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$200 is a possible future scenario, $1,000 DD is what sellers want today. But hey, after the first inspection and appraisal the seller knows exactly what their house is worth and should negotiate accordingly from that point forward.
Where's this magical world of 1k due diligence fees as the norm?
We bought a house in Cary last year with NO DD fee whatsoever, though we offered 500 bucks.
This is a house that was considerably more expensive than the hypothetical 250-350k homes we are discussing here in this thread. If anyone even suggested 500 bucks for a 250k home, I'd have laughed and found another.
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If you want to demand a $1000 DD of your buyers when you sell you home, go ahead but do not be surprised when some buyers walk. There maybe someone out there willing to pay it but it would not be me and I believe more people would balk at that figure then would be willing to risk it just to complete their DD. Hopefully they have buyers agents who would advise them against paying a $1000 DD fee.
Here's another scenario; the seller does their own inspection and appraisal removing all doubt about what the property is really worth.
Full disclosure: I'm not employed in the real-estate industry. I've sold property in the past and even walked away with a $260,000 check once but I readily admit that doesn't make me an expert. However, if I saw a property I liked and really wanted it I wouldn't hesitate to put down $1,000 DD to secure it. If you want to run with the big dogs you gotta get off the porch.
As a buyer I would not be satisfied with a seller's inspection and would still want and get my own inspection done. Haven't bought a house in 8 years. I am familar with earnest money, but DD $ is new to me. I'm at the lower end of the market and would be hesitant to pay it. The seller providing their own appraisal / inspection documentation would do little to help.
Here's another scenario; the seller does their own inspection and appraisal removing all doubt about what the property is really worth.
Full disclosure: I'm not employed in the real-estate industry. I've sold property in the past and even walked away with a $260,000 check once but I readily admit that doesn't make me an expert. However, if I saw a property I liked and really wanted it I wouldn't hesitate to put down $1,000 DD to secure it. If you want to run with the big dogs you gotta get off the porch.
1. Inspection
2. Documented needed repairs completed by contractors with proper licenses
3. Appraisal
4. Current survey, with all encroachments remediated.
5. Preliminary title report.
6. Full NC Residential Property Disclosure, with no "No Representation."
Then, maybe $1000 in DD would be worth considering.
That was the whole impetus for the DD Period (which is not contingent on a DD Fee in any way):
To get the parties to be more responsible when buying and selling.
For sellers to prepare a house for sale prior to marketing, not after contract.
For buyers to be Buyer Ready before looking for a house.
Big dogs been running since the dawn of Dog Years.
Smart dogs run longer.
Last edited by MikeJaquish; 07-16-2014 at 02:24 PM..
Reason: #6.
This is all rather timely to me. I just closed on my property in NJ last week and closed on our house in NC yesterday. From my perspective, I found my selling agent to be utterly worthless. She did a great song and dance and amazing pitch and we were so confident that we picked the right one. Of course once we signed the contract, it was nothing but broken promises and lack of communication. Aside from being reimbursed for the photographer and whatever it costs to list online, I really can't say she earned a penny of her commission. Our buyer was just a random walk in during an open house.
On the other hand, our buyer's agent (and the office staff) in NC was incredible. They were in constant communication with us, gave brilliant advice, went above and beyond to assist us in the process while we we 500 miles away. After closing they're still helping us out while we settle our affairs up here and make our way down next week. Those guys earned every penny of their commission. It is my mission to send every single person I know who is going to buy a house to them.
As for the whole (in my opinion crazy) due diligence thing that happens in the Triangle, our seller actually turned down our DD. They told us not to bother, we put down reasonable earnest money and negotiated openly and fairly. It's all worked out perfectly for us.
That's what many musicians said when Napster first appeared on the scene.
Technology has a way of displacing jobs that the market deems superfluous. Buyer's Agents are probably the next profession to go on the chopping block as they take ~ 3% commission and don't offer any legitimate value for their fee. That's money that could be better utilized sweetening the transaction for the buyer or the seller of the property.
3% lol. You must be new to Wake County.
Quote:
Originally Posted by MikeJaquish
I don't ever feel threatened that someone will buy or sell without an agent. Too many people appreciate the support.
It is quite untrue to state that:
A. Buyers agents bring no value. I have had too many consumers tell me otherwise for me to believe that. And, I judge myself by the support and value I think I offer. I know I do.
B. Buyers agents in Wake County always take 3%.
IF you have EVER been involved in a Wake County real estate transaction, and the tone and content of your posts makes that seem unlikely, you would know that about 75% of listings in Wake County offer 2.4% or 2.5% co-broke to buyers agents.
In addition, the sellers' market with agents bragging about "Sold in One Day with multiple offers!!!!" has put the legendary 6% commission at a 3.6%/2.4% split under tremendous pressure, resulting in lower commissions being very common.
Yet, none of that makes me believe agents will go the way of the dodo.
If nothing else, buyers' agents are the advocates for consumers to minimize unconscionable DD Fee ripoffs from scammers. It isn't perfect, but some support helps avoid $1000 DD Fees for fixer uppers.
Well said.
Quote:
Originally Posted by Grizzmeister
Imagine a future where every potential buyer has direct access to MLS to find a property. Once they find one they like they contact the selling agent to view the home. If they like what they see they put down $200 DD and 1% earnest money for a two week interval to get the property inspected and appraised. Boom, no buyer's agent is necessary and the whole process is fair for all the parties involved.
They have that. It's called the INTERNET. Unfortunately those sites are usually updated once a day, while an MLS can be set up to notify by the second. Finding a home is easy, getting to closing is the tricky part. You're either just trying to stir the pot, or you are completely clueless to buying and selling real estate.
I saw a home in Cary last weekend priced below $300k. Within 24 hours it had 25+ showings, and 6 offers. $1,000 in DD and it sold over asking. It was not priced way below value either. It was a good home in a great neighborhood.
While high DD sounds bad, how many transactions do you guys honestly lose a year? Out of 30-40 you might lose 3-4, because most issues can be corrected. Buying a home is a risk and you have to put some skin in the game.
The plus side to this market means it will start to really appreciate. Too many sellers have little to no equity and are unable to sell. Once the values start to come back up, inventory will also rise because people can finally break even or make a few bucks. Then we can move to a normal market where DD fees are more reasonable. DD is a double edge sword. Too little and the buyer can walk with little repercussion. Too much and they might lose their shorts if things go south. DD will return to normal when the market stabilizes and inventory goes up.
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