Any realestate agents here?
 

I have a question.

Our contract for selling our home is about over. We are thinking about selling on our own. We are not really happy with the performance of the agents.

We had an offer recently that was too low but think the people will want it if we can sell for less by not having to pay for the commssion.

Am I getting into legal difficulty if these people make an offer?

Check your contract to see if it says something about if you sell your home within xx many days of your contract ending that you still need to pay the REA their commission.

It is a legal question that you are asking. Best answered by your lawyer. That said contracts are supposed to be specific, so it should say what it means if you read it carefully. People often read things into a contract that are not there, so read what it says and not what you think it should have said.

Laws vary from state to state so find out what the laws are in your state. The last person on the planet that you should get legal advice from is a real estate agent.

The first thing to do, as already mentioned, is to read the contract very carefully. The problem is, that the process may be viewed as an extended negotiation, if you didn't actually send a notice "rejecting offer and invitation to resubmit a new offer;"

Usually, there is one of two clauses, with two similar results...

1) since the potential buyer made contact with you through the listing agent, you may still be under obligation to pay the full commission

2) you may be required to pay a lesser (but still substantial) "finder's fee" after the expiration of the listing agreement.

This of course, could be waived by the agent/broker, but they could be a pain in the rear if they wanted to.

Some contracts do not put a time limit on it. If you sell the house to someone the realtor brought around, you could owe them their commission indefenitely.

Of course, the realtor would have to take you to court to get it. Unless it is several thousand dollars, most won't bother.

donsgal

I have to find the contract( packed!)

It is alot of money! Could be in the 40,000.00 dollar range.

Jill

for that kind of dough, you will definitely see a broker pursuing it, if they think it is their's to pursue...

Most listing cntracts have a parragraph that states the agent is owed a commission if they had shown the property to Mr/Mrs XYZ within 30 - 60 - 90 - 180 days after termination of the listing contract.

Your agent will have a copy of the listing contract - call & ask for a copy as yours is packed. You will go pick it up...

I have been an agent for about 10 years, quit 2 years ago to farm. Anyhow all people above are just about right on. Get a copy of the contract, and read it very well. Then talk to a realestate attorney. It will be well worth your money. If you can do it without paying the commision I would not blame you one bit. Good luck.

Josh

Yep, read the contract. But generally, if you sell it to someone who saw the house while you were under a listing contract, you will still have to pay commission to the agent. Considering they actually wrote an offer on the house, I would say you will have a hard time getting out of paying it.

First, confirm all this in the contract or by asking an attorney to look at it. Then I would approach the agent and try to negotiate a lower payment. If you're not going to re-list with them, they may be willing to take a percentage of their commission vs. not getting anything if another agent sells the house. But honestly, if they found this buyer for you, it seems only fair to pay them something.

homebirtha is RIGHT, in my opinion. I was a real estate agent in 2 different States and dealt in real estate for almost 40 years. If the real estate agent showed and wrote the contract with your buyers, you will owe the commission.

I'd say you were asking for trouble, any real estate agent who knows his/her stuff will keep track of all sales in their area. Even if you sell to someone who did not make an offer, but the agent had shown your house to, you will likely hear from the agent about commission due. And I can guarantee they will know what the contract you signed said, will likely have the part that says they are entitled to a commission highlighted in a neon color :)

Can't blame you for trying.

Hugs,
Marlene

Most listing & sales contracts have evolved over the years. Written by attorneys specilaizing in real estate law, the changes based in part by law suits against realtors.

When I started in RE it was a one page sales contract, it's now evolved to 7 pages.

Don't waste your money going to an attorney. These contracts are pretty tight.

Thanks for the responses.

At this time I don't even know if the people are still looking( they may have already bought).


I wanted to see what others had to say.

I can not lower the price for these people if I have to pay the commission.

Like I said, talk to your former agent. Some commission is better then none, and if they don't have to deal with the actual sale, they may take less as a "finder's fee" if you do all the contract work, deal with inspections, negotiation, finding a closing attorney, settlement, deed search, blah blah blah. Especially if you're going to list with a new agent otherwise.

Turns out I would have to pay commission if these people bought it.

We are going to go the FSBO route but have another question.

How do I know who has looked at the property with the agent before? Do I now have to prescreen every person that looks at it?

I've asked my husband (realtor). He said off the cuff that you might get a list from your former broker, not agent, of the people he would expect a commission from should they purchase the home. Of course, that doesn't help with the possibility of buyer's agents coming out of the woodwork asking for thier commission (which you, as the seller, would be liable for), if someone they spoke with buys the house. He's going to ask about it at their next meeting on Wednesday. Interesting question.

Thank-you and your husband! I wull be watching for the answer.

Is kind of hard to get what YOU THINK is worth... If you had only one offer, and YOU think is too low; maybe that's how much the place is worth! :Bawling:

Three houses all within 1/2 mile are listed as below.

2 acres, 2400 sq ft house $969,000.oo
1.4 acres 3000 sq ft house $1,300,000.00
5 acres 2900 sq foot house $ 1, 800,000.00

Our house

5.7 acres( next to National forest) 1600 sq foot and barn $ 720,000.00

Ours is smaller but of similar quality and the property can be subdivided, the others can not.

