Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I have a question on contract for deed. We are the sellers and have an interested buyer who would like to purchase the house via contract for deed. I won't go into all the details, but to say we do not have a mortgage on the home, so there is no issue there; and the overall details, so far look pretty reasonable, except they offered a low price which we are not going to accept. We are waiting to hear back on our counter offer.
The one question which I have is: is it normal for the realtor's commission to be paid in full at closing the deal; considering the fact that the house has not been fully purchased until the title changes hands at the end when they make the final balloon payment?
When I did Contract for Deeds how much commission collected up front was usually dependent upon how much down payment the seller was getting.
With a large down payment I would usually take the full commission, if it is a small down payment I would adjust down taking the balance later.
That's interesting Mike. I always advise my seller clients who are considering a Real Estate Contract to ask for a substantial down payment - at least 25 - 30%. It's got to be enough so that the buyer doesn't just up and walk away after a few years and after trashing the place. With a small down payment the buyer doesn't have much of a financial interest so it's easier to treat it like a rental.
An REC can be a headache for sellers so I want to protect them as much as possible - and a substantial down plus a good, protective contract will help do that. Yes, I realize that insisting on a larger down payment will lose some buyers, but I owe my allegiance to my seller clients.
Make the realtor modify the listing contract so he gets a payment on the signing but defers the rest of his commission until the balloon. Otherwise reject the deal. Its not that good of a deal from what you say anyway. In most states, if your land contract buyer defaults on the balloon, you will have to foreclose and give him credit for the deposit including what you paid for commission. Your realtor will be nowhere to be found at that point. Next time learn from this experience and put that into the listing agreement.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
