Originally posted by @Steve Vaughan:
Originally posted by @Dennis Maynard:
Originally posted by @Steve Vaughan:
Originally posted by @Dennis Maynard:
Curious, are you getting market price or are you having to cut your pricing because buyers expect a discount when you sell by owner? NAR stats suggest that FSBO owners receive substantially less (almost 30%). In some of my recent observations of discount brokers and FSBO websites, the amount of web traffic and views they receive is 50% of what a real estate agent brings to the table. So I'm curious on your experience.
Also, the taxes are prorated based on the sale date, but are customarily paid by the seller. If the seller already paid the taxes, then there will be a credit from the buyer to the seller.
Originally posted by
@Steve Vaughan:
Originally posted by @Dennis Maynard:
Steve, every market has different customs. As Aaron is buying he will not be paying taxes on the property, that's the sellers responsibility. Commissions also fall to the seller unless otherwise negotiated with the buyer. I always suggest that a buyer or a seller ask for a "draft" of their Settlement Statement from escrow, and use an agent to guide you through the negotiations so you are not paying for items that you don't need to.
Originally posted by
@Steve Vaughan:
Originally posted by @Aaron Hunt:
Hey Guys,
Really appreciate any responses and guidance here.
This is my first investment purchase, property is in Livermore California, and we are in closing. As I type this, I am reviewing the disclosures from the lender and I see the following:
Title - Closing/Settlement/Attorney Fee for $1,625 Title. The Purchase price is 656K
Question: Does this seem right? I am not sure what this fees is for and seems a bit high to me. (I will ask the lender, but I wanted to inform myself before I speak to them)
This seems completely reasonable for settlement fees.
The real fun begins with the lender. If not direct, I'd expect your origination fee alone to be $6k. Lender's insurance, more than $1000. Doc prep and underwriting fees are worth sneezing at, too.
Pre-paids will be a lot, but those are pre-paying interest, insurance, taxes, etc. Commissions will be in the $10s of thousands as well. The seller will 'pay' those, but the money came from you essentially.
The fun is just beginning!
Interesting property taxes aren't prorated in your area.
I agree new buyers are best represented by a good agent, but to say commissions aren't paid from buyer funds is a bit not right.
I sell by owner often. I ask at a price net of commissions, but if a buyer wants to be represented, they just add the commissions to the offer, a la carte Some do and I am glad they do. It makes it easier for me, but try to tell them their agent was free.
They happily pay for their representation but aren't under the guise of commissions being 'seller-paid'.
Selling by owner I net the same. I also am only selling mid-grade rentals that have punch list sweat equity needs. I would probably list my primary if selling that. That's where the 30% or whatever discount numbers are quoted. My FSBO rental sale was $250k, primary much higher. Stats say FSBOs sell for less.
An example of a rental I sold last year. Completely beautiful and staged would list for $239k. I sold by owner for $226 + agent and closing cost help.
The buyer had an agent and wanted $4k in closing costs so we settled at $239k plus my buying a 1 year warranty of $500. I did more admin tasks but got to pass some savings along to a first time buyer couple for not having to fix the gate or gutters, repair the yard, replace the dishwasher, etc.
So do you think you would net more by getting more exposure if you listed? I'm looking at these guys on discount sites and shaking my head...
No, I wouldn't have netted more had I listed and it would've been a lot more work and indigestion getting it 'market ready'.
FSBO attracted a flexible and tolerant buyer. I only had to give a $5k discount for an $11k roof replacement because the buyer was willing to do a lot of the work in exchange for having some equity going in. He had equity going in because there wasn't a LA to pay.
I've listed before, perfect and staged. I had to go over 3x per week to close and lock the back door, turn off lights and the a/c etc as random agents and people looked at their leisure. I also fell out of contract multiple times with financing and inspection issues. Horrible experience I may be willing to go through on my primary but never again on a rental.
So with regards to the agents and follow up, sounds like a lack of clear criteria to gain access to the property. Listing Agent responsibility. With inspections, I can't comment on without being a part of it. Financing issues should have been double checked prior to getting into escrow. Doesn't matter if FSBO or listed.
Listing a property doesn't always have to be market ready with perfect staging. Sometimes it's just as simple as basic clean up. Sorry to hear that.
In LA, it absolutely makes a difference to list with an agent. The exposure difference is massive. Keep in touch, happy to answer questions if you have any.
