Realtor vs. FSBO

[MJ]

MJ
Unless you have some unusual title issues to be cleared or your market is short of appraisers, closing this type of transaction should be no more than several weeks from all terms being met.
Note the ads for DiTech and Lending Tree.
I have recently done a deal with a major s & L and closed the deal in three weeks from application.
nwsteve

The bank appraiser showed up almost Feb 1, 3 weeks after the contracts were signed and 4 weeks have past since then. I just spoke to the buyer and "he thinks" we could have a closing date in 2 weeks. That will make it 2 months since the signing. I was just wondering whether we were both subject to the bank's paper bureaucracy as he says or was he manipulating the mortgage process to delay the start his mortgage payments.

MJ

 

[Martha]

MJ, it does seem to be quite a delay. In my part of the country generally closing occurs shortly after the appraisal because it is the appraisers who tend to run behind. I would ask for a firm closing date and if they can't give you one, ask if you could talk to the lender about when it expects it can close.

 

[brewer12345]

The bank appraiser showed up almost Feb 1, 3 weeks after the contracts were signed and 4 weeks have past since then. I just spoke to the buyer and "he thinks" we could have a closing date in 2 weeks. That will make it 2 months since the signing. I was just wondering whether we were both subject to the bank's paper bureaucracy as he says or was he manipulating the mortgage process to delay the start his mortgage payments.

MJ

Hahahah, 2 months?! That's quick for my area. Fastest I ever managed was 3 months. My buddy is supposed to (finally) close on a co-op in Queens today (think good thoughts for him, please). They were in contract on Halloween - 4 months ago.

 

[unclemick]

7 days - post Katrina - I did threaten to kick the door in and move in after "one month in a motel room" - looked like keystone cops at some points in the process - but everybody bent over backwards and pulled it off.

Intial best guess - was one month minimum.

heh heh heh

 

[tryan]

I was wondering how long should it take for a buyer to get a mortgage. I am losing a chunk of money in daily lost interest.

If the closing date was missed, the buyer should have asked for an extension - in writing - which you agree/disagree to (and sign). A new closing date is in the extension (no quess work on your part).

 

[cute fuzzy bunny]

Yep, you're "out of contract" at that stage. When that happens, I ask for them to pony up more deposit money, fulfill the contract, or I'll go call my backup bids. Seems to get them moving along a little faster.

 

[Nords]

I was wondering how long should it take for a buyer to get a mortgage. I am losing a chunk of money in daily lost interest.

I understand that the deposit is yours, but if the buyer completes the deal then they really haven't paid any penalty for tying you up in the meantime.

Lemme make sure I understand this. In a world full of mortgage money sloshing around the Internet, with 0%-down interest-only variable-amortization loans being taken out by 14-year-olds from Missoula and other canines, your buyer can't get a loan? What would change in the next couple weeks that your buyer would suddenly be able to get a loan-- a parole hearing?!?

Your buyer may not get a mortgage until you get a new buyer. If you still have a valid contract from one of your competing buyers, and if you have the appropriate contingency clauses in your contract with this laggard buyer, then I'd pull the plug. Make them buy you out of the contingency, or at least compensate you for the amount of interest that you're losing, or else you'll find another buyer.

 

[SteveR]

I cannot recall ever taking more than 30 days from initial contract approval to closing. Most contracts have a clause that requires the buyer qualify for a loan in a certain number of days or they lose the deal. I have only had that happen once.

It would seem a fire needs to be lit under your buyer. It should not take more than 3-4 weeks tops to qualify and get a loan approved. I did it in 2 weeks once so I know it can be done pretty darn fast when there is some motivation.


I did a "bargin basement" realtor sale a few years ago. The realtor was an attorney and I should have known better (no offence intended to our resident lawyers) because he nit picked every aspect of the whole process to a point that he was running off potential buyers. I was very near firing him when he finally came up with a good buyer at a fair price. I would never use him again but would go the "bargin" realtor route. It ended up saving me about 2% on the deal which was a nice chunk of change for us. Just be careful who you hire and make sure there is an "out" clause in the contract in case your partnership is less than stellar.

