How do I do this the right way? MLS and Option to Purchase

Question

Hi all and THANKS in advance :)

I've got a client/friend who prefers to sell with owner financing. I would normally take over this property and do a lease option with it. However, the HOA is at capacity for rental units and is being strict about the policy. So... We need to sell this property!

The Seller would RATHER sell with owner financing and NO agent fees. I can provide this service easily for him buy obtaining an option to purchase at an agreed upon price and then advertising to sell the home at a higher price with X amount down, Y% interest, yada yada, and then assigning the buyer back to him and collecting an assignment fee.

However, we don't have much time. So we also want to list the house on the MLS.

Assuming I have an option to purchase the property in my LLC's name AND we sign a NON-exclusive agency agreement with my brokerage firm, is there any issue with me advertising the property as FSBO myself and putting it on the MLS?

We would both be better off if the property is not sold through the MLS (no agent fees, no buyer's agent, no brokerage split, no typical appraisal/inspection hassle, higher sales price, all the advantages of a terms deal).

Are there any particular documents that I need to include in this deal?

Cliff T. · Answer

Non-exclusive agency agreement is stated in OP.

There would be two very different prices. Traditional with lender via MLS would be lower than FSBO with owner financing.

So, does anyone know if there are any particular forms I should use to make sure I operate within the boundaries of MLS policy?

Wayne Brooks · Answer

Your sentence about “listing it as fsbo and putting it on the mls” had me confused.

Yes, I understand Exactly what you are trying to do.....it is just a bit convoluted and I would think cause some licensing conflict issues.

You Can put it on the mls With seller financing offered and and a large enough down payment required to satisfy you both.....better chance of finding more buyers and Netting a better price. A lot of agents have buyers with financing issues, which is what you’re looking for. Just because it’s on the mls doesn’t mean you have do all the traditional “red tape”.

Of course, I hoped you have advised him on the issues of offering financing to owner occupants.

If I owned a brokerage and an agent was trying to simultaneously fsbo a property that I supposedly had an exclusive brokerage only listing agreement on at the same time.....we might have a problem.

Cliff T. · Answer

I meant *at no point do I say "putting it on the MLS as* FSBO"* as Wayne erroneously quoted. That statement makes no sense. You cannot list on the MLS as FSBO...

Cliff T. · Answer

Not really any good advice in there. At no point do I say "putting it on the MLS and FSBO." I look forward to hearing from other people who are familiar with what I'm talking about. Thanks!!

To clarify: FSBO would be listed by me, the agent, since I (my personal LLC) will hold an option to purchase (or interest) in the property and do not need a license to market it in that case.

MLS price will be much lower than FSBO price, since no appraisal will be needed and we can offer lower than the going interest rate and don't have all the red tape and closing costs of a bank. Of course there will be a greater response and buyers willing to pay a premium for this opportunity. My assignment fee will not be as much as 6% of a lesser sales price. The seller is on the same page, nothing is being hidden. The seller and myself will certainly make a greater profit if not sold on the MLS.

Wayne Brooks · Answer

It sure why You would want to be part of this, but:

- doesn’t “putting it on the mls as fsbo” (whatever that means) still assume it will be sold thru a buyer’s agent?

- the whole “wanting to sell it quick with no agent fees” is a sort of self defeating idea.

If you’re going to make a fee assigning, he’s still paying a “fee”, you’re just trying to hide it or call it something else.

I’d either list it as an agent or leave him to his own devices.

Also, I’m sure the property couldn’t be on the mls twice, if I interpreted your post correctly.