Home Selling in 22655>Question Details

Hootch, Home Buyer in Stephens City, VA

For sale by owner once current contract ends. Any suggestions?

Asked by Hootch, Stephens City, VA Sat Apr 24, 2010

I currently have my home on the market with a reality company. My contract expires in about a month. It is a 6 month contract. I am close on price, but in this market everyone seems to be looking for the "next" deal. Once the contract expires, if I wanted to do a for sale by owner to lose the approximately $13k in commission; can I legally do this? I was reading in my Exclusive Authorization To Sell contract a stipulation about a 90 day window after contract expires I could still owe the broker 6% commission. Is this common verbiage? If this is a case how do people switch brokers? Thanks for any help...

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12
WOW! Thanks everyone for the great advice and suggestions. Everything is duly noted and will be researched. I have at a lot of showings and a couple of offers, but they were lower and I didn't want to come out of pocket of about 12K. I am fortunate I don't have to sell my house, but am looking to upgrade. That is why the FSBO looked attractive. Anyway, thanks everyone again for all the help!
0 votes Thank Flag Link Tue Apr 27, 2010
One quick clarification: You can certainly go FSBO and be unrepresented by an agent. The only circumstances that would cause you to pay your agent a commission would be if someone that agent showed the house to made an offer to purchase AND THE AGENT COULD PROVE THAT THE BUYER WAS INTRODUCED TO THE HOUSE BY HIS or HER EFFORTS. This is usually done by the agent producing an agency interest form signed by the buyer making the offer--a form that agents are required to show to any unpresented potential buyer (a buyer not working with an agent). NO courts would award commission payments to an agent who could not prove that they were the "procuring cause" of the sale. In Virginia, if it's not in writing, it's unenforcible by the statute of frauds.
0 votes Thank Flag Link Tue Apr 27, 2010
Hootch - Have a R.E. attorney take a look at your contract to let you know your legal options and the consequences associated with possible scenarios regarding purchase offers after the listing has expired.

If you choose to go FSBO, be sure to read Rockinblu's Blog. Knowledge is power!
Good Luck!
Web Reference: http://www.321advantage.com
0 votes Thank Flag Link Tue Apr 27, 2010
Hootch
I have a couple of suggestions:

Look at the link below. From just that information your market appears to be pretty normal. You do show quite a few foreclosures....

Value is determined by the buyers. If a property is not being shown by Realtors, we are not all on vacation. We are showing others properties that we DO think are priced right and hope that our buyers will like. So no Realtor showings is the first negative sign.

Second negative sign is no offers. On average 10-12 showings will result in an offer. If you have more showings and no offers, the price is too high.

The third negative is market time. The longer a property is on the market, the greater the gap between list price and sale price.

Where to you fit in this?

How did you select the price? Based on how much you need to net, I'll bet.

Before your listing expires, ask your Realtor for this information:

Since your property hit the market, how many homes have:
Sold
Entered escrow
Had Accepted offers
Reduced their price
Come on to the market.

In five months I'll bet quite a few homes have sold. So why did they sell, and yours did not? Did your Realtor ask you for a price reduction? Did you refuse?

Chances are your property is over-priced. Then you need to think about why you are selling? What is your motivation? What are your options? Stay, do not move, rent it out, all kinds of options.

The thing to remember is this. After four months on the market, the entire Realtor community KNOWS exactly for what price your property did not sell. It is a permanent part of the property online history.

So do your homework. Know also, BTW, that you are missing spring market. In most areas, that market runs until the end of April. People putting their properties on the market now are late and will pay for it with lower prices.

The most buyers are out their RIGHT NOW. They need to be in escrow by April 30th to qualify for the $8,000 Federal tax credit.

Good luck.
0 votes Thank Flag Link Mon Apr 26, 2010
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Hootch,

Some states have language in the agreement where the agent upon the end of the listing period must provide the seller a list of those buyers that are protected, which includes family members of those that are on that list as well. However, I don't think the Virginia standard "Exclusive Right to Sell" contract has that stipulation, but it doesn't mean that you couldn't ask for one. Good luck in getting it though. As previously stated there is a provision in the VA agreement that after the expiration of the agreement that the protection period ceases with the seller listing with another Realtor. If you do sell as a FSBO to someone during the protection period, and you're unable to document that the buyer was found solely through your efforts, or least none of the agent's, things could get a little dicey without the release that Mack mentioned.

