I sold residential for a year or so and was amazed at how high the commission rates were (late 1980s). Average was about 6.5 % (Suffolk County, NY).
There is now a company called YHD Foxtons. They advertise 2% commissions, but this limits you to only their salesforce. If you agree to step up to 4%, they will put you on the MLS - the best way to go as far as exposure. Have seen other brokers offering similar rate. Proof that competition is good for the consumer.
I seen a house for 70K I think I can flip but has a realtor sign to call out front, can I call the seller and work independantly from the realtor with the seller? Would this violate any laws? Would the seller have an option or is he/she bound to an exclusive contract? From Indiana-
Bargan with the agent. He/She will work with you even if he/she is taken a loss. A little money in one hand and nothing in the other. I’m sure he/she will take any reasonable offer.
Posted by K.EDISON on January 17, 2002 at 20:30:38:
Why dont you make the offer through the realtor. Is the house vacant and in need of some work ? How long has it been vacant? How long has it been on the market ?
Posted by james young on January 08, 2002 at 16:46:31:
how do you flip? without having to close? EXAMPLE: can you sell the contract without taking title to the property if so how please be as specific as you can. thanks.
…you know how. As a generalrule the seller will have to pay the commission anyway, even if you go around him. More specifically this only applies during the term of the seller’s listing agreement with the broker. If however. the broker introduces you to the seller, in many states the seller could be liable for the commssion, even if he sells to you after the listing agreement expires.
Don’t go away yet, there may still be a practical way to deal with this situation. I often try to find a way around having to pay the broker and deal directly with the seller, just like you want to do. I would have another real estate agent from a different company make an inquiry as to how long the listing agreement lasts and/or when it expires. Agents have a trick of leaving their signs out in front of a house, long after their listing agreement expires, if another agent isn’t engaged right away. Then when you call to ask about the house the agent will stall you while he phones the owner and tells them he has a hot prospect, and tries to get them to renew the listing agreement for another 6 months. The broker won’t tell you his listing agreement has expired if you don’t ask him. Once you give your real name to the agent, the owner will probably be stuck with having to pay the commission anyway if you go around the broker. This will cause the seller to not want to lower his price by the amount of the commission. 6% of 70k is $4,200. Thats a lot of money for such a small amount of work (of going around the agent).
This is what some people do. They contact the seller directly and ask how long the listing agreement lasts. Then they tell the seller to call them when they are legally free to deal directly with you as a buyer. They just leave their phone number and wait. Sometimes they don’t have to wait very long because many listing agreements are just about to expire. Also it is remotely possible that the broker does not have an exclusve contract with the agent, though this will not be very common. Regards, doc
Re: You can often avoid RE commissions if… - Posted by Artist Johnson
Posted by Artist Johnson on January 13, 2002 at 06:59:10:
How would you like it “doc” if a patient came to you then you didn’t get paid for your work? Don’t try to scam people out of their duly owed and invested return on investment.
Re: You can often avoid RE commissions if… - Posted by Artist Johnson
Posted by Artist Johnson on January 13, 2002 at 06:56:35:
This is pathetic, why would you want to cheat an agent out of his/her duly earned and owed return on investment, for that’s what it truly is. We agents invest our time and yes our money in selling your property, if it doesn’t sell we don’t get a dime and a waste of a lot of time.
I know this is the “do everything yourself” age but face it, the big boy’s don’t even try to do everything themselves. The time you waste ( yes waste, that scheme won’t work) could be better spent looking for and buying other property.
Only a true amateur would try to scam a professional out of his duly earned fee.
I have read your guy’s comments on flipping a property and what happens if the property you want to flip might have a realtor’s sign on it.
You might be able to do a number of things. But first I would like to comment on Mr. Artist’s posts. No matter what kind of deal the Buyer and Seller work out either independently of the realtor, or with him/her, as long as the realtor has a current listing on the property when the property sells, then he/she is legally entitled to the agreed upon commission. So in fact, it might be in the realtor’s best interest to agree upon a non-exclusive listing with the Seller because even if the Seller finds the Buyer himself and decides to sell the him/her the home, the realtor would receive his/her commission without having to expend as much energy as he/she would if having to find the Buyer his/herself. The point is the realtor would get paid regardless of the details of how the home is sold as long as he/she has a valid listing at the time of the sale.
Now-as to the flip. Dr. Whisler mentioned a good point which can work whether or not a property is listed with a realtor. That was that the Buyer could sign a contract to purchase the home and and then simultaneously flip, or quick sell the home to a rehabber or an owner occupant. More specifically say both you and the Seller (and the realtor if need be) agree on both a specific sales price of home and time table for you to close on it. You have all ready determined from research that the home has good margin available between the price that both you and seller have agreed upon, and what you can flip it for, then by all means try to flip it by the time period alotted for closing. If you find someone to sell it to before the date of closing, then the both the Seller and the realtor get paid that much earlier. If you are unable to find someone by the date of closing, then both you and the Seller at that time can agree to an extension of the closing date or you can agree to terminate the agreement. You have to make sure that you put all the specifics in the contract, be it a FARBAR or any other type of contract. I myself have found a home where I am going to try to do just this. This home is a FSBO, and the owner has put about $30K into completely remodeling it. However, he has a big mortgage on it and he has indicated that he will sell it to recover $25k out of the 30K he put into it. I have researched the home and have determined that there would still be 15K margin available at the price he ha indicated that he will take. So what I want to do it sign a contract with him and then immediately try to sell it to a owner occupant before the closing date. The home is a 4 bedroom 2 bath, and needs nothing except for some exterior stucco siding. So I think that I could find a few potential buyers to sell it to by the closing date. Well, I hav babbled enought for now. I hope this you in determing whether you could make some money with the home that you are thinking about flipping.—