The 11.5 acres of land next to us is listed at 1,150,000.00( they turned down 900,000.00)

The other homes are all in subdivisions with covenants ours is not. We are bordered by National Forest and they are not.

The first offer we had was a long shot for the couple( police officer) and they new it.

An 8000 sq ft sp0ec home on 5 acres is going up, just up the road and I think it will be in the 3 - 5 mill range( It will have and indoor pool from what I here).

We are the small frys in this neighborhood.

Comps are always of the recent sales, not what is currently being offered for sale. You need to check the court house information for recent sales and compare to them.

The price range that you are in would warrant a few hundred dollars to a good real estate attorney for the proper advice.

Your price range is a difficult one to sell in right now, and you are in a fairly low income state compared to the price range. Those obstacles can be overcome, but it make take some extra work on your part. Do a good job, it's worth it. :)

I agree with Next 61. Many people want their property listed for more than it is worth. Did you agent set the price by a look of what other properties that are comparable to yours are selling for? That is the key to what your property is worth.

Also, it is quite unfair for a realtor to spend his/her money advertising, showing people the properties, open houses etc. which are out of the pocket expenses for realtors, and bring a potential buyer all to have you sell it later to that buyer or someone who saw it on the market when the realtor had it.

Realtors screen their clients and if you try to sell it yourself (FSBO) you have no idea who you are letting in your house and if they can in fact afford it.

You said it involved $40,000. Is that 40,000 below your asking price through your agent. If so, it sounds like it is overpriced as Next 61 indicated.
An agent's commission at the usual rate or about 6% would not be $40,000 unless your place is going to sell for over $650,000.

Also, you know the market is not as good as it was last year this time.
At any rate I hope you get it sold if that is your desire and that you can get your asking price.

People think that if a place is listed for 1.2 mil is worth 1.2 mil... is worth how much somebody is willing to pay for it! Unfortunately, some of us still think that is 2005.

I know the market is down in most places. I happen to be in a unique place, where the market has not let up.

While I realize the agent invested time and money into selling the place, they did not get the place sold.

I don't plan on selling to someone who has already seen the place with the agent. I know that most have already bought.

I know the comps and the I had two agents tell me that I am priced in the right range. But then again I don't need to justify my price to anyone but the buyer.

I appreciate all the help with the questions I have asked.

Laura - while your husband is at his next meeting tomorrow, would you have him ask if the term Realtor still only applies to people who belong to a certain real estate sales organization, known mainly for adhering to a strong code of ethics. Realtor is a registered trademake of said organization. Meaning NOT all real estate agents are Realtors.

Also have him get clarification on the term "Buyer's Agent" -- if anyone is working for the buyer as an agent it is the buyer who will owe the commission not the seller. You might wish to warn your husband if he ever shows a house and refers to the prospective buyers as his clients - the owner has legal recourse (it tends to upset sellers when they hear anyone but themselves referred to as a client unless it is made clear that the agent has a contract with the buyers - that usually makes 'em happy). The client is the person you work for - the person you work for being the person you will expect to be paid by.

Anyone selling a house though a brokerage should ask for and receive a list of persons who have been shown the house as the contract is in effect. There should be no problem with this because even if the prospective buyers or yourself attempt to make arrangements to work without the broker's knowledge, the contract will still likely protect their commission.

It's always good advise to read and understand any contract PRIOR to signing one.

Hugs,
Marlene


Disclaimer: Don't take my word for this, you should always talk to an attorney concerning legal matters.

Or you could just be familiar with the agency laws in your own state, as my husband is. Thanks for the heads up, though. It is most likely true in some other states, though we're not familiar with their agency laws. And membership in NAR is pretty much required here if you're working with a broker who subscribes to the MLS.

Jill..If you are using nearby "asking" prices to determine the market value of your property, you really don't have a sound price basis for making important decisions. Does the word "ethics" have a place in this discussion? It's the American way to do everything you can to help yourself, but not to look for a way to take someones work product without fair payment...Glen

Not using asking prices. All those homes went up for sale after ours.

"It's the American way to do everything you can to help yourself, but not to look for a way to take someones work product without fair payment...Glen"

Well I am Canadian! My husband is American though. I don't plan on taking anyones work product(if that is what you are implying).

I just did not want to get into a negotiation, contract for a lower price and then find out that the Previous agent was due money. I wanted to know up front my responsibilities.

We have not decided how to proceed but I think my agent has already dropped the ball. The listing is no longer on realtor.com or the MLS( over 10 days now in prime selling time) I think the decsion may have been made for
us.

I just wanted to be prepared and informed.

And before I end this, The prices in this neck of the woods have doubled in the last 6 years. How would that have happened if everyone priced on comps!
Land in this area is selling @ 75-100,000.00 an acre. Houses are costing 175.00 - 200.00 a square foot for new construction. I run a office for a company that is building custom homes ( very busy) and 200.00 a square foot will be old news by next spring. Homes an hour up the road are starting @ 300.00 a square foot and you can't find a single family home on a small lot for under $650,000.00 and the average price of a home sold in the last year was about 1.2 mil.