 

[tryan]

Longest closing process I can remember was 5 months. Included the buyer triing 3 different lenders, death in the family , blah, blah blah. Once told the realtor to try the 2 other offers but - of course - they had already found other properties.

The buyer has more to loose than you do, sit tight it'll close.

 

[MJ]

I just got off the phone with the buyer. We actually have at least on the surface a good and civil relationalship. When I called him and asked him to put pressure on the bank because I might back out of the deal, he then asked me to call my lawyer to find out which days he would be available in the coming 2 weeks. I again reminded him that I really don't want to wait another 2 weeks. So I have a sneaky suspension that he may have been doing some delaying on his on. Now I hope the lawyers don't delay my closing due to prior commitments.

Thanks for the advice.

MJ

 

[Retire Soon]

We'll be placing our San Diego home on the market in April.  I've interviewed only one real estate agent so far. From reading this thread, it looks like the commission is negotiable. I wonder if anyone knows what the normal or average commision that someone would expect to pay in the San Diego area. Also, someone mentioned not to hire a "rock star."  I take this to mean a high producing agent.  The agent that I spoke to on Thursday has sold more listings than anyone in my neighborhood.  Is this the type of listing agent I want to avoid?     Also, my cousin's husband is a real estate agent in Fallbrook, which is about 60 miles from where we live.  He'd probably give us a good deal if I asked him.  Is it necessarily better to deal with an agent who is located close to the property being listed?  I would appreciate any input or advice on these issues.

Thank You,

Retire Soon

 

[riskadverse]

3% to the buyer's agent, 3% to the seller's agent is standard for San Diego. There are some discount brokers around, and lots of Help U Sell type of firms. Family agents are fairly common, some firms have hundreds of agents who sell one house every year or two. As a seller, I would personally hire the rock star, but with a short exclusive listing.

 

[Rich_by_the_Bay]

3% to the buyer's agent, 3% to the seller's agent is standard for San Diego. There are some discount brokers around, and lots of Help U Sell type of firms. Family agents are fairly common, some firms have hundreds of agents who sell one house every year or two.

Maybe your area is different, but I believe that should be 3% to the buyer's BROKER and 3% to the seller's BROKER. The agent often gets only a portion of that 3%. Doesn't matter much if you are the buyer or seller (6% is 6%) but the agent does NOT get all of that in many cases. If an AGENT does get the full 3% from his or her side, it is usually be cause they have already met a sizable quota which they split with the BROKER for that year.

Small point, but not if your wife in an agent .

 

[Brat]

Last I heard houses were selling like hotcakes in San Diego.  What services do you expect from your Broker??

If I thought I needed a Broker I would list with one with good results in my neighborhood (they should know the comps at least).  Ask for a list of their sales this last year and contact the sellers to verify that the Broker earned their commission. 

 

[califdreamer]

Last I heard houses were selling like hotcakes in San Diego.

Things have cooled since the frenzy of '04 when indeed houses in SD were selling like hotcakes. Inventory is up, though not out of balance, and houses are on the market a little longer. It's not a buyer's market yet, more like a toss-up between sellers and buyers. All of 2005's appreciation took place in the first half of the year. Market prices have been pretty flat since summer of '05. Still a good time to sell and move equity gains elsewhere.

 

[Brat]

Still a good time to sell and move equity gains elsewhere.

Couldn't agree more.  Now you need to think about marketing, maxing your gains and feeling comfortable about that part of your gain that you spend on selling expense.  Only you know what support you need, I want you to get the best for your money.  Think like a recruiter and hiring manager.  Define your needs, determine what skills can meet your needs, recruit interested vendors, verify that they can do the job YOU want and vet their references.  As any HR professional will tell you, it isn't easy.

 

[LRS]

Last time I was looking for a house, my dealings with FSBOs went like this one:

(Modest home in middle class neighborhood. Surprisingly priced way above other homes in the same area. I call to check it out

Me: How many square feet is the house?

FSBO (addled sounding redneck woman): Uh ... about 17,000 square feet

Me: seventeen THOUSAND square feet? Are you SURE?

Her: Uh ... yes

Me: Former aircraft hanger? Remodeled Home Depot?

Her: Uh ... no

Me: Bye now!

