Please, stop the drama class with the "if the boss called you into the office and said" routine .. isn't that off some cheap 1952 movie script..?
$2,800 or $230 a month...? .l.o.l.. she's taking a $119,000 hit off the sale price - and a $30,000 plug for the negative equity she's about to incur ...
If she would have gotten the proper advice from her "professional realtor" she wouldn't be in this spot ... ever think about that minor little issue.?
Besides all that nonsense, nobody in Florida is getting a 6% commish .. in her area 2 and 3% is common, and most agents are rolling towards flat fee's ...
It's a straight juice business .. her agent could argue about the $16,800 (that nobody is seeing in that market) .. or .. grab the $8600 and call it a wonderful day in the neighborhood.
Like my great grand Daddy likes to say .. "you can be a lion and you can be a tiger .. but never be a pig.."
If the buyer hasn't gone away yet, please contact this agent's managing broker and ask her to assign new representation to the buyers. In fact, based on your agent's, thus far, less than stellar performance regarding negotiations, you might ask her to reassign a new agent for YOU, too! See if you can resurrect that deal.
Your current agent is privy to too much inside information, for her to not "telegraph" that to the buyers. (such as... they've already closed on their home in NC.. I'm sure they'll be very negotiable" "they're paying double mortgage payments... they'll consider ANY offer")... this is, of course, highly unethical, but it does happen when agents get greedy.
Talk to a FINANCIAL PLANNER, WORK OUT THE NUMBERS. The numbers dont lie. DONT TAKE THE OFFER. Find a new agent. Fire your current agent. YOU SHOULD NEVER HAVE THE SAME AGENT REPRESENTING YOU AND THE BUYER, NEVER.
you have two choices here, you can ignore my advice and suffer the consequences later or you can heed it talk to a financial planner and then fire the agent. Remember people already saw your house and made an offer.
I have had this situation come up in my own listings several times, and in each case, 1% is exactly what I was willing to credit to my sellers. Think about the math for a minute. If you were to accept the current offer, she is willing to reduce your bill by $2,800. If your boss called you into the office and said that due to falling corporate profits the company wanted you to take a pay cut of $230 a month for the next year, how would you feel? Now think about the work involved - your agent will not have the assistance of a buyers agent following up on that side of the transaction. She will have to stay on top of the lender, the appraiser, and maybe an additional attorney. If your boss said that not only did you have to take a pay cut, but your assistant was being laid off and you would expected to do that work as well, how would you be feeling?
This buyer may not be the right fit for your situation, but your agent -in my humble opinion - is giving you a fair deal. There are agents I know who would not be so generous. Best wishes on your sale, Stacey
You keep using the word "representing". Transaction brokerage is a limited form of representation with no fiduciary duties towards either seller or buyer. This is clearly defined by law and spelled out in 7 points in the Transaction Broker Notice every buyer is asked to sign before setting foot into the first home for sale.
I know of some agents that will turn down buyers because they're scared they're doing something wrong having both sides of a transaction. The law is very clear about transaction brokerage - it's a no-brainer.
I don't know about you but I have no problem AT ALL to serve my sellers and buyers objectively. Dealing fairly and honestly is what is expected from me. Where is your problem with that?
HomeBuyer Myke, dual agency is illegal in Florida. I would ask to please not use those terms interchangably.
The house in Florida was purchased in 2006 for 399,000 - we realize now we overpaid, but that's what the going prices were at the time. The seller was asking for more than that.
The house in FL has been listed about 4 months and is listed at 329,000. We also have it listed as a rental.
We are moving to NC for a couple of reasons. First, I have been very sick since moving to FL with severe allergies making life unbearable here. The 2nd reason is that my husband has a job opportunity in NC.
We bought the house in NC because it was the perfect house for us and under-priced. We paid the price that it was listed at and it was still a lot less than what we thought we would be paying. Our thinking was, if it doesn't work out and we can't sell the house in FL, we can put the NC house back on the market.
The only reason we were considering short sale on the FL house as an option is because the offer we received was less than what we owe on the mortgage. I didn't know anything about it and realize it is not really meant for people in our situation.
What I really need cleared up is how the realtor commision works, buyer's agent/seller agent. If the buyer happens to be someone that contacted my agent directly than there is not a separate buyer's agent. So my thinking was, that means we only have to pay 3%. I guess I am wrong on that. I just don't get it.
