Posted by Paul Macdonald on November 09, 1998 at 08:30:15:
Bravo!
Cut out the idiot realtor from the middle! If your appraisal allows the pumped up price go for the full 9K!
Anytime a buyer uses this type of contribution he/she is still paying it right? Instead of taking it out of your pocket you’ve tacked it onto the backend of your loan. Still your money, still your bill.
Only difference is you don’t come up with the cash, and you get to write off the interest… Sweet!
Posted by Elton Allen on November 05, 1998 at 08:03:04:
All,
I have an offer that I want to present to an out of state owner, and there is a problem standing between me and the seller… which is the Remax agent… she refuses to make the offer on this house, because it does not follow the standard format of deals?? I know that by law she must submit any and all bids, but I’m trying to not make waves… it does anyone know of a tactical way that I can deal with this agent without her feeling theatened… hum…
Posted by Darren (MA) on November 05, 1998 at 12:35:14:
I don’t know what the problem is with some of these Real Estate Agents anymore. I recently made an offer and the selling agent didn’t know what to do with himself. First, he got several other agents from his office involved, then they called me and said “You can’t do that.” I assured them that I can and I did, and suggested they just present the offer. He mumbled about having never seen an offer like that in all his 17 years of doing business. Finally, he said he’d make the offer. So we hang up, several hours go by and I get a call from my Mortgage Broker, saying that they called her and told her that I couldn’t do what I was trying to do. She assured them I could, when they started to protest to her, she suggested that they leave the financing to her and for them to focus on what they’re legally supposed to do. PRESENT THE OFFER. They finally did. 23 and a half hours after I had made it and half an hour before it expired. Nice. And guess what? The seller accepted it. No problems. Then the next day, I get a call and the seller has “changed his mind” after consulting with his agent and would like to change a few things. We DID come to an agreement that was mutually satisfying, but it was truly an example of how this real estate agent proved to be more of a hindrance than a help. (I know some of you may be thinking that the listing agent had the sellers best interest at heart. That really wasn’t the case. The issue he was disputing had no repercussions to the seller. The agent just didn’t understand it, and didn’t want to do it). Useless I tells ya, useless.
Posted by John(NH) on November 05, 1998 at 09:37:29:
Contact the seller directly and let them know what is
going on. You don’t have to make the offer through the
agent, but she would still be entitled to her
commission.
I hear ya. I’ve had to literally beg and sometimes threaten agents to present offers. A good many of those offers resulted in purchases. The problems seems to be ignorance on the part of the agent. They just don’t have a grip on anything other than what they learned in RE school.
Posted by Redline on November 05, 1998 at 09:56:33:
Going direct to the owner would be one way to go - but believe me you will make waves this way also.
I would remind her of the fact that by law she MUST present this offer. If she refuses, threaten to go to her broker and/or the local RE commission. That should do the trick.
Posted by Darren (MA) on November 05, 1998 at 13:23:28:
I just don’t understand it. Even if the offer is really low or something, what difference does it make to them about presenting it. They’ve got nothing to lose and everything to gain. Even a lowball offer will usually open up negotiations between the buyer and seller. I know that agent is trying to make money but around here for every ten thousand dollars, the difference to the agent is only about $137 dollars. So even if I came in twenty thousand under selling price, it only made a difference of about $274 bucks. What’s the big deal? It beats having the property sit vacant for several months.
Posted by Darren (MA) on November 05, 1998 at 13:03:21:
Nothing out of the ordinary. I’ve never paid closing costs on any of the houses I have ever bought, and I don’t plan on starting now. In my offer I had the seller pay $5000 toward my closing costs. (THAT, was the first thing the agent didn’t like. He said it was too much, too high, and I couldn’t do it). I also put no money down (so to speak) with the offer and the purchase and sale agreement. ($250 with the offer as consideration, and $250 with the p & s). Although I DO have to come up with the remaining 10% at closing, I didn’t want to tie my money up in the meantime. (This was something that the agent just couldn’t bring himself to do. He also whined that he would prefer I use a local bank rather than my mortgage broker who had already pre-qualified me for THAT property before I even looked at the place. I told him that whomever I used to secure my financing was my business, not his). I asked for the units to be vacant at closing, broomclean, and all personal belongings and debris removed. (He also didn’t like that, because there was a lot of debris to be removed and he didn’t think it was fair of me to let the apartments sit vacant in the meantime. Which by the way, they both were). He also wanted me to write a letter explaining why I wanted to buy the building and how I planned on using it. He said he likes this info just so he can keep it in his files. I also made the offer contingent upon my selling another property in the meantime. Believe it or not, he had no problem with that. Go figure.
Posted by Ken NJ on November 05, 1998 at 10:07:36:
Another thing you need to worry about is how the realtor presents the offer. If the realtor needs to be forced into presenting an offer, then he will obviously not put it in the best light.
