Selling my house. Could use some advice

[MJ]

I finally took the 1st baby step in the process of selling my 2 family house. I met with a Foxton RE agent today primarily to pick his brains.

Since I am retired, I thought, I would sell the house without using an agent.
In the past, I have only sold 1 RE property and I didn't use an agent. The market was pretty depressed and didn't feel like giving up another 6%. It was vacation property. Of course I used a lawyer to handle the legal end.
Unlike my previous property, I will be looking to sell my house for some very serious money. As I said, I met with a Foxton agent today, he gave me the whole song and dance about the advantages of having an agent (him) sell the house. They charge 3% comm.

Even though I have time on my hands, will a good agent do a better, faster job in selling the house and get me more money to boot to offset part or all of the commission.

I need to find a lawyer and I was wondering, since this is a residential property, should I still get an RE attorney or will a general practice attorney do just as good a job to protect and advise me.

Finally, if I sell my house without an agent, is there any advice or experiences you can share?

Thanks

MJ

 

[MasterBlaster]

many people sell their own homes, and many will swear by that approach.

The problem however ,with selling a house yourself is getting much buyer interest (buyer traffic) in your house. Also people that buy For-Sale-By-Owners (FSBO) houses are experienced buyers and usually want a deal better than an agent will deliver. I wonder if you'll actually take home any more money doing a FSBO than using an agent.

Also, watch out for some of the shady real-estate types that prey on inexperienced FSBO sellers. Your house could get tied up in an insincere offer. This might be someone that will only close the deal if house prices jump upwards generating a profit for the speculator to flip. Or you could wind up in a lawsuit from one of those shady types that specializes in that type deal.

If you price your house higher than the FSBO market, your house may just sit on the market and may get the reputation of being a dud. Furthermore if the housing bubble starts to deflate and you price the house too high, you could lose money as housing stock deflates. If you, out of misinformation, price the house too low then there's money that you'll never get back.

Therefore, I suggest that you use an agent backed by a reputable broker. They do offer you a little legal protection and hopefully good advice as to how to price your home to sell in a reasonable timeframe. I have to agree though that their fees are pretty high for what they do.

Having said that, My neighbor sold his own house by himself at a good price by just putting a sign in the front. There was no other advertising besides the sign. His house fronts the lake and people walk by on the sidewalk around the lake - so that's the potential buyer traffic. He's no novice though when it comes to real-estate.

 

[califdreamer]

It certainly seems like agents get too big a cut of the sale price and, when you think about it, an even bigger percentage of your capital gain. Having said that, the FSBO route would seem to be a tough one. If you sell the house yourself, you would probably end up paying a fee to a discounter to get on the MLS, which is, after all, the most powerful tool for selling a home. You'd get a ton of calls from agents soliciting a listing. Some agents with serious buyers might steer clear of homes for sale by owner or by a discount broker (keeping the cartel alive). Buyers would be looking to share some of that commission money you're saving and, of course, you'd tie up a lot of your free time dealing with everything.

In the end, it seems best to follow the old advice... interview at least three agents that are experts in your area, find out what the going commission rate is (more expensive markets may pay only 4.5-5%) and work with who you're most comfortable with.

 

[CZAR 8]

Good Posts from Califdreamer & MasterBlaster. They
echo my thoughts about agents and comm. rates.
Interview 2 or 3 more agents from different agencies,
ask alot of questions, then trust your gut. Remember
their rates are not set in stone, and would add that a
lawyer that specialize in Real-Estate is a wise invest-
ment.

 

[Brat]

My opinion: offer the going rate to the buyer's realtor and use a discount realtor to list the house on both the local MLS and Realtor.com, and a state of the art lock box.  Yes, line up a real estate attorney.

Develop a list of questions for the realtors you interview.  I would include questions about preparing your house for sale (ask for the names of house stagers), price, current time on market.  Go to open houses of properties in your sale price range so that you can see what the competition looks like.  If homes have sold in your neighborhood interview the purchaser to learn how they found the house, what realtor did they use, what was their buying experience.