The offer we received for 280,000 is totally dead now. The buyer told my agent it was a one time offer take it or not. My realtor said she thought the buyer was going to make a better offer than what she did. Also said that she feels we are priced right for the market and should wait for someone else. The house is in a good neighborhood, has a pool, fenced yard, good schools does not need any work. It's a nice house.
When I asked my realtor about re-negotiating the commision fees she said this was an isolated situation with this buyer. She expects that we will get an offer that will allow us to break even.
I realize nobody knows what's going to happen with the market. It's not her fault we are in this situation. We chose to do this the way we did. I get that. I just want to make sure we have all the facts on what can and cannot be done. I really appreciate all of the feedback.
My gut reaction--not knowing what the comps are, how long your property has been on the market, your financial condition, etc.--is: Cut your losses. In retrospect, you overpaid for the Deerfield Beach property, and you've compounded that error by buying in North Carolina before selling the Florida property. We all mess up.
Now for a mini-lecture: If you have the credit to buy another property in North Carolina while still living in Florida...if you have the resources to pay the $30,000 on the sale...then you have no business considering a short sale. Don't ask the lender to pay for your miscalulations. And why should the lender let you off the hook? What sort of hardship letter would you be able to present to the lender? Nothing persuasive. Besides, do you really want to mess your credit up for the next 7-10 years?
Finally, have you considered renting out the Florida property? Even if you have a $800 a month negative cash flow (which would be very painful, admittedly), you could go for 3 years before you'd be out-of-pocket as much as selling now. By then, maybe, market conditions will have improved.
Or, if the comps suggest your property really, truly, honestly is worth $320,000-$330,000 or more, then you might keep it on the market for a bit longer.
Again, though, check with a financial planner in any case.
Dual agency contracts never get explained properly or accurately to consumers, probably on purpose ..
so, most consumers think they're getting a better service and saving money in the meantime going that route .. .. actually, it's more like having Lizzie Bordon as a baby sitter ..
When I say this, I am not trying to be mean, but honest.
When you purchased your next home without selling your previous home, I am sure that you considered that this might happen. In business (any business), we call this an "opportunity cost". It is not the fault of the Realtor, who is doing her job, that the offer came in low and the buyer won't negotiate.
The Realtor has a legal responsibility to both sides in this situation, and I don't think that she is being unreasonable. By taking a 15% discount she is doing more than many realtors would. How much should she discount? 50%?
If your employer came to you and requested that you relinquish 15%-50% of your income, would you be good with that?
I do truly understand where you are at, and I hope things work out. Your Realtor is just the messenger here. Don't shoot the messenger. She did bring you an offer, after all. Maybe she busted her backside just to get them to offer!!!!!
Also, you can always reject the offer.
If you signed an agreement with the Agent, read it and see what it says about "dual agency". Some Brokers frown upon that and will see to it that it isn't in the agreement.
Also, in this day and age, your Mortgage Lender may allow you to do a "short sale" if they think it is in their best interest. Let them at least review it for you.
Strategically, since you have already closed on your new purchase; if the old lender is unwilling to do a "short sale", just explain to them that they will end up with the house. There is no reason to drag your family down the "rat hole" making payments that will only maintain the obviously untenable "status quo" of two mortgages. Yeah, it's a tough choice, but don't succumb to the thought that you can make up $30,000. There is no way to make up a $30,000 deficit, especially since they add interest to that. . The Lender will work with you. They are in this to make money, not own real estate. Your credit may get "dinged" but after 24 months of paying your new mortgage on time, you shouldn't have a problem getting future financing.
Call you lender and discuss it with them, if they don't work with you, give them the house keys and don't look back.(Oh, and by the way, next time don't buy a house until you've sold the old one!!!!)
I remember your other posting ..
I'm sure your realtor will take 3% .. some pie is better than no pie at all.
I'm not getting a warm and fuzzy feeling about your agent here .. so my my question is, how do you know the potential buyer won't negotiate..? .. have you spoke with them personally.?
It sounds like from your response there that you're not much paying attention to what this woman is talking about. If in fact her agent is a "transaction broker" and is simply pushing papers and answering the phone... then why is this transaction broker giving her advice about "the next move" as you put it?
If you look closely - i got the distinct impression that's exactly what her agent was doing when she said that the offer wasn't good enough, and they're better off passing on it and holding out for something better.
Sounds like a little much for the paper pusher you described....
As for "cheaper and faster" without a lawyer - and only using agents... I don't know about that. Of all the people I know who've bought a house in the last bunch of years, the vast majority did it with thier own minds, and a decent lawyer. Most closed very quickly - one in something like 15 days. Guess it all depends on the situation.
