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Updated over 6 years ago, 04/19/2018
FL MORTGAGE BROKER: LIST property to sell fast and save too
As a Florida Mortgage Broker for a long time now and like other Mortgage Brokers who've been in the business since the 90s, I've been involved directly or indirectly, on many thousands of purchases deals.
In this seller's market, if you can't or don't want to do a FSBO, here is what you do.
Instead of listing a bunch of steps in this initial post, I'll number them as we go.
STEP 1
Contact a Buyer's Agent who does not have to split the 3% listing or 3% buyer agent sides of transaction with their Brokerage.
So called "Experienced" agents that are still surrendering 25%, 30%, 40% , 50% to their Real Estate Brokerage are generally either new, part-time or don't have the mindset for this way to help investors sell property quickly and save too. I ain't seen too many Employee millionaires and a 25%, 30%, 40% or 50% commission split with their Real Estate Brokerage will have an Employee Mindset as well.
Furthermore, serious investors should not be penalized & limited by a realtor's choice to work where they have to give up so much of the 6% Realtor Points to their Brokerage.
Contact a successful agent who doesn't have to split the Realtor Points with their Brokerage. All they have to pay is a $300 to $500 per deal Transaction Fee or a $500 mo. fee to hang their Lic. and they keep 100% of the 6% Realtor Points Pie!
@jay h, I only read the first line of your post as soon as I saw you wrote early 2000s no need to read the rest.
Those days are over number 1 and number 2 this site is for Real Estate Investors that are not Realtors too isn't it?
I'm sure you and the rest of the ones chiming in our successful but I'm also sure there are many hundreds reading this that are not as successful and need these life changing tips
For anyone looking at this strategy I would caution that this strategy assumes the premise that the agent is the one making the decision to buy the home.
I agree that the statistic from NAR is that 97% of buyers purchase their home through an agent.
The typical agent will only look on the Multiple Listing Service (MLS) for a property.
If my goal in selling the home is to get top dollar I want to expose my home to the largest buyer pool possible to hopefully create competition on the home and sell quickly for more money. This necessitates placing it in the MLS.
Traditionally the only way to get into the MLS was to list your home with an agent.
This is no longer the case. Today you can pay a flat fee to list your home in the MLS.
In addition, you can place your home FSBO on sites like Zillow and Trulia and get significant interest without the MLS today.
The reason people pay the additional 3% for a listing agent today is primarily for the concierge service, market knowledge and time saved by using a listing agent.
In the strategy above, the author relies on the premise that offering a 4% incentive to a buyer's agent will sell you home. In theory this makes sense. The agent will be more incentivized to show your home to his client.
What that doesn't take into account is that the reason listing agents suggest lowering the price if they don't get immediate interest is because homes sell for only 2 reasons. Price and Exposure. If the property is in the MLS you definitely have exposure (although some agents do it a bit better). If the house doesn't get interest it is not because the agent isn't impressed with his 3% commission. It is because the price is too high for the home you offering in that market. The only way to solve that issue is to reduce the price. The agent can whisper in his client's ear all day long but at the end of the day people won't be able to afford more home just because the buyer's agent will make more and they won't overpay for a home either.
If you're looking to save money as an investor you can use a flat fee service and sell the home yourself or you can hire a listing agent and pay for the additional services they bring you (marketing, showings, follow-up, negotiating, market knowledge, etc.).
Feel free to connect if you are in such a situation and want some advice.
Nobody answered my questions above, so see below
On a $500,000 purchase with a $400,000 loan amount how much could 3 points in Discount Points paid by $12,000 Realtor Rebate, buy the rate down ? apprx .750%
Now using that interest rate savings, what is that savings over 30 years on a $400,000 mortgage loan?
apprx $65,000
@Account Closed
Today's life-changing tips:
1. treat your REALTOR like the fat kid in 5th grade
2. regardless which side you are on, reduce your commission
3. take any savings and send it to your mortgage broker
- Tom Gimer
@Tom Gimer, you either don't grasp the concept or you are trying divert attention away from the 800 pound Gorilla in the room sitting on a mountain of bananas at closing, that 6 Points in Real Estate commission.
It's not about paying me more, its about helping my clients save in ways they otherwise would never have made available to them.
Buying a home is not hard, but many buyer's agents are terrible negotiators and actually end up making the process a lot harder.
As a Florida Mortgage Broker, when I receive a lead off my website and have a Pre-Approved borrower ready to buy, why shouldn't I refer this lead to my Rebate Realtors?
@Jorge Zea wrote a while back on BP responding to @Jay Hinrichs
Where do commissions come from? (they don't come from Paris like babies do)
BP members are mostly able to sell a property on their own, handle contract, consult an attorney, title company - we all have a support team already around us (or should be building one fast). What we need the most is get the property on the MLS without having to offer the entire 6% commission.