Home inspections are common.  In my daughter's area the seller gets the inspection, makes it available at their realtor's office - home is offered 'as is'.  In my area the purchaser hires the inspector.  Find out what your community practice is and how the inspection impacts negotiations.

Once you are ready and have a price in mind put out the word in the neighborhood (before signing a listing agreement).  Word of mouth may bring the buyer to your door.

 

[Mr._johngalt]

Some good advice here.

Re. "using an attorney"............I think the last time I used one
(for a real estate deal) was 1980, and that one was very complex.
Anyway, I do a lot of my own "legal work" and have saved a fortune by doing so. No problems so far (knock on wood)

JG

 

[kat]

MJ, are you, as I recall, in New York state? If so, I'd suggest first asking an attorney you may already know and see if he or she can handle it. Real estate sales are very straightforward in NY and pretty easy, relatively speaking. A lawyer you know may be cheaper. The seller prepares the forms (fill in the blanks) and the deed (proof-reading ability).

kate

 

[SteveR]

3% seems to be the going rate for both the selling agent and the buying agent. That means 6% total right off the top of your home sale. Sometimes you can negotiate a lower rate for your broker but don't expect much.

I have used a low cost broker and it was a PITA for the most part. Maybe it was just him but it was my worst experience buying or selling over 8 houses so far. I saved about 2% but the aggavation factor was right up there too. Think cheapo everything and paying for extras at everyt turn. No thanks; not again.

You can sell it yourself but be marketing is an issue. It is difficult in not impossible to get into MIL without a broker (racket!) so you may have to rely on the "free" listing services. These are not the ones most people would visit since they usually use a buyer agent that will expect the seller to pay their 3%. If they don't see a commission out there on a FSBO, then they will not show it to their clients. The whole system works for them. You can do it on your own but it will usually take longer and will require someone who is not working with an agent; not too many people do that.

Good luck. We will be selling in a couple of years too and I don't look forward to the ordeal. FSBO would save a big chunk and we may start out that way and see what happens. I thing there is a $750 fee for the service but what can you lose by trying except a broker fee?

 

[MJ]

Thanks for all the advice.

I'll probably try it alone for several weeks.

I need to find a"good" lawyer. The only lawyer I know lives 5 houses down. I would use him but I don't know it it would be wise since he lives is so close to my house. If he didn't think the buyer was right for his property the neighborhood, he could unintentionally create delays.

I am also concerned about getting locked into a credit unworthy buyer. The agent I met with yesterday said they check whether the buyer has the credit to get a large mortgage even with a sizeable downpayment. How can I determine that?

Also, watch out for some of the shady real-estate types that prey on inexperienced FSBO sellers. Your house could get tied up in an insincere offer. This might be someone that will only close the deal if house prices jump upwards generating a profit for the speculator to flip. Or you could wind up in a lawsuit from one of those shady types that specializes in that type deal.

How would an agent or myself determine if I am dealing with such people?
Since neighborhood has been pretty hot, I got a cold phone call last summer from a RE "investor", interested in my house, even gave me a price without seeing the inside of the house. I contacted them last week and they said if they bought the house, and since this would be an all cash transaction, they could close in less than 1 month BS or true (I wonder)?

3% seems to be the going rate for both the selling agent and the buying agent.

You mentioned buying agent, I thought most people go to RE broker looking to buy properties listed by sellers. I could see someone possibly getting a buying agent if the property was well over $1000k.

I checked out craigslist and found a few ads for my neighborhood. I'll try them 1st.

The ER adventure continues.

Thanks again.

MJ

 

[SteveR]

You mentioned buying agent, I thought most people go to RE broker looking to buy properties listed by sellers. I could see someone possibly getting a buying agent if the property was well over $1000k.

The buyer's agent is a RE agent that works for the buyer only and not the seller. It is intended to keep the under the table deals between agents to a minimum. It is not just for large deals, I used one on the last couple of houses I bought. I think it keeps them focused more on you and your interests but it is still such a racket.