Jackie - I have one very simple piece of advice for you, that will never ever let you down, in any situation.
If you do not feel comfortable with something - address it with the person. (in this case your agent).
If they do not remedy the situation in such a way that is satisfactory to you - start going higher up the food chain. Everybody answers to somebody - so get that somebody on the phone, and address the situation with them.
If you're not comfortable with Dual Agency - tell your agent you're not comfortable with that. If she starts comin down on you over it - call her boss, and tell him/her what's going on.
It's great that you're here looking for advice - but there's a lot of people telling you that you should feel lucky your agent even offered you 1% off, and gettin all offended that you don't think that's fair. Don't let anybody tell you what YOU think is fair, or what you think you're comfortable with.
Also - if i can throw my 2cents in on what the future holds - I give it about 10-15 days before your first mortgage payment on your house in NC - and all of the sudden that buyer that left 280 on the table will come back and throw 280 out there again, or MAYBE up it to 290, but ask for some sort of concession.
Never buy home until the one you have has sold. NEVER.
You put your self in the worse position a seller can be in.
You have nothing to fall back on.
The realtor has brought you a buyer in this market?
What have other homes been selling for in your area?
I would venture to say homes pending contract and homes closed are few and far between in your area.
Your next worry should be will the home appraise for the purchase price?
Where are you getting the $30k from?
You definetly do not qualify for a short sale situation.
Did you use a realtor to purchase your new home?
That realtor should have stopped you dead in your tracks and asked you some very tough questions.
Seems like renting in NC would have made more sense.
To sum it up.
Take the offer and move on.
Sorry but sometimes you gotta do what you gotta due.
Calm down!! This is a web site that buyers and sellers come to ask real estate questions, and have them answered. Jackie answered a simple question, and many of the agents below has taken the time to voice their opinions. You on the other hand seem to make it a point to bash every realtor you come across in these forums even from your past postings. It seems as though you have had a bad past experience with a realtor, and you are having a hard time getting over that.
This will be my last post for this article, even though I understand Snor will still have to reply to get his/her last word in!! That's just his/her way to vent!!
Jackie, I hope that we have helped you understand the commission situation a little better, and truly wish you the best of luck when it comes to selling your home.
2nd Grader ;)
Having a Agent represent you and buyer is the same as having a Attorney represent you in court and he also works as the prosecutor. His abilities to put your interest first will be clouded, not because he or she is a bad person but merely because he or she gets paid either way. Isnt your agent suppose to be working for you??? Isnt that what all you realtors say?
Can you honestly say that you represent both buyers and sellers in the same transaction? Who are you fooling.
Jackie, my grandmother always tells me, a fisherman never says his fish is smelly. With that said, asking a question of this nature, in this forum where people's job depend on sellling homes is like asking oil and gas companies to invest in green technology.
Wake up and smell the coffee, get an objective opinion, talk to an attorney, for $150.00 you will get the best advice money can buy. Pun intended.
I can wait to finish my realtor rating website, where the public gets to rate and review your performances.
Couple of things,
If you remotely care about your credit dont do a short sale.
re-read your contract with the current agent, am sure there is a "cooling off" period. about 30days. FIRE THE AGENT ASAP. Its impossible for her to be objective, since she is trying to represent both of you, where is her morales..
Drop the price and offer some incentives for a quick sale, plus also list to for rental. I know its tough right now but the market is rough and you made a dumb mistake.
This industry really needs someone to straighten it out. I am very serious, i am going to start programming a realtor rating website. People like this needs to be exposed so that others are aware of them.
@ Stacey, cut the crap about boss asking her to take a pay cut, it is not the same. A rather preposterous analogy if you ask me.
The listing agreement may discuss how much they are offering to other offices if they bring a buyer - but that is a separate agreement between the broker and cooperating broker. Your agreement for the 6% fee is between you and the listing broker no matter what they offer others - and you are still liable for the commission agreed to in the listing even if they are only offering a 1% payment.
Your Broker on both sides-
Some agreements have a provision for a reduced commission if your broker, or your agent, represents both parties. If your contract doesn't talk about it then they are not required to drop their rates - they were being very nice to offer to do so! If the agent didn't get their broker's approval the discount may have come completely out of their pocket - which would be much more than a 1% drop in their income from the deal.
Just so you know - most of the work and liability for a buyer's agent happens AFTER a contract is signed. I'd say 2/3 of my time is taken up by inspections and correspondence to get a buyer to closing. I don't reduce my fees when representing both sides for this reason, but some agents do.
