Selling a house

[omni550]

DanTien,

Click on run at the bottom and on the results page you get:

Please help keep FireCalc online!

I hope this was helpful to you as you plan your retirement. If so, perhaps you'd be willing to donate the price of a beer toward the cost of maintaining this website. As an early retiree myself, I don't want to have to go back to work to pay the costs of keeping the site up!

If you found FireCalc useful, and want to make a small contribution, please click on either button below. (PayPal is preferred; they charge less for the service. With Amazon, your contribution is anonymous.)

You'll be taken to a PayPal or Amazon website where you can read more and decide what you'd like to do.

Thanks in advance!

Use PayPal
* * * *

omni

[Danny]

Quote:

Originally Posted by Nords FIRECalc's donation link is on this page. Usually you only see if it you run a scenario and view the results. (Or you could just click on the link in this paragraph.) Apparently you have a mistaken impression that there's a correlation between the words "leader" & "moderator", right guys? We moderators get free coffee (we have to arrange our own delivery) and unlimited FIRECalc runs. Oh, and 2x overtime after regular working hours... But, hey, the heartfelt appreciation of the rest of the board members is more than enough compensation.

Thanks Nords.
So what your saying is you're not donating at the LC level?
How about at the next level - Moderator Circle and have a server named Mighty Nords

[Danny]

Quote:

Originally Posted by omni550 DanTien, Click on run at the bottom and on the results page you get: Please help keep FireCalc online! I hope this was helpful to you as you plan your retirement. If so, perhaps you'd be willing to donate the price of a beer toward the cost of maintaining this website. As an early retiree myself, I don't want to have to go back to work to pay the costs of keeping the site up! If you found FireCalc useful, and want to make a small contribution, please click on either button below. (PayPal is preferred; they charge less for the service. With Amazon, your contribution is anonymous.) You'll be taken to a PayPal or Amazon website where you can read more and decide what you'd like to do. Thanks in advance! Use PayPal omni

Thanks omni!

[Danny]

I just joined Paypal to do the donation - PP says they will put 2 deposits in my bank account and to check it in 2-3 business days and then get back to them and verify the amounts! Then I can use PP. I'm getting kinda excited.
Hold on dory its going to be a little while longer.

By the way not that this would be a motivating factor, no no believe me, but tell me eh...can I put this down as a ahh charitable contribution...

[Nords]

Quote:

Originally Posted by DanTien By the way not that this would be a motivating factor, no no believe me, but tell me eh...can I put this down as a ahh charitable contribution...

I think it's a tax-deductible investing expense, right?

[Danny]

Quote:

Originally Posted by Nords I think it's a tax-deductible investing expense, right?

Naw, I don't think I could justify that based on your recs MOVI - thats in the gambling losses category... and I'm being charitable...

[cute fuzzy bunny]

Dan - belatedly i'm with Nords: take the money and run.

Unless you listed the property below market to stimulate offers that is, or the market prices have moved upwards since the home was listed and you were thinking of raising the price.

The $10k back thing is typical of people with no cash for their up front costs. I did the same thing with my wifes house that we sold earlier this year. Couple that was scraping by to get into homeownership and could make payments but couldnt put together five figures for down payments and the rest of the upfront costs...so not all of these are speculators or people working from scripts bought from tv speculators. In fact I'd bet (with no factual substantiation) that most of the cash back buyers are just trying to buy a house before the prices slip too high for them to afford.

While its worthwhile to watch the pennies, I see way too many home sellers and buyers screw themselves up or screw up the deal over what amounts to pennies. I watched one neighbor selling a house screw up the deal because the buyer wanted him to put in window screens (house had none) and the seller decided he wasnt going to do it. Cost would have been a couple of hundred bucks tops. Saw a guy in my dads neighborhood that played tough guy hardball with his realtor, insisting on how much the house would be sold for, what his cut of that would be, and how much involvement he'd have in the sale (none). Too bad that he wasnt that smart a guy, as he could easily have made 10-15% more on his home sale had he either known what he was doing, or by trusting the realtor. I guess the point is, dont get bogged down by this $100 or that $500 or this .5%. Take the offer, move things along and get your 98% or 99% cash out and simplify your life. If the buyer becomes a problem, lose them and get another one.

