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Sub Escrow Fee All Locations : Nationwide Real Estate Advice

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Wed Nov 25, 2009
Courtney Cooper answered:
HI Mike - Sounds like you are getting a lot of solicitations for your property as a listing:) I personally don't call FSBOs, but I know a lot of agents who do.

To answer your question, though, yes, I do understand that 3% is 3% if I bring a buyer, and I think that is great that you know offering a full 3% SOC in a tricky market is giving you an edge.

Good luck getting it sold! I hope you don't get too many more agents calling you unless they have a buyer for you!
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0 votes 40 answers Share Flag
Thu Jul 31, 2008
Don Tepper answered:
Don't cut off your nose to spite your face. Offer her 3%.

You say, "All she would have done is show the house to this one person." Well, maybe she's shown a dozen of houses to her client. She's put in some effort at her end. And she's come to you with (possibly) a willing buyer. She didn't have to come to you; you're selling FSBO and apparently initially structured it so an agent wouldn't receive anything.

Even if "All she would have done is show the house to this one person," you're comparing that to "I would have taken and sent the pics." Sorry, but even that comparison favors the agent. Taking and e-mailing 20 pictures isn't a major hassle.

Finally, which would you rather have: 97% of something, or 100% of nothing?

Offer her the 3%. And if her clients do decide to buy the house, send her a small gift and a nice letter of reference.

Hope that helps.
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0 votes 29 answers Share Flag
Thu Jan 17, 2008
Alan May answered:
Yes, many of the larger firms (Coldwell Banker, Century 21, ERA) incorporate a "paperwork" fee or a "processing fee" ... usually $200 - $300.
0 votes 20 answers Share Flag
Tue Feb 1, 2011
Stacey A. Martin answered:
Hi Newjersey, I can't answer about New Jersey specifically, but I think I can help you with the concept overall.

When I represent only a Seller as a listing agent, that is where my loyalties lie. I can not divulge confidential information, tell lies, mess up the money... do anything that would hurt my seller - I must act in their best interests at all times. This of course includes negotiating the very best contract for them - highest possible price, great earnest money deposit, manageable deadlines, not giving away any appliances, etc.

When I work as a Buyers Agent - I am on the opposite side of that fence - I am fighting for the lowest price, lowest deposit, every appliance, the kitchen throw rug and the living room curtains - maybe even throw in the play set and the fireplace tools. I also have to be honest, keep my buyers info confidential, be careful with where I put that escrow check - etc.

As a dual agent, my hands are tied in negotiating. I must remain mute if asked for any guidance or advise during negotiations - and remember -- this means not just the initial offer, and contract, but also, any post inspection requests, if any issues come up in the closing. I still have to be honest and provide due diligence, but because I am helping both sides, I am not allowed to advise either side.

This arrangement is not usually in the best interests of either party, but there can be exceptions to that, which is why it is allowed. In both MA and CT where I practice, to be in this situation, I have to tell both parties in writing we are in this position, and then they have to agree in writing that they accept this position. The real advantage in this to the parties - especially if they are both experienced and don't need as much guidance in the negotiating phase - is that I can transfer communication very quickly - as opposed to the chain of communication which happens with agents on both sides.

In your specific situation, it sounds like you are new to this process and would benefit greatly from an agent on your side guiding you. It is fine - in my opinion, to use another agent at the same firm - but yes, I would encourage you to obtain your own agent. Hope that is helpful, Stacey
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0 votes 21 answers Share Flag
Sat Oct 15, 2016
Chuck Patterson answered:
Skipper,
As I understand recent developments, the short answer to your question is no. I have spoken with my state representative about this and I have written to my congressional representatives. Who knows what the future holds? As of right now, it seems it's just a matter of rebuilding your life and waiting.
I can only hope that those that are hurt in this mess will be allowed a little flexibility when they apply for a future mortgage, much like what happens with medical bills in many instnaces. There is no guarantee that will happen either. Most of the lenders I work with are of the opnion that two years with no additional credit problems and continued income/employment and they will likely be able to do something for my buyers. I really hope they're right.
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0 votes 26 answers Share Flag
Sat Apr 15, 2017
Lorie Gould answered:
You could call local real estate companies and ask for an agent that specializes in foreclosure. You could also do a GOOGLE search for foreclosure real estate agent in your area or simply put foreclosures in your area and many choices will pop up.

I am sure that a great agent here on Trulia in your area will respond that will give you another option.

Just remember that Foreclosures are not always the best deals!
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0 votes 16 answers Share Flag
Mon Nov 26, 2007
Sylvia Barry, MAS,CIPS,SRES answered:
Hi Barry:

You have to keep in mind that as a Realtor, we are trying to build long term relationship with our clients. My goal for all my clients are to get the best deal for them; which as sellers, will be the highest price I can get them; for buyers, the lowest price for the house they are interested in.

Let's just play with the numbers -

Using $800,000 as an example, and take a very simple 5% as total commission and 2.5% split between listing and buyer agents. If the house sells for the listing price, each side will get $20,000 (to be split between broker and realtor, etc). If the buyer makes an offer of $750K, the commission will be 418,750 on one side. This means for $50,000 price differences, the difference in commission is only $1,250; splitting between the brokerage and agent.

Now, can you see that I would never want to make $1,250 and not being able to save $50K for my buyer client? If they are happy with my service, I am expecting that they will come back to me and refer me to their friends and relatives. This is how i prefer to build my business!