To get around this, put a clause in the offer that you must be present when the offer is presented. Exercise that option and at least you have the opportunity to speak to the seller directly. I know they are out of state, but presently you have little shot at the property with a bad realtor.
I’m not sure what kind of math you are using to come up with that figure, but $10,000 is about $700 in commission. Where did you ever come up with the number $137 ? That’s insane. Even if the agent had a 50/50 split with his broker, he would come out with $350 on the $10,000 difference.
Is $350 a lot of money? No. But it’s a lot more than the $137 you came up with.
However, as an agent, if I had an offer come in $10,000 low, I would still be happy to have the home sold. Having my commission of $X,XXX lowered by $350 is better than getting no commission at all. Most agents seem to forget this fact.
Wow, that agent is way out there. It should be none of his business what you plan to do with the property. When he asked you that, you should have asked him what he was going to do with his commission, and write you a letter so you could keep it in your files. It has the same relevance.
The same goes for your choice of lender. That’s none of his business. You are the one paying off the loan.
The only thing he is remotely right on is the closing costs. $5,000 is a lot for the seller to pay, but not unheard of. In some cases though, it is illegal for the seller to pay that much on the closing costs. It just depends on what type of loan you are using. Some have limits on seller contribution. Your lender should know what he is doing though. If he says it’s ok, and the seller says ok, the freakin’ agent should keep his mouth shut!
Re: Hum… Realtor Headache - Posted by Eduardo (OR)
Posted by Eduardo (OR) on November 05, 1998 at 12:30:15:
Good advice, Ken. I would always put such a clause in any offer where a Realtor is involved–whether you choose to exercise it or not can be decided after you evaluate the agent’s co-operativeness.
Some of the other posts to this discussion seem to indicate that the agent may be deciding on his/her own whether to submit the offer or not. Note that all agents work for their brokers and follow the policies set by their brokers. If an agent refuses to submit a creative offer to a seller, then they are usually doing just what their broker has instructed them to do. More often than not, the broker is the problem. Threatening to tell the State real estate license regulating authority may be effective, but if the agent has rapport with the seller, they’ll see to it that your offer is perceived of as “not in the best interests” of the seller and rejected. There are really only two good solutions to this kind of problem: Be present when the offer is submitted in order to try and persuade the seller it is a good, bona fide offer in their best interest, or go behind agent’s back and try to do a deal directly with seller. On this last, seller may be responsiveness if they are getting fed up with an agent who promised them lots of offers and is not bringing any. Note that agent will be protected as to commission if property is sold anytime during listing period and a certain amount of time beyond spelled out in listing agreement.
You can always have “your” agent submit the offer. The commission is not any larger if two agents are involved instead of one.
You can also attach an addendum with a place for their signature that they declined your offer. On the same addendum you can add counter offers with different structuring and let them fill in the blanks.
Posted by Darren (MA) on November 09, 1998 at 06:50:50:
The real estate company I’m reffering to generally has a 5% commission, opposed to the 7% you presented. And in this particular case, it was definitely 5%. From there, the 5% gets split 50/50 between the listing brokerage and the selling brokerage. Then the listing agent, assuming he’s a level 2 agent, which he is, will then get 55% of that. Which comes out to $137.50. Not a huge chunk of change.
$10,000 x 5% = $500 (TOTAL COMMISSION)
$500 x 50% = $250 (LISTING COMMISSION)
$250 X 55% = $137.50 (LISTING AGENTS SHARE)
Aren’t you glad you’re not an agent at this place?
Re: Illegal??? What are you talking about??? - Posted by Paul Macdonald
Posted by Paul Macdonald on November 09, 1998 at 08:21:53:
I’d really appriciate your telling me what Federal or State laws would be broken with a 5K seller contribution?
The underwriting guidelines for conforming loans up to 3% seller contributions with under a 10% downpayment and they allow a 6% seller contribution with 10% and over downpayments. Nowhere have I ever seen a restriction to the actual dollar amount.
Fry any realtor (and I spelled it with a small r on purpose) who tells you that you cannot do it any way you want to that is legal!
Posted by Darren (MA) on November 09, 1998 at 06:55:22:
Geff,
I know $5,000 sounds like a lot for the seller to pay, but the loan program I had planned on using allows the seller to pay up to 6% of the purchase price. (In this case, it would allow up to $9,000). And what’s the big deal if he pays $5,000 toward closing costs but I offer him a bit more in the asking price. It’s just money that doesn’t initially come out of my pocket. The seller had no problem understanding this, the agent, well . . . that’s another story.
I was assuming that you personally weren’t working with another realtor, if you were, I would figure you wouldn’t have that much problem with this guy. Your agent should be able to handle him.