Author Topic: Seller (property) contracts  (Read 2301 times)

Workinghard

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Seller (property) contracts
« on: January 21, 2015, 03:09:49 PM »
Okay, I decided not to go the FSBO route and interviewed different realtors. I have one picked out and started the contract process. However, I have some questions and would appreciate some feedback. We have not signed anything yet.

On the listing agreement he put the brokerage fee 6% which is standard, but put his fee 5% if sold by another realtor.  I thought they were supposed to split the fee. I did ask about closing costs and he jotted down some figures but didn't write up an actual paper for it. I realize it's just an estimate. He also listed it way longer than what we want. Have not talk to him about anything yet, as I wanted to post here first and webmay not end up going with him after all.

As the seller, what forms should I expect to see? Any thoughts or suggestions?

« Last Edit: January 21, 2015, 04:42:29 PM by Workinghard »

Workinghard

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Re: Seller (property) contracts
« Reply #1 on: January 21, 2015, 04:44:16 PM »
Am I spoiled. Over 3hrs and no response. Lol

AlwaysBeenASaver

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Re: Seller (property) contracts
« Reply #2 on: January 21, 2015, 05:00:53 PM »
I live in CA and the standard is that the seller pays 6% to the realtors (buyer's realtor and seller's realtor), and each gets half of that 3%. The estimate of closing costs was given to me by the title company, not the realtor.  I'm not sure what the 5% is, I'm guessing that's to make sure this realtor doesn't do a lot of work to sell it, then you turn around and finalize the sale with a different realtor. If it was me, I'd prefer to have something in the contract limiting how long you are in contract with this realtor. For example if it's on the market for some number of months and you don't feel he/she is doing their best to sell it, you might want to switch realtors. I don't think the realtor should be offended if you mention wanting this in the contract.

Workinghard

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Re: Seller (property) contracts
« Reply #3 on: January 21, 2015, 05:27:13 PM »
I live in CA and the standard is that the seller pays 6% to the realtors (buyer's realtor and seller's realtor), and each gets half of that 3%. The estimate of closing costs was given to me by the title company, not the realtor.  I'm not sure what the 5% is, I'm guessing that's to make sure this realtor doesn't do a lot of work to sell it, then you turn around and finalize the sale with a different realtor. If it was me, I'd prefer to have something in the contract limiting how long you are in contract with this realtor. For example if it's on the market for some number of months and you don't feel he/she is doing their best to sell it, you might want to switch realtors. I don't think the realtor should be offended if you mention wanting this in the contract.

Thank you for replying. I am a little confused on the percentage too. The contract, or listing agreement shows brokerage fee 6%. Below that under special terms it says "seller authorizes active with contract status 5% if sold by listing realtor." I have no idea what that means and I have not asked him yet. I definitely want and eight month contract with a $395 withdrawal  fee.  No way I'm signing that.

thedayisbrave

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Re: Seller (property) contracts
« Reply #4 on: January 21, 2015, 05:40:24 PM »
The contract, or listing agreement shows brokerage fee 6%. Below that under special terms it says "seller authorizes active with contract status 5% if sold by listing realtor." I have no idea what that means and I have not asked him yet. I definitely want and eight month contract with a $395 withdrawal  fee.  No way I'm signing that.

Best bet is probably to talk to him directly, as it varies state by state so we can give you guesses but nobody knows for sure what he means but him.  I'd guess that means if he brings the buyer he's asking for 5% to represent both of you (dual agency) but I could be wrong.

Eight months is pretty long and I've never heard of a withdrawal fee.  Just like with many things, real estate can be negotiated. 

iamlindoro

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Re: Seller (property) contracts
« Reply #5 on: January 21, 2015, 05:48:19 PM »
Thank you for replying. I am a little confused on the percentage too. The contract, or listing agreement shows brokerage fee 6%. Below that under special terms it says "seller authorizes active with contract status 5% if sold by listing realtor."

What your realtor is saying is that the fee will be 6% if he has to split it with a buyer's realtor, vs. 5% if your realtor brings the buyer.  Since in that case your realtor won't have to split the fee, and he makes more money, he's proposing something that will make that arrangement more appealing to you than the buyer being represented by their own realtor.

That said, there is ALWAYS room to negotiate these things.  You can and should try to get the fees down, and the length of contract down and no withdrawal fee.  Make him work for your business.

jackiechiles2

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Re: Seller (property) contracts
« Reply #6 on: January 22, 2015, 03:19:18 PM »
I'd look into a flat fee listing realtor.  I googled one for CA, and you can get a full service realtor there for $525 plus .5% at closing.  Or, you can do just the premium package for $379 with no additional expenses.

Workinghard

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Re: Seller (property) contracts
« Reply #7 on: January 23, 2015, 03:33:55 AM »
His flat fee is $2500. That's a lot to put out if he doesn't sell the house. I guess it's back to the drawing board. We're going to wait until fall because we'll be gone a lot this summer and I'm not sure how the Internet will be where we're going. Years ago we got in a contract selling a rental when I was in Haiti, and I said I would never do that again!

Buyers do a lot of their own research. The more I think about it the more I think a flat fee broker is better.

jackiechiles2

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Re: Seller (property) contracts
« Reply #8 on: January 23, 2015, 09:05:00 AM »
His flat fee is $2500. That's a lot to put out if he doesn't sell the house. I guess it's back to the drawing board. We're going to wait until fall because we'll be gone a lot this summer and I'm not sure how the Internet will be where we're going. Years ago we got in a contract selling a rental when I was in Haiti, and I said I would never do that again!

Buyers do a lot of their own research. The more I think about it the more I think a flat fee broker is better.

That's my thought.  Granted, I don't have experience working with a flat fee broker, so it's hard for me to say one way or the other.  That said, brokers really don't do a whole lot other than take some photos and put a lockbox up and post the listing online.