It makes so much more sense for me to get the best deal for my clients; and this is not even talking about how satisfactory I feel when I can help my clients!

Sylvia
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0 votes 14 answers Share Flag
Mon Nov 19, 2007
Linette Carroll answered:
In my experience, If your home is in good shape their isn't much difference from a conventional loan. The big difference is that when the home is appraised they truly do inspect for any problems that could be dangerous to the new homeowner. For instance peeling lead paint, cracked foundations, electrical issues, etc. A loan will not be granted unless the issues are taken care of . It forces the seller to correct these issues before closing . ... more
0 votes 5 answers Share Flag
Sun Dec 23, 2007
Keith Sorem answered:
Joan
The costs of the sale typically vary from state to state, and from area to area. My market is Southern California. The costs are:
FINANCIAL CONSIDERATION
Total Consideration Sales Price Agreed

PAYOFF CHARGES - FIRST MORTGAGE
[Total Payoff $XXX,000.00]
Principal Balance

COMMISSION CHARGES
LISTING AGENT
SELLING AGENT

OTHER DEBITS/CREDITS
Estimate For Termite Report/Completion
Estimate for Home Warranty For vacant land...no warranty!
Estimate Natural Hazard Disclosure

TITLE/TAXES/RECORDING CHARGES
Owners Title Policy Fee to SELLERS CHOICE
Messenger Fee to SELLERS CHOICE
Sub Escrow Fee to SELLERS CHOICE
Documentary Transfer Tax

ESCROW CHARGES
Escrow Fee (Normally split 50/50)
Drawing Grant Deed
Notary Fee
Wire fee if any

Net Proceeds

TOTAL

If the purpose of your question is to compute your net profit, this is not the correct venue. Ask a Realtor to help you. You should not be under any obligation....IMHO
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0 votes 3 answers Share Flag
Mon Dec 13, 2010
#1 answered:
You should definitely sit down with the sales rep and discuss your options.

You contracted to buy the home at a certain price and now base prices have come down.

You are obviously paying more for the home than it is worth today but you have a contract with the builder. And prices could decline even more befor your home closes.

The builder does not automatically give you the benefit of the base price drop.

If you can not successfully renegotiate the price with the sales rep you will be faced with deciding whether you want to continue with the purchase at the higher price. The builder is not obligated to negotiate the ontract price with you at this point and if you decide not to buy the home, the builder may not return your deposit but you may determine the drop in the base price no longer makes it a good investment.

Good luck.
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0 votes 11 answers Share Flag
Sun Dec 6, 2015
Ute Ferdig answered:
can only speak for myself. I don't tell people that they should not use their own chosen lender, but I prefer if they use someone I know because then I know what to expect and I have more confidence that there will not be any problem on the financing side. I have had bad experience with lenders that were chosen by my clients because the loan agent did cooperate very well or was hard to reach. In the end, it's the client who suffers. This is not to say that a transaction can't go smooth with a loan agent chosen by the buyer, but we don't know that in advance. ... more
0 votes 55 answers Share Flag
Fri Aug 28, 2009
Keith Sorem answered:
Tim, are you referring to the Woodlands in Texas? Or the Verdugo Woodlands in Glendale, CA?

Your questions in general are exactly on track. Although not a Woodlands, TX agent (I'm in Glendale, CA) I would like to offer a few investing tips that might help you.

If you don't own any investment property (let's say only your own home), one option is to purchase a new home where you live (upsize or downsize). Your basis -taxwise is low and if you have owned the property for a few years, you know about its maintenance, issues, etc. Plus, being local, you could manage it yourself. I see quite a few pluses to owning a rental near your area.

Let's look at purchasing rental property (regardless of area). I first suggest doing research. "The Millionaire Real Estate Investor" is a very good book that would be helpful. There is also a website called millionairesystems dot com that has some very helpful (and free) downloads referred to in the books, such as cost analysis spreadsheets, things like that.

I will summarize a few basic principles:
1. You will want to purchase in an area that has good, long term potential. Buying in a market that is down now is usually a good long-term strategy.
2. The specific purchase goes from city, to area, to neighborhood, to block, to property. One rule of thumb is that you will regret more purchases that you have made, than purchases you have not made...you don't need to buy.
3. Buy at least 20% below market. You'll make money even if you need to sell it earlier than you thought.
4. I strongly recommend purchasing property you can manage. Paying a management company a 5% -10% fee to manage the property (plus have Q/A issues) is a dicey proposition.
4. Your question about current rents is right on. Also, look at future planned development. Is the area built out? What is the current inventory of SFRs?

5. Talk with a REALTOR in that area and get a handle on where the market is in the housing cycle. Every market is in a cycle.
6. Plan on long term. If you could purchase one home a year, buy leveraging the equity in those homes you should be able to create a nice retirement cash flow relatively easily...just know that markets go up and down.
6. Look at your personal tax picture. How will the properties' income and expense affect your tax base.

Lastly, your 20% down, cash flow question. I recommend running prospective properties through the spreadsheets I referenced earlier. Look also at pre-tax versus post-tax when assessing cash flow.
Also, look at expansion potential: Purchasing a run-down two bedroom in a nice neighborhood, then adding a third bed room and second bath, then fixing it up overall, will net you a handsome profit almost anywhere. The cost of construction is almost always less than the cost of purchase...again, do your homework.

Hope this is helpful.
Good luck
Keith
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