Selling home FSBO and may have offer?

[W2R]

Well, my wife did it, not me (put the house up FSBO). We did get the offer today (expires Tuesday) for our asking price but the buyers agent wants us to pay a 3% commission (even though they are working for them, not us). I am ok with this but am worried about having to also pay an attorney, title insurance and other costs (1.78% goes to WA state excise tax..it adds up).

I wish we had just listed with an agent, then they would be making all of these decisions and we would only be out another 3% max. But the wife is always correct, right?

So now I am trying to muddle through all of this.

My opinion is that you need to take charge of this situation and get a good agent immediately. Leave FSBO for those who have spent some time learning about it first. You can do that next time.

Tomorrow you can smooth things over by buying your wife some flowers and taking her to a nice place for dinner.

 

[haha]

Here is a petty good summary of a real estate closing In WA, done in the common way by a title company. I have never experiences or used any other method in WA or CA, the only two states where I have any experience.

Understanding the real estate closing process in Washington | findwell

Ha

 

[travelover]

........ but the buyers agent wants us to pay a 3% commission (even though they are working for them, not us).............

I'd tell the buyer's agent to pound sand or as a minimum, pay less than 3%. Unless you agreed to it, you don't owe it.

 

[NanoSour]

I sold two homes in WA by FSBO (96' and 05'). I picked up the RE contract at the local Office Depot and brought the signed contract and down payment to a local Title Company and they handled the closing. Both times I had moved out of state before the closing and everything went without a hitch. The title company held the deposit in escrow until the closing and then wired my share of the proceeds to my bank account.

It was very easy.

 

[Ronstar]

I sold a house in Il FSBO (no agent for me or the other side). I did have a real estate attorney who guided me through the process. How to get the offer in writing, doing the re contract, preparing all of the necessary documents, scheduling and handling closing/ disbursements.

 

[RetireAge50]

I would hire a real estate attorney to review all the paperwork. No need for your own agent. The buyer is found. You pay the attorney and the buyers pay their own agent.

 

[Fermion]

My opinion is that you need to take charge of this situation and get a good agent immediately. Leave FSBO for those who have spent some time learning about it first. You can do that next time.

Tomorrow you can smooth things over by buying your wife some flowers and taking her to a nice place for dinner.

W2R, normally you give great advice but you way overestimate the ability of flowers to console this wife. If I go against her on this FSBO I may be making posts about how to handle finances through divorce. Ok, I am joking a bit. I hope.

She is very stubborn, usually right, but kind of stubborn. Very high IQ (probably top 0.001%) and stubborn (might have mentioned that already).

 

[ExFlyBoy5]

I would hire a real estate attorney to review all the paperwork. No need for your own agent. The buyer is found. You pay the attorney and the buyers pay their own agent.

This. An attorney will be your fiduciary and will make sure all bases are covered, for MUCH less than an agent will cost. My wife is a RE broker and she agrees with me. Hiring an agent would be a waste of money at this time.

Sent via mobile device. Please excuse any grammatical errors.

 

[W2R]

W2R, normally you give great advice but you way overestimate the ability of flowers to console this wife. If I go against her on this FSBO I may be making posts about how to handle finances through divorce. Ok, I am joking a bit. I hope.

She is very stubborn, usually right, but kind of stubborn. Very high IQ (probably top 0.001%) and stubborn (might have mentioned that already).

Aw, thanks for the compliment. Personally I *LOVE* flowers but I suppose that differs for different women.

Maybe chocolates? (Just kidding!)

 

[haha]

W2R, normally you give great advice but you way overestimate the ability of flowers to console this wife. If I go against her on this FSBO I may be making posts about how to handle finances through divorce. Ok, I am joking a bit. I hope.

She is very stubborn, usually right, but kind of stubborn. Very high IQ (probably top 0.001%) and stubborn (might have mentioned that already).

Sounds like fun.

 

[harley]

W2R, normally you give great advice but you way overestimate the ability of flowers to console this wife. If I go against her on this FSBO I may be making posts about how to handle finances through divorce. Ok, I am joking a bit. I hope.

She is very stubborn, usually right, but kind of stubborn. Very high IQ (probably top 0.001%) and stubborn (might have mentioned that already).

Not to mention the advice of throwing thousands (and maybe 10s, depending on the house price) of dollars out the window, just for a feel good feeling. Hmmm...sounds like having a FA.

There are enough books and web sites out there about selling by owner that Fermion could have all the knowledge he needs in a day or two. I've been through many home sales, and the only value the realtor brings is in finding the house. The title company and possibly an attorney are all that is needed.

As far as paying the buyers agent, the very best I would do is split the price. And that's only if the buyers agent was involved in the buyer finding the home for them. If not, it's the buyer's issue.