Good luck.

 

[Brat]

It is absolutely a racket, although some realtors earn their pay when the seller or the property is a PITA.  It grates my DH no end that the reators get as much to sell a house as an architect does for designing it.

In my area the 'traditional' commission split is 3% to the realtor who found the purchaser, 3% to the listing realtor.  Because homes are hot and prices high many listing realtors are shaving their part of deal.  My son and brother recently sold their homes in Portland, the realtor total %s were 4% with MLS (different realtors). 

I have a research oriented personality so I would really want to know if there is a realtor who finds the purchasors in my neighborhood - that is the person I want to reward.  The listing realtor is the seller's advisor and the one who puts it on MLS.  If I don't need advise that is the place to save $.  The listing realtor is also present at any open houses (you don't really want to be there).

My comments are based only on observation. We sold our last house without a realtor (NW Portland).  When we go to sell this house a realtor will probably be necessary as they seem to have a corner on the home marketing on the island.

 

[Nords]

Do it, MJ!  You have the time and the worst that will happen is you'll learn a lot.  You can always bail out and call a realtor, but it's next to impossible to do it in reverse.

We've always sold our own homes and I highly recommend Nolo's FSBO checklist.  Nolo used to publish a FSBO book that may still be available at your local library-- the advice is timeless.

Forget the potpourri & the baking bread, but do advertise that it's a FSBO on Craigslist & in the local newspaper's "Open House" section.  Craigslist moves much faster around here and we don't even bother with classified ads anymore.  Professional buyers will appreciate the FSBO and their discounted offer usually attempts to share the savings with you.

HGTV's "Designed to Sell" advises getting rid of ALL the clutter (even kitchen countertop appliances) and taking down all your family photos (so that buyers can imagine themselves living in "their" house).  And it's also an amusing show, as is "House Hunters".  You'll realize that this is not so hard.

Be ready for "Can we view the house?" phone calls at all hours of the day & night.  They're frequently made by people sitting in their cars at the bottom of your driveway and watching you through your picture window, so have the home inspection-ready at all times.

Keep a sign-in sheet for your open house.  You want names & phone numbers so that you can remember who came when and what questions they asked.  We used to review those sheets after the OH and make notes of their comments.  It helped us answer questions and improve the next week's OH (we only needed six of them for both our sales).

Have several copies of the purchase paperwork available for prospective buyers.  Some of them are willing to buy on their own but have no idea how to fill out an offer form, so if you give them the paperwork to get them started then their mindset shifts from "What do we do now?" to "Let's get this done!"  If they want help filling it out then advise them to get a realtor.  

Realtors can be amazingly pushy.  Every one of them has a cash buyer standing in the driveway if you'd only give them a 3% courtesy.  We always nodded & smiled and agreed to do so for a full-price cash offer, which for some reason resulted in them never bothering us again.  But you will spend a stupendous amount of time talking to realtors who will do little or nothing for you.

The agent I met with yesterday said they check whether the buyer has the credit to get a large mortgage even with a sizeable downpayment. How can I determine that?

It's not your problem, you don't care, and you ditch them in a heartbeat if they screw this up.  Include a contingency in the contract that buyers have 48 hours to vacate their financing contingency when you present them with an offer from a cash buyer.  If you're really concerned, then include another contingency voiding the contract if they don't obtain at most xx% financing at no more than a xx% APY within 30 days.  The risk of the second contingency is that you may drive away first-time buyers who are struggling through the paperwork.

The cash buyers & speculators are usually for real (offset by a lowball price), but again that's what the title/escrow company and the lawyer are for.  If the buyer deposits the funds into escrow then you really don't care what drug deals savings they have.  The key is to not get sucked into taking back a mortgage.

