home while
driving through the neighborhood is just unrealistically short-sighted
I think. Why limit your potential customer base by ****ing off real
estate professionals in such an overt way?

Myself, I have my home for sale under a non-exclusive right to sell
situation with a flat free ($360) agent, whereby I can close
commission free if I get a free-range buyer, or I pay a listed
percentage (2.75%) to anyone who comes with a buyer's agent (as I'm
also listed in the MLS).

Now, the asking price I listed at and advertise to MLS and FSBO people
alike it _not_ the minimum price I'd accept. But I'll be straight and
tell ya the non-Realtor buyer (who has equal credit worthiness and
closing parameters) will be able to negotiate me to a purchase price
about 1.5-2.75% lower than buyer-with-agent. The Realtor tendered
offer is going to have to be a lot closer to my listing price.

My flat-fee realtor will handle paperwork and offer negotiation, as
required by IL state law. Given how cheap this is, and how much
exposure MLS gives, I have no idea why FSBO people opt to go alone
when MLS can be had for so cheap. ANd being listed also gives a
seller a "go away" sign to all the friggin agents who'll call you
trying to get you to list with them. Being able to say "thank you for
calling. My MLS number is xxxxxx and I'm offering 2.x% if you bring
me a buyer. Appreciate yer call, have a nice day."

As an aside, I've been calling a few sellers who advertise in the local
Pennysaver FSBO. Hmmm... a diverse bunch. My next door neighbor sold his
home in August. He's a very competent individual and long time property
owner (who manages his family's holdings, several homes/ apartment
buildings across town).

A lady I called today had advertised and currently lived in her home,
but knew next to nothing whan I asked a few of the ordinary questions
one asks. Didn't know the size of the lot ("but it's big"), the sq ftg
("but it's 3 bedrooms"). I asked her how she planned to handle the
transaction, she said she had a friend who was a realtor... oy.


Wow. Well, fwiw, square footage of a house is a little tricky. I
can't answer that on my home as the MLS doesn't list it when I bought
it, and I don't feel qualified to provide that information because I
don't know how it's calculated.


Our agent is listing our house, and we will be discussing the situation
with him tonight. We need to make our counter offer by Sat, and his
suggestion as of this moment is to make the offer again at listed price,
and he would take the commission being offers by the seller (not from
us, or half). If the sellers go for that (they seem a tad parsimonious,
so stand by).
The Purchase of this house has the sale of our current home as a
contingency.

Sounds reasonable. You have an out. Depending on the selelr's
situation and the market, they may not take a home sale contingency
though. Cus if your house takes forever to sell, they're in a
waiting game. Great protection for you of course, but as a seller,
I'd not accept a home sale contingency since there are so many ways
that contract could fall apart.

We're prepared to wait, if it comes to that.

Cool. That gives you options. Hopefully interest rates stay low like
they are now in that time.

Enjoyed your response!

Good luck!

--
Todd H.
http://www.toddh.net/