Since we (if it happens) aren't going to have an agent on either side, I'm willing to split the 6% with the buyer. He'll get the house a little cheaper, and I'll make a little more.

 

[Texas Proud]

Well, my wife did it, not me (put the house up FSBO). We did get the offer today (expires Tuesday) for our asking price but the buyers agent wants us to pay a 3% commission (even though they are working for them, not us). I am ok with this but am worried about having to also pay an attorney, title insurance and other costs (1.78% goes to WA state excise tax..it adds up).

I wish we had just listed with an agent, then they would be making all of these decisions and we would only be out another 3% max. But the wife is always correct, right?

So now I am trying to muddle through all of this.

Well, a RE agent does NOT make these decisions.... they just pass along what is offered.... YOU make the decision as it is you who is selling the house...

The RE agent just wants to get the house sold...

 

[Fermion]

A little update to our saga. We just had another couple tour the house and are very interested. No offer or anything (they just left) but it is nice to have such interest in the house the 2nd day on the market. I had been running financial scenarios thinking we might have to take a really lowball offer considering all of the here and there maintenance the house needs. I do think the first couple is the better prospect since they have pre-approved financing with 20% down but this other couple did not have an agent so there would not be that issue. The wife was tripping over herself on how beautiful the house and river were but the guy was being a bit more thoughtful and silent. He did perk up when I mentioned we were throwing in the hardwood pool table and poker table to whoever buy the house.

 

[Dog]

Inventory is low in our area of the Puget Sound area of Washington (Mukilteo). There are a handful of houses in our general area and only one FSBO. It went up about the same time as the other three, so I'll see how it does. The houses are moving quickly here.


Sent from my iPhone using Early Retirement Forum

 

[pb4uski]

We have done two sales FSBO and one purchase of a FSBO property. In our state, the buyer and seller would each have real estate attorneys who handle the P&S contract, title search, title insurance, closing, etc. IIRC it costs ~$400 for the attorney.

Expect to hear on another FSBO offer we made on Saturday tomorrow.

Funny, now that I think of it our first 3 real estate transactions (2 purchases and one sale) were through a realtor but the last 4 (2 purchases and 2 sales) were all FSBO.

 

[daylatedollarshort]

What agents do in our area often is they set a date and say they will review all offers on X date. If you have multiple families interested and your house is priced below market maybe that would work for you.

We have always had a real estate attorney review our home buying and selling contracts and avoid using realtors when we can help it. We use escrow companies for drawing up and signing the documents.

 

[mrfeh]

Not sure if my advice would change depending on what state you live in...but my advice would be to get a real estate lawyer ASAP. You should run everything (all offers/counter offers/contracts) through your lawyer.

We sold our last house by ourselves, and that's what we did.

 

[haha]

Here is a snippet from a local RE writer/blogger where some home buyers give opinions on real estate transfer customs.

Let’s look at the math in this example:

Home sells for $400,000.

Sellers owe $300,000.

Gross gain is $100,000.

Agents get $24,000, or 24 percent of the seller’s equity. Then the county takes 2 to 2.5 percent so subtract another $8,000, leaving the seller $68,000. If the sellers took out a second mortgage to get repairs done and do some painting or staging for the sale, subtract another $8,000 (roughly), and we’re left with $50,000 profit.

So the agents and brokers take home $24,000 in commission while sellers get $50,000 profit — nearly 50 percent of the take.

Agents and their commissions might have made sense in the 1950s for people moving across country who didn’t know a thing about neighborhoods, crime, homes or local prices. Now, all of these can be researched online and comps pulled up.

It’s a dinosaur industry, and the players are doomed.

The 6% commission: Is it the best way to pay agents? | The Seattle Times

Darn few homes selling for $400,000 in Seattle today, except tiny, old, obsolete if not unsafe houses. One son and DIL recently sold an OK but nothing special town home in Ballard on the first day of the listing, for $600k+. Except in the far south and perhaps far north of Seattle City there are not many modern, no shared wall houses available for less than ~$1mm. The builders will not/cannot build small when the lots costs so much. So agents would walk away with 6% of $1mm, or $60K. Not too shabby.

It seems that messing with residential real estate is worth it when you are able to buy really well, or if you are a skilled flipper or if you hate rental accommodations, or you see affordability issues coming down the road Otherwise, avoid a real risk, save yourself a lot of time and worry and instead of working in the yard, go to the beach or the mountains or the fishing stream. Put your money in your index fund allocation and party on.

I have spent 1/2 my adult life as an owner, and 1/2 as a renter. I have always made money owning, but preferred renting. I own now, because my retirement income and resources would not have guaranteed me that I could certainly remain in my chosen central area of a fairly expensive city. Even if my other son moved to a new job/city, there are few places I would want to move, and all of them more expensive than here.