Use a Flat Fee listing service that charge $99 to get it on the MLS and syndicate it through the Internet - Zillow, Trulia, Realtor.com, Redfin, Movoto, HotPads, etc, etc, etc - (no other services provided); they post the max amount of pictures allowed; you have to offer a commission for buyer agent to get on the MLS and DIY from there on.
BTW, buyers' agents are who do most of the work all the time anyway (deal with mortgage bank, show the property, write the contracts, do the negotiation, deal with inspections, appraisals, surveyors, title company, etc - they deserve their commission) - You save at least half the commission. (traditionally 6%, but as Jay Hinrichs says: commissions are negotiable.
So now lets understand where commission come from and how they affect your bottom line. They have a HUGE impact on your ROI and particularly on your CASH ON CASH. Commissions come directly out of your equity but are calculated from the entire sale price .... huuuummm. Stp, breath deep (twice) and think about it - (I suggest you glance at the sky while you digest this and breath deep)
Example: an imaginary one, but will show the impact of commissions on bottom line. - a Flip.
The Acquisition:
Acquisition cost $100,000 (purchase price + closing costs)
Rehab: $25,000
ARV: $160,000 (assume this is the sale price)
Assumed you get investor to finance you 75% of project: ($125,000 x .75) = 93,750
Your equity (cash for "cash on cash" calculation): $31,250 (100000+25000-93750)
Now the sale:
Sale price = ARV $160,000
Sale commission 6% ($9,600) - traditional listing agent.
Other closing costs: ($2,500) (lets ignore the interest for this exercise)
Profit: $54,150 (160000-9600-2500-93750)
Cash on Cash 73% (54150-31250)/31250 ---- VERY SWEET INDEED.
....BUT ASSUME YOU GO WITH A FLAT FEE LISTING SERVICE (FOR $99) AND OFFER 3.0% COMMISSION TO BUYER AGENT
Sale commission 3%+$99 ($4,899)
Profit: $58,851 - (160000-4899-2500-93750)
Cash on Cash 88% (58851-31250)/31250----- MUCH SWEETER
Your see how a small % change in the commission has an exponential effect on your Cash on Cash due to this simple fact: Commission come directly out of your equity while commissions are calculated on the entire sale price, which a large portions is leveraged by the loan. - a change in less than 3% in the commission impact your Cash on Cash by 15% - WOW! - Magic hat trick,
NOTE, the larger the leverage, the more exponential impact will the commission have on Cash on Cash.
Meditate about it ... run numbers and always use flat fee listing services ... it is worth for you to do the listing agents work and save a ton of money and make your CASH ON CASH ridiculously better. Bond with the buyer's agent and he will be a huge support - he wants his commission regardless of how much the other side os getting.
Wait a minute, at the start of this entire thread you had some scheme to have the listing agent only take 1% and then offer 4% to the buyers agent. When we asked why not to just flat fee it, you went off on some tangent about rebates and agents stealing your clients. Now you are switching this entire thread away from your "10 Tips and roadmap" to "sell with a flat fee broker"....... which we asked why not just do that in the first place?
So your new "ground breaking scheme" is to flat fee list a property with 3% to the buyers agent and handle the contracts and showings yourself?
Which has been a viable option for years and for those comfortable with the process it still is.
- Mike Cumbie
@Mike Cumbie, BINGO!
I'm not reinventing the wheel as Realtor Rebates have been available for a long time.
What I'm doing is talking about how investors can expect a lot more rebate money these days and how it can be best applied for maximum savings and benefit.
This is a subject that realtors can't win in these new times and with access to the internet.
It is very easy to buy and sell real estate these days, so if a buyer can save a huge amount of the equity in a property given away in Realtor Points to ANY buyer agent, why shouldn't a Mortgage Broker help them do it?
Buying and selling real estate is not hard and nowhere near as hard as Originating loans in 2018!
OM Gosh! First Keller Williams is getting into the Realtor Rebates and now a
Mortgage Company, RP Funding is jumping in too?
Originally posted by @Account Closed:
OM Gosh! First Keller Williams is getting into the Realtor Rebates and now a
Mortgage Company, RP Funding is jumping in too?
Give us $20k in business and we'll pay your ~$5k in closing costs.
OM Gosh!
Next they'll be in the title business.
- Tom Gimer
@Tom Gimer, you're already or will be coming under assault soon by online Title Companies too right?
We in the mortgage industry have already been the victims of the witch hunt after the melt down, being blamed for everything under the sun and the sun setting as well! (i.e. The Dodd Frank Act)
And during this decade, you've watched the Mortgage Industry witch hunt evolve with the torcher of the mortgage industry, with massive over regulations & mandatory cuts in our compensation. And throughout all this, not a Mike Foxtrot peep from the Federal Government or from oblivious Consumers in regards to your Compensation.
Up until now, Title Companies and Real Estate Companies' Compensation has not been in the crosshairs, has been flying low under the radar, and for the most part have enjoyed a good long, easy ride on Ol'Betsy, the 6 Points Cash Cow!