The house I bought was another FSBO that stayed on the market for months priced way too high. Then they got an agent and I was able to bargain the price down to $20,000 less than their original price.

I would think about selling my current home myself now because I've been through the process a couple times, and because my husband has worked for the county in deeds and records before and knows how to research property values, liens, etc.

 

[nwsteve]

I am going to reactivate this thread for an update.
The many helpful comments and observations from the Board resulted in us deciding to use a broker and do a "traditional" sale.
Things that led me to capitulate included:
Greater risks from not being current on all the new sales regulations and compliance requirements and testimonials.

While the potential savings of 20K was attractive, dealing with potential risk that lawyers could quickly consume any savings was not.

Our housing market is still firm but shows some sign of softening and uncertainties. Neighborhood has never been a multi offer neighborhood due to the it diversity of housing.

Since I am still providing consulting services, the time commitment for dealing with showings and qualifying buyers did not offer an attractive return.

Ultimately, our house received a full price offer with only an inspection contingency in less than a week.  Inspector's report (roof issues--sorta of same inspector "wild card" that WAB reported in his sale in another thread. Roof is fine but golly geewiz, it may need a new surface in less than 5 yrs) ultimately cost me 5K but eliminated some other last minute buyer "issues"

Some key learnings:

1. Do your own homework regarding the value of your home.  If necessary do not be afraid to invest in an appraisal before listing. I had to apply some effort to get realtor to fully capture the value in the house.  Realtors want values that sell fast. (The last 10-20K only means $3-500 to their pocketbook). Even then, I think we ended up with a fair value but if I was more a risk taker I might have added another 10-15K (house sold for 690K so less than 2% off).  In our neighborhood, almost every house is different so doing comps is a real art form.

2. Clean, clean, clean.  Realtor was a buzz saw about removing any signs of habitation.  Her focus was to make it easy for the buyer to see their "stuff" in your house--not yours.  Think of a new property--rarely see anything on counters or walls.  I know I did a LOT more of this work than I ever would have had I just did a FSBO.  When property was photographed, it did not look like the place we had lived for the last 26 years.

3. Make sure you call the references of your realtor.  My calls were instructive and made it easier when I challenged her knowing she would do the right thing.  Several of her references volunteered positive comments regarding her solid ethics.

4. Make sure your Realtor is using a professional photographer for MLS photos--huge difference. The photographer took probably 100 pics often using supplemental lighting.  He then photoshopped the images creating almost ADigest images.

5. Inspectors are a seller's nightware.  You have no impact on what they do, they leave a mess, and unless they are totally incompetent, their write-ups are impossible to discount and they become hammers for the buyer.

6. Do not tell your realtor any element of your strategy you do not wanted repeated to the buyer's agent.  You can benefit from this behavior by taking very strong positions with your agent so your position will appear to your buyer less flexible and give you more leverage in the final negotiation. This ultimately helped us as our agent became much more aggressive in protecting our price after I told her we would put it back on the market if there was ANY problem with the current offer.

7. Try to keep the transaction economics in focus.  Even if you know there is more value, do you want to wait to get it. Is it really worth the interruptions in your life to reject a small counter offer to close? 

8. It is hard to appreciate just how you will react to having strangers poking around and hanging out in your living room for a couple of hours, especially when the visiting realtor says they will only be there for 30 min. 

We are not completely done as Buyer has yet to have his bank finalize their appraisal but given his down is probably a low risk.
I will add any fresh "awareness" should we have any surprises in the home stretch.

Now the fun starts!!  Packing for the move

Thanks again to all those who shared their experiences.
Nwsteve

 

[wabmester]

Congrats, Steve! How close was your sale price to Zillow's estimate? We came right in at the high end of Zillow's estimated range.

 

[nwsteve]

WAB
Thanks. As a recent seller I know you appreciate the angst and inspector "joy"
We beat Zillow by over 10% but that is because doing comps in our zip is almost impossible tied to addreses. One block has view of water and mountain, block away no views and housing stock to entire different standard.
Same issue drove me and my realtor nuts trying to get a firm fix on offer price.

 

[Nords]

Some key learnings:

Excellent post, NWSteve. Thanks!