Received an offer on our house in Deerfield from a real estate agent. The offer included many

Asked by Jackie, 33442 Thu Apr 3, 2008

stipulations:

Offer price 285,000
Buyer will waive his 3% fee (since he is also an agent)
We pay for the title insurance policy (around $2,000)
We pay 5% of the purchase price towards buyer's closing costs ($14,250)

So to me the bottom line offer - once you get past the stipulations, is $269,000. Why wouldn't the agent just say that to begin with rather than complicate the situation? How does it benefit the agent to present the offer this way?

What would you recommend as a counter offer to something like this?

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Answers

12
Alan May, Agent, Evanston, IL
Fri Apr 4, 2008
Buyer will waive his 3% (this is actually a credit to the seller!)
Seller pays for title insurance (some areas, this is common...but put a cap on this... NOT TO EXCEED $2,000)
Seller pays 5% of purchase price toward buyer's closing costs (you should read this strictly as a discount!... if the buyer is getting a mortgage, his lender will likely not allow 5%... that's an excessive amount, and lenders aren't usually comfortable with the buyer receiving 5% from the seller... unless there are unusual circumstances, the lender's normal cut-off is 3%... so I suppose you could say "seller will pay UP TO 5% toward buyer's closing costs... NOT TO EXCEED AMOUNT THAT LENDER WILL ALLOW".)

The advantage, for the buyer is that his "purchase price" or amount of his loan is significantly reduced, and he comes to the closing table with far less cash. If you do agree to this, I would strongly suggest that you have both sides agree, in writing, that the bottom line of $269,000 is the only amount "commissionable".

(btw... I, too, am dubious about June's... 80% of all litigation... claim)
1 vote
gabriel palo…, Agent, Pompano Beach, FL
Wed Oct 20, 2010
Negotiations is an art. Some prefer a complicated design. Some stick to finger painting abstracts.
Than we run into critics.
It all boils down to do we like it or not?
You seem to be a meat and potato gall Jackie. So simply answer the question is it yes or no?
I am not an artist. I do love meat and potatoes and the people that think that way.

I think Jackie you already have the answer so why are you hesitating ...... your gut is right go with it.

Good Luck,
Gabe
Goulash is just an other name for a simple but wonderful Hungarian Peasant Delicacy I was raised on it.
0 votes
Snor, Both Buyer And Seller, Brooklyn, NY
Sat Jun 7, 2008
Jackie, seems like you are about to be got, you are trying to be penny wise and pound foolish. Why do you refuse to talk to a real estate attorney?

1. The buyer is not waiving anything. (the 3% he or she included in the 5% towards buyers closing cost), which I am assuming had she not been an agent, you would only negotiate 2% of your listing price?

2. I think someone mentioned this, but lenders are very strict rule regarding how much a seller can contribute to closing.

3. $269, 000 not sure this is correct, what about taxes to date, insurance (assuming you have those escrowed)

4. Why would the agent just say what???, its not the buyers agent job to calculate your bottom line #, its yours so stop being a baby.

Anyway you are on the right path to be got. Keep it up and your next post maybe, "I got got by the agent". Pay the 300 bucks and talk to a real estate attorney, or be got.
0 votes
Sylvia Barry,…, Agent, Marin, CA
Fri Apr 4, 2008
Hi Jackie:

I have read your other posts, but not everybody's replies.

First, you have to decide what your bottom line is. Will you accept $269K ad the bottom line offer, or do you need it to be $279K or $300k?

Then I would go back and counter the offering price so the net price will match your bottomline price;

This means if you want a bottom line price of $300,00-; you need to coutnerr back to $308,000 offering price. (waive 3% fee ($9,000), pay $2,000 title insurance, and then credit buyer 5% - $15,000 back for closing cost).

Make sure hte 3% fee waiver is acceptable by your listing agent because your listing agreement is signed with the listing agent and the listing agent split the commission with the bueyr agent, you don't want to pay listing agent the full commission and accept this deal to creidt the byers back 5%.

I will keep the structure the same because when the buyers ask for this kind of arrangement, might mean they either don't want or don't have a lot of cash for expenses/fees/payments (closing costs) up front when they make a purchase. This is one way to help the buyer purchase the property.

He needs that (the coditions/credit backs) in writing to be present to the lenders - truth in borrowing.

Sylvia
0 votes
Tman, , 30642
Fri Apr 4, 2008
June,

I'm sorry, I wasn't clear ... not NAR stats, bona fide stats .. court records, etc.

You know, I know, Inman knows and of course the FTC knows the NAR stats are not credible.

http://www.inman.com/news/2008/03/21/mlsi-settlement-with-ft…

But let us know ...


