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Old 09-17-2019, 08:57 AM
 
3,927 posts, read 3,253,481 times
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Stalemate: FSBO seller expects to net 6% more because no commissions. Unrepresented buyer expects 6% discount on contract price. Both know they are right.
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Old 09-17-2019, 10:10 AM
 
Location: El paso,tx
2,402 posts, read 905,065 times
Reputation: 3864
Quote:
Originally Posted by JPrzybylski07 View Post
Well the way is is right now, the seller pays the buyerís commission ( at least thatís how itís shown on the statement). For the last time my whole point isnít to propose anything, itís just the fact that NO MATTER HOW ITís WORDED OR SHOWN ON THE STATEMENT, the buyer is ultimately the one paying commissions, through yes a surcharge on the property, even though the surcharge is not shown on the buyerís side, let me repeat, even though the surcharge isnít shown on the buyer side the buyer is still paying for it, yes paradox I know, but thatís the reality.

The surcharge (commissions) is already hidden and bundled into the sellerís sales price. Then people think because commissions are charged to the sellerís side that the seller is paying for them. No they arenít. They just jacked up the sales price, indirectly passed on the cost to you Mr. Buyer and then took credit for paying the commissions, because thatís exactly that the seller before them did, itís a perpetual cycle.
If it was overpriced, it wouldnt appraise. So with the commissions included, paid out of seller proceeds, it still appraised for value. So price wasnt jacked up over market value to include commissions. Market value is the same whether it is fsbo or not.
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Old 09-17-2019, 10:13 AM
 
853 posts, read 394,210 times
Reputation: 1198
Quote:
Originally Posted by Spottednikes View Post
If it was overpriced, it wouldnt appraise. So with the commissions included, paid out of seller proceeds, it still appraised for value. So price wasnt jacked up over market value to include commissions. Market value is the same whether it is fsbo or not.
And where do you get an appraised value from, other similar comparisons. An appraisal is comparing apples to apples, and all the apples are at a jacked up cost to the buyer because of commissions.
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Old 09-17-2019, 12:51 PM
 
Location: Columbia SC
9,307 posts, read 8,049,230 times
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Try this. Get an appraised value then add the realtors commission to it. I would call that FMV.
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Old 09-17-2019, 02:08 PM
 
Location: Raleigh NC
9,990 posts, read 7,522,099 times
Reputation: 8589
Quote:
Originally Posted by JPrzybylski07 View Post
And where do you get an appraised value from, other similar comparisons. An appraisal is comparing apples to apples, and all the apples are at a jacked up cost to the buyer because of commissions.
better yet, you should go to all of your listing appointments and tell them you'll list for 0%, and have the Buyer pay your commission. All they have to do is list for 3% less than what your CMA indicates. You're making them 3% (in your case).

I've not questioned whether the Buyer's side FUNDS the compensation of both agents. But it is the listing agreement where compensation is typically laid out. And should funds from the sale not cover the commission, it's the seller who is legally obligated to pay them.
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Old 09-18-2019, 07:44 AM
 
Location: East Lansing, MI
9,615 posts, read 8,165,737 times
Reputation: 4098
Quote:
Originally Posted by JPrzybylski07 View Post
And where do you get an appraised value from, other similar comparisons. An appraisal is comparing apples to apples, and all the apples are at a jacked up cost to the buyer because of commissions.


No, market value is market value. Period. It doesn't matter if it's FSBO, a listing with 2% commissions or a listing with 20% commissions.
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Old 09-18-2019, 09:15 AM
 
853 posts, read 394,210 times
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Quote:
Originally Posted by hooligan View Post
No, market value is market value. Period. It doesn't matter if it's FSBO, a listing with 2% commissions or a listing with 20% commissions.
I understand you are saying commissions are a variable that appraisers don’t account for, among other things like HOA dues, taxes, title insurance, etc. However in my opinion, actual market values have become slightly distorted overtime from sellers inflating their asking price to reflect costs they are ultimately legally responsible for. Sellers subconsciously have been passing the cost of commissions to the buyer and nobody stopped them because nobody noticed and now here we are with at least a 6% inflated market. Then again, can you really call something for sale inflated if someone is willing to pay for it?

