Author Topic: Contract language  (Read 1257 times)

Prepube

  • Stubble
  • **
  • Posts: 245
Contract language
« on: March 22, 2015, 10:08:34 PM »
I am selling some vacant property I own in the Colorado mountains.  It should sell for about 24000.  There are few choices in the area for real estate agents, and i was even turned down on a listing request because it was "too far" from his office. I did find one who says he specializes in this kind of property, blah blah blah. and he'd be happy to list it. Anyway, I have a lot of trouble with contract language in all contexts, and I feel real estate agents are often trying to take advantage of stupid people like me.  Foy you who are good at it, please tell me what this means:

 7. COMPENSATION TO BROKERAGE FIRM; COMPENSATION TO COOPERATIVE BROKER. Seller agrees
that any Brokerage Firm compensation that is conditioned upon the Sale of the Property will be earned by
Brokerage Firm as set forth herein without any discount or allowance for any efforts made by Seller or by any other
person in connection with the Sale of the Property.
7.1. Amount. In consideration of the services to be performed by Broker, Seller agrees to pay Brokerage
Firm as follows:
7.1.1. Sale Commission. (1) 10 % of the gross purchase price
7.1.2 n/a
7.1.3. Other Compensation. n/a .
7.2. Cooperative Broker Compensation. Brokerage Firm offers compensation to outside brokerage firms,
whose brokers are acting as:
Buyer Agents: 5% of the gross sales price
Transaction-Brokers: 5% of the gross sales price.


Does this mean that i am paying the broker 10% PLUS 5% if someone else sells it?

MikeBear

  • Bristles
  • ***
  • Posts: 390
  • Age: 62
  • Location: Michigan
Re: Contract language
« Reply #1 on: March 22, 2015, 10:23:42 PM »
Pretty much a standard contract for a bare land sale, or vacation property sale. You list with them and pay them 10% on a sale, whether THEY produce a buyer, or YOU produce a buyer through separate effort of your own while under contract.

IF a competing RE company comes up with a buyer, the company YOU contract with will split the 10%, so each gets 5%.

So, your costs are 10%, plus whatever is standard in that area for closing costs. Typically, closing costs are completely negotiable between buyer and seller. Whatever you want to pay, depending on how desperate (read: FAST) you want to sell the property.

I wouldn't have a problem signing that contract, especially if I didn't live in the area. However, I would never allow it to go for longer than 3 months maximum at a time, otherwise they can basically hold your property hostage. If they can't sell it in 3 months, YOU can decide if you want to re-negotiate and sign with them again, or go with somebody else.

Prepube

  • Stubble
  • **
  • Posts: 245
Re: Contract language
« Reply #2 on: March 22, 2015, 10:28:45 PM »
Thanks, MikeBear.  Good advice on the term.  They want a one year contract... I will see if i can get that down to six months (to be fair, it won't even be seen until the weather is better and its easier for city-folk to get there).