Realtor fees...a disappointing miasma. By the way, in all five states i've lived in, you had a buyers agent and a listing agent/sellers agent. Buyers agent takes the buyer around, sellers agent 'owns' the listing. Unless you have a "true" independent buyers agent that they buyer actually pays out of their own pocket - - and i've never, ever actually seen one of these - - both represent the seller as the seller is paying both of them. I've gotten away with getting realtors to sell a property for ~2%, and I'd try one of the 1.5% selling agents i've seen like help-u-sell. I have found though that offering less than 3% results in a lot of buyers agents not showing your property. A real tribute to the real estate profession. I've gotten away with a 2% sellers fee and 2.5% buyers fee...that half percent doesnt seem to turn them off that much.

As far as FSBO's, I dont see any reason as a buyer to buy one, havent, and probably wont. As a buyer, i'm not paying any of the fees. I would have to deal with what is usually an inexperienced, emotionally charged seller with no financial benefit to me, as most FSBO's dont sell for 5-6% off...the seller wants to pick up the realtors cost premium themselves. I dont want to wade through 20-30 FSBO's to find the one seller thats probably like most of the people on this board, intelligent, educated and not a dickhead (well, some of you might be dickheads... )

Plus at the end of the day, realtors do a half decent job of keeping sellers honest, as the realtor and their broker are both potential targets for a lawsuit if you discover problems with the home after the sale that the buyer should have been aware of and didnt disclose, or if anything is done improperly through the course of the sale.

All that having been said, I think the days of the 6% realtor based sale are coming to an end. It made great sense 20+ years ago when the selling agent had to do carbon paper mimeo's of the listing, glue real photographs to them, and drive around or call around to all the regional agents to let them know about the property. That took real selling skills and time. Buyers agents had to spend days scrounging up listings to show and spent hours every day on the phone.

With modern automation, a sellers agent job is an hour or two setting the price and sticking the thing in the MLS, although a buyers agents job can be a pain in the butt if they have a buyer that wants to look at 50-100 properties before they make a decision. In no case are either of them due 15-20K+ for a few hours of work...in my opinion anyhow.

Its going to be a tough system to get torn down though...way too many people drinking from this trough...

[Danny]

() - thanks for that post. I will take it and run if they don't change their minds and move out of state and find out what kinda of house they can get for that kinda of money.
I had approx. market evals done by 3 brokers 2 months ago - 350 - 400.
Chose this broker because it made my life easier - they are our prop mgrs and have the keys. I could envision a disaffected pm who would be not only reluctant to cooperate with another broker, not be motivated to schedule with the tenant and also would maybe lose some motivation to properly manage our apt. building next door. Also, thought 5% commis was a deal - here in MN. 7%!
I agree about not sweating the dollars - I've almost always left money at the table whether it is cars, houses, jobs...makes for good feelings and relations.
There will be a god awful amount of tax to pay and I will now enter into the feared AMT area...
I'm helping Arnold & California out with this deal -right now the prop tax is $225.00.
The new owner will pay about $5,000.
Ca. Income tax will be around $30,000.

[Nords]

Quote:

Originally Posted by DanTien Naw, I don't think I could justify that based on your recs* MOVI - thats in the gambling losses category... and I'm being charitable...

It doesn't matter what I recommend and you're right-- FIRECalc may be better deducted as a gambling loss. Read the tax code and make your own decision.

Hey, it's only a deduction when I get stopped out of it. I wish I could pick the low price of every stock that I buy but I'm patient with numbers like these. If you don't want the volatility then buy bonds or CDs...

