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My subject line is a bit misleading, perhaps, as this isn't exactly a planned house swap, but it's pretty close.
My wife and I just closed on a home. During that time we got to know the sellers a bit and had good interactions with them. Their plan was to sell their home and buy a smaller new construction home they were having built. At closing we could see that they were clearly upset, but they were happy for us. They turned over the home in immaculate condition. (They even repainted after taking down pictures even though we weren't expecting that.)
Turns out, their home purchase is falling through due to structural issues with the home they were to buy. This puts them back at square one in the home search process. Their funds are limited as they are retired.
My wife and I own a condo that we now need to sell (since we're moving into the newly purchased home). In our complex there is one other unit for sale that is significantly overpriced. Coincidentally, the sellers toured our complex today and fell in love with it. Also coincidentally, they were talking to my wife about their home shopping. As they were telling the story of the complex they found, my wife realized they were talking about our complex. They were beside themselves with excitement, not realizing where we lived or that we were getting ready to sell.
Here's the scenario using fictionalized numbers. The one other condo for sale in our complex is listed for $225,000. It is overpriced. One other condo that was overpriced sat on the market for 200+ day with a list price of over $230,000. It recently sold for $211,000. Prior to that sale, the 2 previous sales were at $211,000, and they moved quickly. As a part of our purchase financing process, we had our condo appraised. It appraised for $212,500. We were debating whether to list our condo for $212,500 or just set it at $211,000 so it would move.
We have not yet listed our condo for sale. We had a realtor help us with the purchase of our house and were planning to use her to sell our condo, but we have no agreement in place with her and she has done no work involving the condo.
I realized that we were potentially in a position to do a FSBO and avoid paying a commission. As it turns out, the buyers know a realtor who helped them sell their home for a $750 commission fee. She has indicated her willingness to serve as a dual agent to facilitate this transaction for the same $750 commission. This means that instead of being out $12600 in commissions to 2 agents, we'd only be paying $750 in commissions. What has been suggested is that we sell our condo for $205,000 since the sellers are helping reduce the overall commission payout. It's a win win in that they are out less money and we walk away with a couple thousand more dollars.
If this sale were to not happen, we'd go back to our original plan and list with our prior realtor. This seems like an ideal situation.
I know that on these forums the standard advice is to consult an attorney, but I know from prior experience buying and selling in this area that no one uses a lawyer for residential transactions. All the realtors use standard agreements, and I'm familiar with all that from our recent purchase. We also were really impressed at our closing with the other realtor.
I feel sure this isn't a scam attempt or some kind of long con. It really just seems to be a happy confluence of events. Is there any reason to not do this?
If you had it recently appraised, and your comfortable with that number, go ahead and sell it for that amount. But if you're going to sell FSBO, why would you reduce the price? What's the point of trying to save money if you're just going to give it away? But if you like them that much, feel free give them as much as you'd like.
(Asking for a reduced price is a typical ploy of someone buying directly from the owner. It's more to their benefit than it is to yours. And if you have an agent willing to handle the transaction for $750, it's not really the other party that is saving you that money, you could hire that agent regardless.)
Last edited by jackmichigan; 04-29-2014 at 04:45 AM..
I don't really see it as a reduction per se. If I can sell a home for $200,000, but have to pay a 6% commission or sell it for $195,000 and pay no commission, even though $195,000 is lower, at the end of the day it puts more money in my pocket.
I fully understand the rationale. A friend of mine just sold a property FSBO and the buyer talked him into reducing the price by the amount of the projected commission. He thought that was fine, but later kicked himself for doing that because he knew the purchaser would have paid full price. As long as you know what you're doing and are happy with the result, no one's going to argue with you. It's your money.
To me, the whole point of selling FSBO, or using a discount broker or an attorney, is to save money. If you want to give some of that up, fine. If it were me, I'd at least try to negotiate something more favorable--everything is negotiable.
EDIT: Get it out of your head that you always have to pay a high commission, or any at all. You don't. (And I'm a broker.)
I agree. It's a happy bit of coincidence that can solve your problem (selling the condo) and solve the other couple's problem (needing to make a purchase). In my opinion it's of great value to not have to go through the process of showing the condo, even if you don't live there. I don't see any reason not to move forward. I hope it works out for all.
I agree with Jack. If I were in your shoes, I wouldn't save all this money on the commission and then turn around and basically give all the savings to the buyer.
I don't really see it as a reduction per se. If I can sell a home for $200,000, but have to pay a 6% commission or sell it for $195,000 and pay no commission, even though $195,000 is lower, at the end of the day it puts more money in my pocket.
Exactly. Who cares that you're lowering your price for these buyers? At the end of the day, you get more money and 0 hassle. It's a no-brainer to me.
I agree with what others have said. There is definite value in not having to go through the hassle of listing your house. Probably a value you could put a specific value on, which is what the OP has done.
If you want to reduce the sale price that's up to you. Nothing wrong with cutting someone a deal, but you don't have to. You need to remember no matter what its a business deal. If it meant a quick deal with little fuss and you walk away happy then that's great. If I were in a FSBO situation I would not discount the price. The reason I'm doing a FSBO is to keep as much money in my pocket.i would however price it slightly lower than comps.
Last edited by Electrician4you; 04-29-2014 at 11:49 AM..
It looks to me like you are splitting the savings with the buyer. I don't see why it isn't a win, win situation for both of you.
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