I don't know all the details, the previous posts have some good points.
You don't say how long your home was on the market.
You are closing on your new home, which means you are a "have to" seller, not a good negotiating position to be in, as you now see.
Without going back and trying to correct the past, let's look at what you have:
Two mortgage payments. Whatever the difference is, you do the math. Remember, the Realtor's job is to bring a buyer. What you owe, what you paid, how much you have invested into your present home, has nothing to do with the market value. The market drive the value.
I am assuming that your home has been on the market a while, you have set the price, the Realtor allowed you to do that, she may have asked for a reduction, but you were unwilling, now you have a low offer your don't like. Sounds like the market is talking and you are not listening.
The Realtor representing the buyers is a separate issue. Have the buyer work with another agent from that broker. But you need to sell, if you can resurrect this buyer, I would.
However, not knowing all the facts, the fact that your home is over-priced, or has lost value , is not the Realtor's fault. How she handled the matter is another issue that you could discuss with her broker, and probably should.
As one that really understands your position and can only add one question that only you have the answer for.
Why are you selling? If the answer of keeping the house is the lessor of the loss than tell that buyer to stick it.
If an the other hand the house has been sticking it to you and will continue to do so and your financial well being is further challenged, does it pay to hang in there? Do you have other options? Have you contacted " loss mitigators" or the lender for program that are offered? Difficult questions many sellers are asking I wish the answer would be simple . In your place I would always look at the alternatives and size them up.
As far as your offer $30,000 below, it would be cliche to say "if the buyer really wants the home then they will work with you." The truth of the matter is buyers know the market has shifted and the are playing hardball since there is so much inventory. You are the only person who knows if you can live with the offer. I've heard stories about people who turned away the ONLY offer received on their home and the house is STILL on the market.
How long has our home been on the market? How many showings per week are you getting? NAR data tells us that if your home is priced right you should be getting at least 3 showings a week and on average you should receive an offer every 10 showings. If you're seeing activity such as this then, maybe you could wait it out, but when that 2nd mortgage payment starts coming in you will really have to re-evaluate.
Hope I was of some help--Good luck.
and you right again, i am not a realtor, so what? does that make me less qualified to notice when something is not right.
I wanted to try to clear things up for you a little bit about commissions. First off, EACH agent is different in the way they do business, and the way they charge their fees. I always put a condition in my listing agreements that say the following:
"If a member of The Shumaker Group is also the selling agent, then the total commissions to be paid will be 4% of the total sales price."
The reason I do this is because I personally feel that if I bring the buyer to purchase your home, I can then have full control, and know exactly what is going on with both sides of the deal. However; many agents do not look at this scenario the same as I do... Many agents look at it as though the buyers could have been taken elsewhere, and the agent could have made 3% for representing them in another purchase. This is unfortunate, but it does happen. By no means am I degrading your agent... Your agent has done their job by bringing you a buyer, however you cannot blame the agent for what the buyers have offered. This is a very tough market that we are in, and many sellers believe that the agents should reduce their commissions to get the homes sold. Per your original agreement, it sounds as though it was in writting as a straight 6-7%.
The agent isn't the one to blame! Example: If you had hired someone to put floor tile down in your kitchen for $4000. It wouldn't be right to stop them halfway through the job to ask them to reduce that amount.
Keller Williams Realty South Shore
I love details.
On the offer: Based on how it was presented, it strikes me as a "I with offer a lowball price, see if they bite, and then try that trick again with the next people until I get a bite" I think you probably did ok letting that person go away.
On the commission: 2 thoughts...in addition to what I said already.
1. As a Realtor, I always think it is better for everybody involved to be represented by a different Realtor. That way there is full representation for both parties and no doubt that everybody is acting in the best interest of each side. However, you will end up paying the full commission.
2. In a dual agency situation, the benefit is that your Realtor MIGHT give you a discount. The downside is what happened to you. You feel like things should be different, commission etc.
I am sure that things will work out eventually for you. Just keep your chin up!
A short sale may be a difficult case to prove for you since you have already purchased another home.
You can get of your contract with the brokerage, but you will need to read your listing agreement to see if you have a cancellation charge. If not, there is probably language in there that you will be charged any fees that the agent has already incurred in marketing your home. I think her 1% concession is fair.
But how will that will help you? You still have a home to sell. If you intend to pursue this same buyer she has brought to the table, you will probably still be liable to pay the brokerage fee.