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0 votes
June Lizotte,…, , Portland, OR
Fri Apr 4, 2008
TMAN- I am referring to some stats I received quite a while back from a Principal Broker who referred to NAR statistics . I've put a call in to my NAR rep and am requesting stats from the archives. It might take a while to get the data, but as soon as I hear back from her I'll post it. In the mean time you can certainly find mega amounts of web commentary that will discuss the high risk of unrepresented sellers (for litigation) due to their lackof knowledge in areas such as REQUIRED disclosures such as lead based paint disclosure, seller's property disclosure statement, siding/stucco/EIFS disclosure, failure to meet contract deadlines, failure to provide documentation for verbal agreement, etc, etc. Have a great weekend.
Web Reference:  http://www.junelizotte.com
0 votes
Tman, , 30642
Fri Apr 4, 2008
June,


**..Are you aware that 80% of all real estate litagation involves For Sale By Owner transactions?..**

Can you show us bona fide statistics on this ..?


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0 votes
Phil Fowler, Agent, Brandon, FL
Fri Apr 4, 2008
Jackie,

Ask your Reator or Real Estate Attorney to go over the contract for you. If you don't have either, get one. You don't know what else maybe in the contract that can easily be missed by an untrained eye.
Web Reference:  http://www.PhilFowler.com
0 votes
June Lizotte,…, , Portland, OR
Fri Apr 4, 2008
Oh oh Jackie, I am assuming you are unrepresented in this transaction and therefore at a disadvantage and rightly so. The reason you hire a Realtor is so you have your interests guarded. Realtors are highly trained to understand the ins and outs and are professionals at handling the hundreds of issues that arise in a transaction. It's not to late to get yourself some representation; let me know if you need a referral and I'll get someone within my network to help you. You should not be unrepresented as I think you are now finding out. One other piece of advice I'll give you is this. Everything should be in writing. Even conversations you have should be followed up with a confirming, clarifying email. Save every single one and request buyer respond in writing to everything...Every One Of Them. You really should use a Realtor(c) since you've proved by your questions you were not equipped to handle this on your own and now here you are seeking the Professionals for answers and you're just getting started with the issues. Are you aware that 80% of all real estate litagation involves For Sale By Owner transactions? Let me know if you'd like that referral....like yesterday! My web site link is below, reach me there and I'll get right on it. Tell the potential buyer you'll need more time to consider his offer-(in writing )and get his acknowledgement (sig) in writing. Dates are soooo important. Don't miss any deadlines and by all means don't let him miss any.
Web Reference:  http://www.junelizotte.com
0 votes
Ute Ferdig, Agent, Newcastle, CA
Thu Apr 3, 2008
Hi Jackie. Writing up the offer this way has the benefit that the buyer does not have to pay for the closing cost out of pocket. If the buyer were to just write up the offer with an offering price of $269,000, he'd have to have to have the money for the closing cost. Essentially, the closing costs are built into the purchase price in your scenario. As long as the house will appraise for $285,000 and the lender permits the 5% buyer credit, the only question is whether you are willing to settle for $269,000. Since you are asking about how to counter the offer, I am assuming you are not satisfied with the amount of the net proceeds. I would find out what's more important to the buyer. You could counter the price and the credit by adding a little bit to the price and deducting a little bit from the credit. You just have to be careful not to go too high with the price to make sure that the property will still appraise for the purchase price. Good luck.
0 votes
Ken Herrera…, Agent, Las Vegas, NV
Thu Apr 3, 2008
Hello Jackie,

I'm sorry you feel this offer and situation is complicated. Offers are pretty much always presented in this fashion. Most Realtors are familiar with this type of offer and it is very common to Real Estate be it a For Sale By Owner or not. If you are unclear about what is going on, please seek professional advise.

When you buy a car, things are no different, you do not actually pay the sticker price. You have to pay taxes, doc fees, registration....and the list goes on.

As Keith pointed out, without knowing your circumstances, a prudent person cannot judge what you should do at this point. You are asking for a recommendation for a counter offer and it is unclear as to whether you should take the money and run....

Good Luck,
Web Reference:  http://www.C21Infinity.com
0 votes
Keith Sorem, Agent, Glendale, CA
Thu Apr 3, 2008
Jackoe
Who is your listing agent? Sounds like you don't have one. That is too bad.
We cannot advise you, we do not know all the facts.
Without knowing the details I would not advise you one way or the other. I think you need aRealtor to represent YOUR interests. Right now, no one is.
0 votes
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