All Forum Posts by: Reese Thompson

@Michael Noto  Sounds pretty ignorant.  But that's okay because if someone wants an agent, they should pay for it.  If they don't want it, they shouldn't have to.  It's more like trying to sell a car instead of fixing one...if you trade it in, you get less for it, but if you sell it yourself, you are able to get more even if it takes a little extra work.

@Tim Puffer  Buying/selling a property is not rocket science, and involving agents increases expenses to buyers and sellers.  That's why many of the investors who've done well have gotten their agent's license so that they can reduce that expense on something that anyone can do.

@Rick Santasiere  So if as other people have noted before that the price of an agent-listed home already includes the commission, that's not artificially inflating it?  Also, there's not even 10,000 people within an hour of this place.  Listing it with an agent is not going to increase his exposure here, or at least not enough to matter.  And if a buyer is really that ready, willing, and able, they'll be willing to make concessions to buy the property.  It could be the case that they pay their agent out of pocket or they agree to a modified price that includes it in their mortgage.

@Thomas S.  Just because it's the majority of the way things are done doesn't mean it has to be done that way.  If the seller doesn't want to pay for having agent representation, he shouldn't have to pay for it.  If the buyers are wanting it, then they should pay for it, not the sellers.

@Daniel Patton

You might check into renovation type loans as well because you might be able to find something that is in your favor based on ARV.

Welcome @Leslie Finley !

On a side note, I did think a little more about the appraisal while I was getting my coffee...He does run the risk of it not appraising for the new amount whereas it would have appraised for the original amount. (and this may have been what @Russell Brazil was getting at). So he would either have to come back and say that he'll lower his price OR that the buyer pays the commission.

Because when he counters, he's going to have it all spelled out ahead of time.  Or he just says that he would have countered x, so to accommodate the agent's commission his price is x/0.97.

The point isn't close vs not close.  That's what the agent wants.  He wants the extra 3 grand in his pocket, so if that can be arranged by a few words in an agreement, then great.  To a lot of people, that would be like getting a month's pay for much less than a month's work. 

@Russell Brazil

Thanks, Russell.

You are correct on him not planning on paying a buyer's agent.  What he was planning on was that a buyer wouldn't use an agent either. 

I'm confused by what you mean on handling the appraisal.  Because if it doesn't appraise, then the bank won't lend and he can't close, so his only option if he wanted to close would be to lower his price.  Is there something else you are meaning by that?

But most appraisers are lazy and appraise it for the agreed upon price anyway. 

@James Wise

Thanks, James.

Say they agree on a price of $100,000 for round numbers.  In a normal situation, the agent gets $3,000, buyer has a property/mortgage based on $100,000, and the seller has a net of $97,000 (minus other expenses).  Instead, if he divides the agreed price by 0.97, that makes it $103,093.  Now if the agent gets the 3%, the seller is still left with $100,000 (no difference to him), and the buyers are ultimately paying the agent's cost (since they chose to use one), but it is tied into the price of the house instead of paying the agent out of their pocket.

My cousin is trying to sell his house without using an agent (For Sale By Owner, FSBO). He called me a couple days ago saying that he received a verbal offer from buyers using an agent. He was frustrated because his intent of not using an agent was to save the commission. The conversation he had with the agent seemed to have a lot of focus on whether or not he would pay her a commission.

So I asked him, "Why would the buyers use an agent when you have it FSBO?" He said that they are first time home buyers, so they were nervous. Understandable.

So I recommended to him that since they are first time home buyers, they are most likely going to only want to pay the down payment and whatever other minor closing costs they have to so that they are using as little out of pocket as possible.  Because of this, he should say that whatever price they agree on, he'll divide it by 0.97 and give the agent the 3% (typical split commission if my cousin were to have used an agent), he's not losing anything extra, and the buyers have that cost tied into their mortgage and aren't out that amount themselves.

I'm curious what other techniques people have used if selling themselves and are approached by a buyer's agent?

I might recommend checking out Smart Start University.  It might be a good source for you to get some ideas to get you some traction on doing things right.