RE fees to consider if FSBO

[Aaron D Young]

Good afternoon,

I am looking at a FSBO. The seller says they are flexible on the price since they are avoiding RE fees. Are the fees just the 6% RE commission or are there other fees I could consider when making a counter offer. I wondered about offering 80% of asking price. First deal, close to home, B- Niche grade neighborhood. I'd be glad to hear some feedback from a more seasoned investor. Thank you. Aaron

[Marci Stein]

Yes, it is 5 or 6% for commission Realtor fees, but don’t let that influence you on its own .
make an offer that you believe to be fair for both of you

[Aaron D Young]

Thank you. I need some reasoning for asking for a lower price. Currently, prrice is outside of 1% rule and I would like it close to there so that the place would meet payments and other expenses along with a positive COCR

[John Clark]

Quote from @Aaron D Young:

Thank you. I need some reasoning for asking for a lower price. Currently, prrice is outside of 1% rule and I would like it close to there so that the place would meet payments and other expenses along with a positive COCR

 Irrelevant. The only relevant factor is what is the market price in that market. Seller doesn’t care about your motivations. Your analysis goes to finding out the current market price (which includes commissions) and subtracting the commission, typically 5 or 6 percent.

No sane seller would care about your investment returns. That’s telling him to leave money on the table.

[Aaron D Young]

I probably could have said what I said in a better manner. I agree with your post.

[Russell Brazil]

Transfer taxes, recordation taxes, lenders title insurance, owners title insurance, closing fees, lender fees, appraisal, survey, deed prep, recording fees, insurance, escrow 

[Aaron D Young]

Thank you for that list. There are a few on there I'm unfamiliar with.  Probably do me good to research some of these. 

[Leonardo Chandler]

When it comes to commissions in FSBO deals, it usually means avoiding the real estate agent commission, which can be around 6%. However, in addition to this fee, there may be other costs such as title insurance, property transfer taxes and others. Consider all of these factors when making an offer. The strategy of offering 80% of the asking price may be reasonable, but it is also important to consider market conditions and the condition of the property.

[Bruce Woodruff]

When I'm selling as a FSBO, I usually use 6% as my seller's fees number - 5% split between 2 agents and 1% escrow/title fees. If only 1 agent, or none, then adjust accordingly. Once you get into escrow, you can get a sellers net sheet with exact numbers.

But if you're doing your first deal, you should definitely use a buyer's agent, there is too much that can go wrong.

[Rick Albert]

Submit an offer you feel is fair and equitable. I agree that you both should benefit by not having agents involved and I would even go so far as to go even lower since you are taking on more risk by not going through a traditional sale. This is especially true if you don't have a lot of experience in real estate purchases. 

Offer the 80% of asking price. Worst thing the seller can say is no.