At this point of time, it doesn’t really matter because everyone seems fine and happy with our current status quo. Sellers though can start to negotiate commissions be split or paid entirely by buyers, after all everything is negotiable and there is a lot of smoke and mirrors involved in a real estate transaction.
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Old 09-18-2019, 11:51 AM
 
Location: East Lansing, MI
9,615 posts, read 8,165,737 times
Reputation: 4098
Quote:
Originally Posted by JPrzybylski07 View Post
I understand you are saying commissions are a variable that appraisers don’t account for, among other things like HOA dues, taxes, title insurance, etc. However in my opinion, actual market values have become slightly distorted overtime from sellers inflating their asking price to reflect costs they are ultimately legally responsible for. Sellers subconsciously have been passing the cost of commissions to the buyer and nobody stopped them because nobody noticed and now here we are with at least a 6% inflated market. Then again, can you really call something for sale inflated if someone is willing to pay for it?

At this point of time, it doesn’t really matter because everyone seems fine and happy with our current status quo. Sellers though can start to negotiate commissions be split or paid entirely by buyers, after all everything is negotiable and there is a lot of smoke and mirrors involved in a real estate transaction.


As a seller, I want to sell my product for top dollar, period. If my house has a market value of $500K, that's the price I'm going to target regardless of what realtor fees might be associated.


Now, I might be willing to take less because I don't want to/can't carry the house until I get what it's "worth", but that's not really related. The bottom line in that scenario would be that the house was actually overpriced for the current local market.


Real estate is really like stand-up comedy. If the audience laughs, the joke worked. Period. If the house doesn't sell within the first few weeks, you're almost certainly overpriced for the current market.


Reps to you.

Last edited by hooligan; 09-18-2019 at 11:59 AM..
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Old 09-18-2019, 12:07 PM
 
Location: El paso,tx
2,402 posts, read 905,065 times
Reputation: 3864
Quote:
Originally Posted by JPrzybylski07 View Post
I understand you are saying commissions are a variable that appraisers donít account for, among other things like HOA dues, taxes, title insurance, etc. However in my opinion, actual market values have become slightly distorted overtime from sellers inflating their asking price to reflect costs they are ultimately legally responsible for. Sellers subconsciously have been passing the cost of commissions to the buyer and nobody stopped them because nobody noticed and now here we are with at least a 6% inflated market. Then again, can you really call something for sale inflated if someone is willing to pay for it?

At this point of time, it doesnít really matter because everyone seems fine and happy with our current status quo. Sellers though can start to negotiate commissions be split or paid entirely by buyers, after all everything is negotiable and there is a lot of smoke and mirrors involved in a real estate transaction.
Its not distorted because market value is market value regardless of if it is listed with an agent or a fsbo. FSBO sellers dont discount their homes by 6 percent because they arent paying commissions, nor do appraisers appraise fsbo homes for less. If a home is a fsbo, and a buyer makes an offer, the buyer is not going to save 6 percent. The fact is, the commission comes out of the seller proceeds. Thinking that if there were not commissions you could buy it for less is a misconception. The seller is paying the listing fee for marketing, convenience, having someone to represent them in negotiations, handling paperwork, etc. If you don't like having commissions paid, buy a fsbo, but you most likely will be buying it for market value, not mv minus 6 percent.
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Old 09-18-2019, 12:25 PM
 
Location: East Lansing, MI
9,615 posts, read 8,165,737 times
Reputation: 4098
Quote:
Originally Posted by Spottednikes View Post
Its not distorted because market value is market value regardless of if it is listed with an agent or a fsbo. FSBO sellers dont discount their homes by 6 percent because they arent paying commissions, nor do appraisers appraise fsbo homes for less. If a home is a fsbo, and a buyer makes an offer, the buyer is not going to save 6 percent. The fact is, the commission comes out of the seller proceeds. Thinking that if there were not commissions you could buy it for less is a misconception. The seller is paying the listing fee for marketing, convenience, having someone to represent them in negotiations, handling paperwork, etc. If you don't like having commissions paid, buy a fsbo, but you most likely will be buying it for market value, not mv minus 6 percent.


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