Luckily you're ER and so probably pretty easygoing already, because the hardest part of FSBO is to see every instrusive tire-kicker as a potential customer.  One of our buyers looked at our place on a Tuesday night-- we let her interrupt our dinner plans for a 90-second walkthrough-- then just nodded & smiled on her way out the door.  But the following week she made a cash offer, let us handle all the paperwork & closing, let us rent it back from her for a couple months, and has become a lifetime friend.

 

[Brat]

Be ready for "Can we view the house?" phone calls at all hours of the day & night.  They're frequently made by people sitting in their cars at the bottom of your driveway and watching you through your picture window, so have the home inspection-ready at all times.

Need I remind you to remove ALL your valuables.  I would never let a stranger in my home without re-enforcements.  Not all who want to view the house are interested in the realestate.

 

[Outtahere]

Need I remind you to remove ALL your valuables. I would never let a stranger in my home without re-enforcements. Not all who want to view the house are interested in the realestate.

That's very true and was just recently in the news here. Several houses were hit by husband, wife and child, wife and child created the distraction while husband checked out the good stuff. This was all done WITH a real estate agent on the property so don't think just because the agent shows the house that they are watching the clients.

 

[tryan]

Where a realtor is worth thier salt is in keeping the first time buyer in the "game". If your house - and most duplexes are - is a starter home, 3% is a steal. Confirm this will be split in the event of a buyer broker.

Getting the buyer is only start. Finding $$ is the most important piece. Not many have the connections into the mortgage industry to fit the buyer and then hold him/her in the process to the end.

I have yet to meet anyone who has completed a FSBO with a first time buyer. But know of many who have attempted and failed more out of fustration (blind leading the blind).

 

[MJ]

Keep it coming.

Thanks again.

MJ

 

[Brat]

Several houses were hit by husband, wife and child,  wife and child created the distraction while husband checked out the good stuff.  This was all done WITH a real estate agent on the property so don't think just because the agent shows the house that they are watching the clients.

 I wonder if the agent had verified the mortgage lender?

Thought:
You could require that a prospective purchaser that you don't know make an appointment and be accompanied by their realtor.  Have an agreement for the prospective buyer's realtor prepared where you agree to pay (whatever the buyer's realtor commission is in your community) and they agree that they have contacted the prospective purchaser’s mortgage lender to verify that they are qualified for the asking price of the property.  If they are a cash buyer then require that the realtor has verified assets with the banker.  No sign, no show.

I would rather pass up a potential buyer who won't go through the hoops than waste my time or risk my life with lookie-loo or worse.

If you are selling a ‘two family house’ consider how you will show the other living unit. 

 

[GTM]

MJ I believe you are in one of the NYC boroughs. If I had a home in one other than Manhattan I would sell ASAP.

Many buyers buy because the bank will give them the money. They have imigrated to the area, have relatives and friends that live there and in the past have paid the prices.
These prices will not hold up.
These homes are not worth it, they are old and the only thing going for them is location.

I would try a broker using a flexible contract and challenge him/her to get you a good price. If they do give them their money.

Also try and sell on you own, try and build that in the contract.
Market people like your neighbors. They may have a brother in law that is looking. Cut them deal.

A single guy holding a 500K home makes no sense to me.
Use the money somewhere else, buy somewhere else or wait for the NY market to change.

And get a good lawyer. Real estate lawyers are not that expensive.

 

[Nords]

One of nice things about a hot RE market, aside from the obscene cap gains, is the number of customers trying to beat down your door. It gives you plenty of time & options to cherrypick.

I would rather pass up a potential buyer who won't go through the hoops than waste my time or risk my life with lookie-loo or worse.

Absolutely. If they don't know how to fill out the form you give them, then point them toward their own realtor and let them pay their own tuition buyer's commission.

I would try a broker using a flexible contract and challenge him/her to get you a good price. If they do give them their money.

Also try and sell on you own, try and build that in the contract.

When you're doing a FSBO, you can offer flexibility to as many brokers as you want. The one bringing you the full-price cash offer, of course, is most likely to actually receive that commission. And there's nothing wrong with taking five or six backup offers, either.

