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Ok realtors, please help me out with this one........
The listing price was $369,900. Got an offer of $360,000 if we agree to give the potential buyer $10,000 back for closing fees.
I've never sold a house before so...........
What does the above mean exactly?
Are our real estate agents/brokers commission included in that $10,000?
If the commission is in addition to the $10,000, is it calculated from the $360,000 amount or $350,000???
Well, I'm not a realtor, but I'm awake so thought I'd say congrats! Nice to hear good news from the sellers too.
The realtors can answer better re usual practice, but Id look at your listing agreement to see what it says and of course what your own realtor says. To me, sounds like you'd be paying $10k at closing (to the escrow company, lender, etc), plus realtor commissions on top of that based on the sale price of $360k.
Assuming the commission is based on the sale price regardless of what you contribute to closing, then you'd want to lower the sale price to $350k. But I'm guessing the buyer doesn't have enough cash for closing and that's why they'd want the higher sale price but w/ your contribution to closing, rather than just $350k w/ no closing help. Otherwise, they'd also benefit from lower taxes and lower payments on a lower sale price. Assuming $350k net is ok w/ you, maybe you could meet them halfway -- $355k plus $5k closing? You can run various scenarios and calculate commissions to determine what you'd net (maybe your realtor can do that for you ;0).
Either way, sounds like a deal is imminent -- congrats!
Congratulations on the sale, EllJay. I wish you and your entire extended family a smooth closing and hopefully a more amicable relationship between the siblings. Generally the commissions is calculated on the sales price (not factoring in the incentives like closing costs).
What this means is that the purchase price is $360K, they are asking for a seller's concession of upt to $10K in closing costs and then you pay all the other fees that you normally would pay. So no, the Realtor® costs are not included in that $10K.
As for what you base your fees on it is quite often the seller will specifiy that the fees will not be paid on the concessions. It often times is not stated in the listing agreement but is negotiated out at time of offer.
Ok, so if I am understanding you correctly..........
Unless there is something specific written in the listing agreement about concessions being included in the RE commissions, if we accept this offer, we pay the RE commission on the $350,000. Yes?
The offer sounds good to us (but we know nothing about this!). Is there any reason or advantage to us for making a counter offer of $355,000 and $5000 concession towards their closing costs?
Thanks!!
elljay
Quote:
Originally Posted by palmcoasting
Congrats on the offer!
What this means is that the purchase price is $360K, they are asking for a seller's concession of upt to $10K in closing costs and then you pay all the other fees that you normally would pay. So no, the Realtor® costs are not included in that $10K.
As for what you base your fees on it is quite often the seller will specifiy that the fees will not be paid on the concessions. It often times is not stated in the listing agreement but is negotiated out at time of offer.
If you get a chance, please read my post to Palmcoasting about RE commission. I'd appreciate your input!!
Thanks again!
elljay
Quote:
Originally Posted by DanielChang
Congratulations on the sale, EllJay. I wish you and your entire extended family a smooth closing and hopefully a more amicable relationship between the siblings. Generally the commissions is calculated on the sales price (not factoring in the incentives like closing costs).
Guess we were both up late last night! I have not been able to get a good nights sleep since all of this nonsense started with the house! When I do get settled............ BAM!! a hot flash sears through my body like a lightning bolt and gets my brain all fired up!!
On top of everything....... my daughter decides she is getting married the end of THIS August........... I'd crawl under a rock but it would be too hot!
elljay ~'.'~
Quote:
Originally Posted by christeen
Well, I'm not a realtor, but I'm awake so thought I'd say congrats! Nice to hear good news from the sellers too.
The realtors can answer better re usual practice, but Id look at your listing agreement to see what it says and of course what your own realtor says. To me, sounds like you'd be paying $10k at closing (to the escrow company, lender, etc), plus realtor commissions on top of that based on the sale price of $360k.
Assuming the commission is based on the sale price regardless of what you contribute to closing, then you'd want to lower the sale price to $350k. But I'm guessing the buyer doesn't have enough cash for closing and that's why they'd want the higher sale price but w/ your contribution to closing, rather than just $350k w/ no closing help. Otherwise, they'd also benefit from lower taxes and lower payments on a lower sale price. Assuming $350k net is ok w/ you, maybe you could meet them halfway -- $355k plus $5k closing? You can run various scenarios and calculate commissions to determine what you'd net (maybe your realtor can do that for you ;0).
Either way, sounds like a deal is imminent -- congrats!
Actually, I think the deal is a pretty good one, but then I have no idea about any of this stuff! It is a buyers market big time!
The house has been listed for 12 days and we've had 22 showings with 1 very reasonable offer and another one (supposedly) on the way. I think that's pretty good considering the number of houses for sale in that immediate neighborhood!
My SIL (the agent!!) tried to convince her siblings, that it would not be of benefit to renovate/update/clean up this old house and make it sparkle. Boy, was she mistaken!! It has absolutely made a 100% difference in the showing of this house!
elljay ~'.'~
Quote:
Originally Posted by gold dust
Boy, this really is a buyers market! Buyers are asking for everything!!
Congrats on your offer! It sounds like a good one.
My advice - COUNTER OFFER. You obviously have a house that is well positioned in your market place (based on the number of showings and the possibility of a second offer coming)...and one that shows well and buyers see as a value.
You should sit down with your agent and discuss this at length, but even though this is not an unreasonable offer, if your house was correctly priced - you are still making a concession...
Some things to consider:
What will the house appraise for (assuming that your buyers are borrowing, there WILL be an appraisal and an inspection)? Even with some of the purchase price being returned to the buyer as "closing costs" the home still has to appraise for the loan. Any counter-offer needs to be within that realistic range.
If you are satisfied with the price - are there OTHER things that are important to you that should be considered? Do these people have a house to sell (or is there any OTHER contingency in the contract?) You may be willing to trade off the closing costs, but what are they giving YOU? Does the closing date meet YOUR needs?
Are they pre-APPROVED for their loan through a reputable lender?
Would they consider limiting the scope of any requested repairs (once they have their inspector in) to a pre-determined dollar amount?
Yes, it IS a buyer's market (in general terms) - but that doesn't mean you have to give, give, give...You've done your job right in pricing the house correctly and you need to ensure that you maintain as much negotiating leverage as possible throughout the process.
You've said you are new to this...ASK QUESTIONS - of your agent. I know you chose your SIL because of the family relationship - I hope that you also hired her because she is a top-notch, quality REALTOR and has the ability to protect YOUR interests in this transaction.
Congratulations and good luck!
DaveP
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Nice to hear good news from the sellers too.
RE commission question