This is Homesteading Today............which I would guess has a large audience of folks who live off the land, by gardening, hunting, and farming. Most of the members probably do not have homes and land anywhere near the dollar amounts being thrown around on here. Most of us would love to not have a job outside of our homesteads. I am a REALTOR, and found it interesting everyones' comments on the subject.

We could not afford this land. We just happen to have picked the right property and are will benifit from a crazy market.


Then we will move somewhere were can live more off the land and not have to pay crazy taxes.

We live close to Jackson, WY land of the 8000 square foot second( or third) home. The rich buy here because of the good income tax laws. The bedroom communities have now taken off in price because a single family home there is now out of reach for normal people and acreage is only for the very rich.

The "poorer" rich are also buying in the bedroom communities close to Jackson.

We live in a beautifull area but are so busy paying the bills that we can't enjoy it.

Sorry but to me it looks like you are trying to rip off the real estate agent ,he did the work he found theses folks and matched them with the house and now you want to deny him his commision because you and the buyers cant work out a tiny detail (about 6% of the price) most sellers have a lot more than 6% flexability.
Now how about this to work it out for everybody. Why dont you loan the sellers some money? Say $40,000 , $100,000 or even more? You would be able to get the interest and reduce your taxbill somewhat .It sounds like you are not going to need all the sales amount right now so it could work out to everyones benifit. If you go that route go to a lawyer and have him secure it against EVERYTHING he can!

We are not selling to the people who made the offer!!!

They made an offer of more than 100,000.00 less than the asking price and could not even then really afford that. That was their max, it was a shot in the dark on their part.


We thought about the possibility of finding a way to lower it to close to that because it would have fit some timing for us( selling on our own was one of those). One of them is a local police officer and we liked the thought of them getting the property. It is not possible. It is history!

We did not and would not do that as it was and is not legal or ethical. It was a thought and I asked the question before I thought it through.

We got some great answers and thoughts from others that clarified it for us.

Here is an article in todays paper on the market in my area.

http://www.jacksonholenews.com/article.php?art_id=1841

Don't forget the appraisal "challenge"...
 

If you find a buyer willing to pay your asking price and if that buyer requires financing, the lender will require an appraisal. If the property does not appraise at the agreed-upon contract price, the lender will lend only to the appraisal. The appraisal is based---as noted above---on comparable actual "real" sales. Not listings, not your belief as to what the property is "worth". Buyers are normally reluctant to pay above appraisal. Your contract with the buyer is only the barest beginning of the process. Sellers hire realtors for a reason and a good deal of the value of that relationship is represented by the period between acceptance of offer and a successful and timely closing.

I agree with everything here.

Incidentally, my husband asked the question and one of the brokers where he works said that the contract we normally use around here (supplied by the MLS) does not have any residual clause. That is, once the contract is over, anyone can buy the house from the owner without paying a commission. Period.

It happens because agents take the market into account when doing a CMA (comparative market analysis). In doing a CMA or appraisal, agents and appraisers are not setting the value. They are making their best guess as to what a property, or a comparable property, will sell for. They use "sold" prices, that is, the prices buyers have paid, not the "asking" prices owners have requested. In a hot market, sold prices can sometimes be higher than asking prices, but in any case, it is the BUYERS who are the market and consequently determine property values. Huge increases can happen quickly. They just won't happen on your house alone.

Thanks for the info. My contract does have a residual clause. I like knowing what is happening in the rest of the world.

We have priced keeping in mind, three things, comps, appraisals and the market. Our agent at no time tried to have us lower the price or even hinted at it. Our unique situationis that we have a small house on acreage.

If we added 1000 sq feet and 300,000.00 to the price we would have sold by now. We knew that when we built what we could afford, it was not what most of the market wanted.

Our friend is today accepting an offer on his house (More square ft but 1/3 the acreage for over 900,000.00) and they have covenants as well.

It just takes the right buyer.

Interesting how states vary, eh? I also have the tiny house on large acreage (isn't that what we homesteaders like best?) in an area of larger homes on similar or small acreages. VERY hard to find comps on those, and it's usually a lot harder to come up with a reasonable guess as to value because you can wind up using homes in VERY different areas or trying to size down nearby homes. (I've had the 90 hours of training, but not the hours of apprenticeship, to be an appraiser, myself.)

It is very diffferent. I am from Canada and it is different there( or was when I had my mortgage done( 15 years ago there) They based it on quality, square footage and lot size. I still can not get my brain around this system.

My neighbors home on 2 acres and a bit more sq footage apraised at over 600,000.00 two years ago. The house beside them(1.4 acres) same sq ft was bought one year ago for 695,000.00 and is now on the market for 1.3 mil.

It makes no sense to me. 3 acre lots in the trees, in a subdivision have sold for 300,000.00 while 2 acre lot on the valley floor less than a 1/4 acre from it sells for 100,000.00