I think some other cities are very nice, but I am a creature of habit and my feelings about my home city are very positive, and have always been so.

Ha

 

[Fishingmn]

I'd tell the buyer's agent to pound sand or as a minimum, pay less than 3%. Unless you agreed to it, you don't owe it.

It's more likely that the buyer's want you to pay 3%, not the buyer's agent.

I'm guessing that the buyer has signed a Buyer's Representation Agreement stating that they will pay the buyer's agent/broker 3% but that this amount will be reduced by whatever amount is received from the seller or listing agent.

Therefore, the buyer is on the hook for the 3% if you don't pay it.

So it comes down to whether they want to pay 3% extra on top of what they offered or they will reduce their offer amount accordingly to account for the amount they will need to pay their agent. That answer will come down to their level of motivation and whether they think the home is still a value at 3% more.

 

[Fermion]

House is under contract now. We are splitting the 3% with the buyer and they struck out a few clauses we did not feel comfortable signing. They really really want the house, and I guess getting over a half acre on a top salmon/steelhead river, a 4500 sq-ft house with 5 car garage, all about 40 minutes from Seattle was a good enough deal at $285k.

I am pretty confident the sale will go through since they have 20% down for a conventional loan, but you never know about these things. Still, it looks like we will be homeless in 45 days

Now we can go park our RV in front of haha's condo in Seattle, or partake in Seattle's waterfront free RV park for homeless drug addicts (I have a mean coffee addiction).

 

[harley]

That seems an extraordinarily low price, to me. I don't know the market out there, obviously, but I'm selling an 1800 sq-ft house with no garage in poor shape on a dirt road on the Shenandoah River in VA (don't eat the fish) and expect to get in the $225K-$250K range. It's on 3 acres, but 2 of them go straight up, and about 1.5 hours from DC. Is property really that cheap out there?

 

[haha]

It's more likely that the buyer's want you to pay 3%, not the buyer's agent.

I'm guessing that the buyer has signed a Buyer's Representation Agreement stating that they will pay the buyer's agent/broker 3% but that this amount will be reduced by whatever amount is received from the seller or listing agent.

Therefore, the buyer is on the hook for the 3% if you don't pay it.

So it comes down to whether they want to pay 3% extra on top of what they offered or they will reduce their offer amount accordingly to account for the amount they will need to pay their agent. That answer will come down to their level of motivation and whether they think the home is still a value at 3% more.

Congrats on your contract. Here's hoping it goes to closure.

Ha

 

[RunningBum]

That seems an extraordinarily low price, to me. I don't know the market out there, obviously, but I'm selling an 1800 sq-ft house with no garage in poor shape on a dirt road on the Shenandoah River in VA (don't eat the fish) and expect to get in the $225K-$250K range. It's on 3 acres, but 2 of them go straight up, and about 1.5 hours from DC. Is property really that cheap out there?

That's for sure, especially since the first looking made a quick full offer, and the second looker seemed ready to.

It's the OP's business, but I'd rethink this "wife is always right" policy. It's one thing when she's wrong about a tax issue that'll work itself out when you fill out the forms. It's another when it's probably leaving 10s of thousands of dollars on the table. Maybe I'm out of line, but I feel like if this was a woman posting about her husband being this way, a lot of people would be telling her to assert some control. I don't know why it should be different with the roles reversed. That's all I have to say, and in disclosure, I'm divorced and probably not one to listen to for relationship advice.

 

[Fermion]

I am leaving out a lot of details about the work needed on the house (roof work, siding, deck, plumbing) and the square footage I quoted would be after some unfinished rooms are finished.

$280k ($285k minus the split commission) is a below market price but not horribly out of line with the house condition and this area. Prices do drop off dramatically as you go east from Seattle. A 3900 sqft riverfront HGTV quality home with a new $50k kitchen a few blocks from us (also on the river) was on the market for 7 months at $450k and finally sold for $400k this March. We had a couple of agents do a walk through last year and they suggested because of the work needed on the house that we list it under $300k.

So we came up with $295k - $15,000 saved in commission and decided a quick sale by owner at the $280k level would be better than potentially spending many months on the market to get top dollar.

There is a lot lower stress in a sale knowing that your buyer is getting a good deal and is very unlikely to want to back out.

So my wife probably was right after all.

(and remember, before we retired my wife was making $280k A YEAR, and if potentially we need to get some cash early in retirement she still has tons of contacts in the software industry all over the country)

 

[haha]

Removed since it had nothing to do with Fermion's deal, his wife or anything else other than my general social commentary which is likely best kept to myself.