If you do go the FSBO route, you might find the blog attached to the link below of some interest. Good luck.

http://www.trulia.com/blog/rockinblu/2008/08/thinking_about_…
0 votes Thank Flag Link Sun Apr 25, 2010
Dave, that isn't the case in the Pacific Northwest.

Hootch would absolutely owe a commission going FSBO, unless they had been released by the Broker, for the reasons you stated and because of the impossibility to accurately record all of the people whose attention was brought to the listing by the broker's actions.
0 votes Thank Flag Link Sat Apr 24, 2010
You are free to relist your home with another agent or sell your home on your own when the contract expires. The part you are talking about refers to a section that all states have in their agreements. it protects the rRaltor from home sellers and buyers trying to save a few dollars.

For example, I go an look at your house. I want to purchase your home. Instead of dealing with the Realtors and paying the $13,000 (your number)in commission; I ask you to save me an additional $6,000 or $7000 off the price when the listing expires and I will buy it directly from you.

Your Realotor would have been the casue for the sale and thier marketing and time woudl have procured a buyer for you. This prevents situations like this from happening.

However; if your listing expires and you put a for sale by owner sign up and soemone drives by and makes you an offer within the 90 days that has NOT looked at the house before you are under no obligation to pay the commssion.

I hope this helps.

Dave diCecco
http://www.davedicecco.com
0 votes Thank Flag Link Sat Apr 24, 2010
In the State of Wisconsin this protected buyer period does not change from broker to broker. It is in the contract drafted by the state. And to help you as the seller understand why................years ago it was not uncommon for a seller to list their home with an agent; the agent did all the work; spent hard earned money to market that property; brought in the potential buyers. Then the buyer would try to do a backroom deal, if you will, with the seller. The seller would say, my contract is almost up and buyer would say, great let me know when and I'll come back.

The bottom line is, there is a very good chance that without your agent's marketing, you may not have ever been contacted by those previous buyers. Therefore, someone finally came up with the idea that when you have a home listed or when you are a buyer's agent and you show a home, you now have the right to submit those names to protect them as your clients or customers. In our state it falls under procuring cause.

Some of the previous comments are correct however. If your contract is over and you put the home on the market and attract a buyer who has not previously come to see your property, in our state, you would be free to go forward.

Hope that helps.
Linda
Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Sat Apr 24, 2010
You are free to list with another agent or go by owner once your listing agreement ends.

What you are referring to is if someone comes back who saw the house while your agent had the listing and decided to purchase it within 90 days after your agreement ended. The listing agent may be entitled to a commission. This is in most marketing agreements; look for some type of verbage to that affect in your agreement.
0 votes Thank Flag Link Sat Apr 24, 2010
If you switch to another broker, it voids the previous contract. Regarding the 90-day window, that pertains to anybody shown the property during your listing period who wishes to return and purchase it after the listing agreement expires. So if a buyer viewed your house after it was listed but before your contract expired and then came back between within 90 days of the expiration date, you would be liable for the 6% to your previous agent.

There may be buyers who are represented by Realtors that may wish to purchase your home. If you offer the Buyer Agents a commission of 2-3% it could help you get your home sold.
0 votes Thank Flag Link Sat Apr 24, 2010
Language like that is pretty common. But usually it only applies to someone who viewed your home while it was listed with the previous listing agent. If you go out and find someone on your own--someone who hadn't seen your home or been aware of it due to the efforts of the previous listing agent--you usually are OK. Read that language closely to make sure.

When people switch agents, that language doesn't apply. The new listing agent is entitled to a commission from a sale from Day 1 of the new listing. The language you're concerned about only applies if a new agent doesn't come into the picture.

One other suggestion: Don't do a 6 month listing. Before I became a Realtor, my wife and I insisted on 3 month listings. We told the Realtors: "If we're satisfied with the job you're doing, we'll be glad to extend the listing." And, in some cases, that's what happened. If you find that you've ended up with an agent who really isn't doing the job the way it should be done, you don't want to be locked in for 6 months. Sure, if the agent (and agent's broker) agree, the listing agreement can be terminated earlier. But why hassle that? Try to limit it to a 3 month listing agreement.

Hope that helps.
0 votes Thank Flag Link Sat Apr 24, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
It's a legal question your asking and needs to be answered by an Attorney. Thats the best advice i can give. I know it doesn't answer your question but you need that contract interpreted properly.
0 votes Thank Flag Link Sat Apr 24, 2010
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