 

[NYCGuy]

Keep it coming.

I sold my Manhattan apartment in the Spring and was glad that I used an agent. Here it seems the only way you get your property into the local database (called a "Rollex" or something like that) is via an agent. That is what you pay for and, for me, it was worth it. I hated paying the 6% since I prefer to do everything in life by myself if at all possible. High quality buyers in Manhattan use a buyer's agent (whom you, the seller, will pay). Buyer's agents won't look at FSBO's, of course.

I interviewed four agents, hired one, fired her almost immediately, and settled on the first guy I had interviewed. As expected, he lied to me. I learned a lot interviewing them. In the end the apartment sold in 10 days, after a bidding war, for 13% above my ask. I am pretty sure that would not have happened without an agent.

Eventually, the Internet will toss RE agents onto the same heap with travel agents, but that time is still in the future.

Good luck.

 

[nellieb]

If you have no intention of listing with an agent don't waste his/her time by having them come to your house. They have familes and bills just like you. If you need to get info get it by phone.

 

[justin]

MJ,

I sold my residential condo in Chapel Hill, NC recently FSBO. It was a big hassle, all just to save $6000 or so in commission. I'm sure I got a price as high as I could have gotten with a realtor. The problem was I had a lot of people just starting to look at properties, and not really ready to buy. For me, it was a 30+ mile drive up to the condo to show it, and I had to prep it before each showing. Sometimes I would have no-shows who didn't call to cancel. I must have shown the place 30 times before I sold it sight-unseen to a couple from California. If I had to do it all over again, I probably would have gone with a 1% or flat fee $599 for the listing agent, and then paid the 2.4 or 3% commission to the buying agent. My place spent six months on the market before I decided to rent it out for a while. Then I eventually re-listed it as an investment property (with high-quality tenants in place), and it sold pretty quickly.

 

[MJ]

If you have no intention of listing with an agent don't waste his/her time by having them come to your house. They have familes and bills just like you. If you need to get info get it by phone.

They sent me a letter a while back and I decided to call out of curiousity. I told them I really didn't plan on using a broker at the present time. Even though I was upfront with them, they still suggested I see their broker. I figured I have nothing to lose. I was hoping to get information and the broker was hoping to sway me. It was a investment of time on both of us.

Thanks for telling me what I NEED to do.

MJ

 

[KB]

MJ

I sold my last house using Help U sell. The Help U sell broker did the advertising, put up the sign outside and loaned me the signs to put up for openhouses. I did the open houses. He also did all the contract paperwork and opened escrow. For that, I paid $4950.

I could have added MLS for an additional fee, but didn't feel I needed it. Had the broker brought in the buyer, the fee would have been double. My house sold for 324K, and the 6% sales fee would have been more than 19K had I used a full price broker.

I will use the service again when I sell this house.

 

[SteveR]

MJ

I sold my last house using Help U sell.  The Help U sell broker did the advertising, put up the sign outside and loaned me the signs to put up for openhouses.  I did the open houses.  He also did all the contract paperwork and opened escrow.  For that, I paid $4950. 

I could have added MLS for an additional fee, but didn't feel I needed it.  Had the broker brought in the buyer, the fee would have been double.   My house sold for 324K, and the 6% sales fee would have been more than 19K had I used a full price broker. 

I will use the service again when I sell this house.

I used the same company too. My experience was less than positive but I believe it was more due to the @sshole agent and not the company itself. I did save a couple of thousand by using them but the aggravation factor was very high. He could not find a buyer himself and keep pissing off anyone who saw the house by constant followups with them. Another broker found a buyer so I still ended up paying 4-5% commission on the sale. He used MLS and some recorded drive by radio gadget along with fliers and a listing on the Help U Sell website. Other than that, he only had a ton of excuses.

Next time will be after I am retired and I will have more time to supervise an agent. I would do it again but with additional control over when I can fire the jerk.