[Danny]

Quote:

Originally Posted by Nords It doesn't matter what I recommend and you're right-- FIRECalc may be better deducted as a gambling loss. Read the tax code and make your own decision. Hey, it's only a deduction when I get stopped out of it. I wish I could pick the low price of every stock that I buy but I'm patient with numbers like these. If you don't want the volatility then buy bonds or CDs...

ah, man. What was it Don Rickles used to say - I only kid you because I love you..well I wouldn't say I love you, but I kinda like you and your posts.
By the way, who picks out your clothes? Stevie Wonder?

[malakito]

Quote:

Originally Posted by DanTien I didn't think about the extra $500 (5%)commision! I'll make a point of bringing it up. I should send you a check for $250 for that? I get the feeling that my realtor wants a fast deal. <snip> ......Thanks malakito!

You're welcome. If you're serious about the $250, PM me :P

I told you the realtor works for the sale, didn't I?

malakito.

[Dreamer]

I am so glad that we did not have to pay those housing prices!!! I don't know how any young couple could ever hope to buy a house there, unless the job salaries are substantially more.

Dreamer

[Danny]

Quote:

Originally Posted by malakito You're welcome. If you're serious about the $250, PM me :P I told you the realtor works for the sale, didn't I? malakito.

Malakito!
You are so right. I have found that when it comes to money people can get really self-centered and greedy. Have you also found that to be true?
I have an idea and bear with me on this, what about the two of us co-sponsoring one of Dory's servers - if he felt like it he could name it the Malakito-DanTien. How much could a server cost - can't be much right? How about us floating a $250 figure to him - he bites - then we counter and get him to agree to $200?
Again, Thanks very much for your help.

DanTien

[Danny]

Quote:

Originally Posted by Dreamer I am so glad that we did not have to pay those housing prices!!! I don't know how any young couple could ever hope to buy a house there, unless the job salaries are substantially more. Dreamer

Me too. I remember having to get the down payment together for my first house in 1985 in Walnut Creek, Ca. $131,000. We had saved for years and lived in a really crappy apt in a really crappy area for 7 years to be able to put down $51,000 because my wages (wife was stay at home mommy) were barely enough to justify the 80,000 mortgage at 12.75%. Now, these folks bless em are putting down 20,000 and taking out 30 year mortgage for 395k.

[Danny]

I hope it wasn't anything I said that made Malakito leave. This was his last exchange before he said adeau. Maybe I should give him a call or send him $250 and ask him to come back.

Quote:

Originally Posted by malakito You're welcome. If you're serious about the $250, PM me :P I told you the realtor works for the sale, didn't I? malakito.

Quote:

Originally Posted by DanTien Malakito! You are so right. I have found that when it comes to money people can get really self-centered and greedy. Have you also found that to be true? I have an idea and bear with me on this, what about the two of us co-sponsoring one of Dory's servers - if he felt like it he could name it the Malakito-DanTien. How much could a server cost - can't be much right? How about us floating a $250 figure to him - he bites - then we counter and get him to agree to $200? Again, Thanks very much for your help. DanTien

[cute fuzzy bunny]

Quote:

Originally Posted by Dreamer I am so glad that we did not have to pay those housing prices!!! I don't know how any young couple could ever hope to buy a house there, unless the job salaries are substantially more.

Theres one upside to paying those prices, is selling a few years later at an even higher price.

I've made 250k in home appreciation over the last 10 years, and my current house is worth 150k more than I paid for it two years ago.

Not too shabby. Hard to repeat though.

[Patrick]

Quote:

Originally Posted by DanTien I have just received an offer for a house we're selling in Glendale, Ca. Looks good, but not sure about some things. Appreciate any help from more experienced sellers. Was listed less than a week ago - wondering if should let some other offers come in. Also, it is tenant occupied and the buyers haven't even had a look around yet. The buyers have given my broker a letter from the mortgage outfit saying they are qualified for a 1st(80%) and a 2nd(20%) that would be more than the actual selling price. They are financing 95% of the purchase. They are offering $10,000 more than list, but they want $10,000 credit from us at closing. The offer sheet has the following fees and cost responsibility - pretty much standard?: Seller will pay for: Wood destroying Pest inspection Septic or private sewage system inspection Natural hazard zone disclosure report Smoke detector installation and/or water heater bracing Compliance with any other minimum mandatory gov't retrofit standards, inspections and reports. Buyer and seller will pay for their own escrow fee Seller shall pay for owner's title insurance policy Seller shall pay county, city HOA transfer tax or fee Seller shall pay home warranty plan not to exceed $450 Thank you DanTien

Dan,

I'm not sure where you're at with the deal, but here are a few recommendations:

Put in the contract that the buyer will pay for the inspections up front and you will reimburse at the close.* That way if they back out of the deal, you haven't lost money on that and they are more likely to continue with the deal since they have cash invested.* *

Give them a time limit to approve the inspections.* After the time is up, if they haven't notified you, they're stuck with the deal.

Set a limit on how much you'll pay for repairs.* That way you're not stuck if the inspector says you need $50,000 in foundation repairs due to termites, for example.

Since the offer is above the asking price, include language in the contract about what happens if the property doesn't appraise.* Will the price be lowered, the buyers come out-of-pocket for the balance, you split the difference 50/50, or go back to negotiations?

Good luck,

Patrick

[Danny]

Patrick - those are good points.
I'm trying to figure how much of a cap on any repairs. That can be used in a counter later in the process after the inspections right guys?
Thats an interesting approach on making them pay inspections - a concern is I will discourage them from the deal - they seem cash poor and plus we are thinking we could leave money at the table and still be happy cashing out. If they back out, the reports would still be in our hands for the next prospect.

Status right now: Mn Attorney is checking with Ca. attorney about whether to agree to arbitration clause in the offer. Buyers were supposed to soon get a look around.

Thank you
DanTien

[Patrick]

Quote:

Originally Posted by DanTien Patrick - those are good points. I'm trying to figure how much of a cap on any repairs. That can be used in a counter later in the process after the inspections right guys? Thats an interesting approach on making them pay inspections - a concern is I will discourage them from the deal - they seem cash poor and plus we are thinking we could leave money at the table and still be happy cashing out. If they back out, the reports would still be in our hands for the next prospect. Status right now: Mn Attorney is checking with Ca. attorney about whether to agree to arbitration clause in the offer. Buyers were supposed to soon get a look around. * Thank you DanTien*

Well, here it's standard practice for the buyer to pay for any inspections they want and the offer is "subject to" the inspections, meaning that the buyer can back out if something is discovered about the property that they don't like. Also, we counteroffer and sign the contract before the inspections are done. That way you (or the buyer) are not paying for inspections if you don't have a deal. We always specify the limit on repairs up front, before the contract is signed. I'm not familiar with the laws in your state, but I doubt you can go back and change the contract after the inspections are done. I try to stick to $500 for repairs.

[tryan]

Quote:

They are offering $10,000 more than list, but they want $10,000 credit from us at closing.

Dan,

Just a heads up .... the last deal I did was just like this (10k back) and the sub-prime lender could only dream up ~7k worth of closing costs.*

This left ~3k in never-land ... lender/lawyer credited it to me because the buyer is not allowed "cash-back".* Almost screwed the deal as the buyer was unhappy paying 3k more for the house.* I refused to cut a check to the buyer because taxes and realtor fees were paid - by me - on the $$ regardless of who got it (just look at the HUD).

The lesson learned was to put to words "UP TO 10K credited for closing costs"* in the P&S;* this way there is no dispute about where the extra $$ goes (to you).*

Yes, capitol gains and realtors fees are paid on the extra.* Realtors love this stuff.

Have a good laugh all the way to the bank!