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Our current house is under contract, and we have some temporary housing lined up. We plan to buy or build in a small town that does not have much on the market right now. Until we close next month, we're not willing to enlist the services of a buyer's agent. However we are in an "information gathering" phase. A few questions:
1) If I call a listing agent to ask questions about one of their listings, how does that affect me, or my future buyer's agent down the road?
2) Same as 1 - what if I go to an open house? Are there going to be commission fights down the road?
3) As well as looking at houses on the MLS, I'm going to be aggressively seeking out land and houses that are not on the market. I'm specifically looking to find houses that I could buy directly from the owner without an agent. I've compiled a list of about 100 properties in this town that I'll contact owners directly.
When I sign a buyer's agent contract, how do I protect myself for these FSBO transactions? I don't want to pay my buyer's agent commission on a sale like this.
4) I talked to a listing agent about a property that has since expired. If I buy from that property owner directly, would the owner owe anything to their listing agent?
Our current house is under contract, and we have some temporary housing lined up. We plan to buy or build in a small town that does not have much on the market right now. Until we close next month, we're not willing to enlist the services of a buyer's agent. However we are in an "information gathering" phase. A few questions:
1) If I call a listing agent to ask questions about one of their listings, how does that affect me, or my future buyer's agent down the road?
2) Same as 1 - what if I go to an open house? Are there going to be commission fights down the road?
3) As well as looking at houses on the MLS, I'm going to be aggressively seeking out land and houses that are not on the market. I'm specifically looking to find houses that I could buy directly from the owner without an agent. I've compiled a list of about 100 properties in this town that I'll contact owners directly.
When I sign a buyer's agent contract, how do I protect myself for these FSBO transactions? I don't want to pay my buyer's agent commission on a sale like this.
4) I talked to a listing agent about a property that has since expired. If I buy from that property owner directly, would the owner owe anything to their listing agent?
Thanks!
1) No effect.
2) Can get a little stickier.
3) Instruct your agent to not show you any properties where s/he cannot assute s/he will be compensated by the Seller.
4) The Seller's contract with the listing agent will answer that question.
Now maybe I am wrong, but I am sensing that the OP has a belief that by somehow focusing on homes that are not currently listed they will uncover some home owner that is is magically willing to part with their property for some rock bottom price, hassle free, to some one they do not know from Adam.
While I suppose this could this could happen, just as if a room filled with enough monkeys and enough typewriters might eventually reproduce the collected works of William Shakespear,given enough time, much more likely is that just about every one of the "about 100" properties is gonna result in a door slam or worse.
I mean, honestly best case scenario, some dunderhead seller accepts your low ball offer on their barely fit to be torn down shack, you manage to do all the leg work in a timely manner, you get everything properly executed and closed and save, what, maybe the few car payments? If you factor your time even at minimum wage, your phone / gas / postage, anti-anxiety drugs, heartburn relief what are left with?
In all seriousness, I as a real estate investor, have purchased homes from "cold calling" type inquiries. It was not worth the time and aggravation! Even when I had a real deal attorney that the prospective seller could turn to it was among the worst possible of situations -- emotions of the sell constantly threatening to back out of the deal, lenders antsy that the whole setup was some elaborate scam, way more out of pocket money at risk for me to keep myself "protected"...
The thing that really grates at me is the OP seems not to be looking for some "long shot" -- they have temp housing lined up, their place is sold, they have a good idea that they want to live in this town, maybe even build on the right lot. That all implies "money in the bank" and for the life of me I do not understand how now, when finaancing costs are at historic lows, housing prices are way off their peaks and basically anyone with an inkling that they might be better off selling has their home listed everywhere they can, anyone with money in the bank would not have the wisdom to enlist the help of a pro...
I know that MOST agents would much prefer a buyer that is willing to "pull the trigger today" but the smart agents also know that it is neither realistic for ALL buyers to be on a 30 day timeline NOR a negative to have a buyer that is looking for the "right place at the right price" and GOOD agents will work hard to earn their piece of the commission. Prospecting for listings is something that agents really are not comfortable with, but those that are can 'qualify' a seller so that the deal goes much smoother. If the place is going to be torn down the good agent can help establish the factual and emotional basis to do so MUCH easier than any inexperienced buyer. Most agents will bend over backwards for a buyer that has money in the bank, realistic plans and desire to have a home that satisfies their needs...
Now maybe I am wrong, but I am sensing that the OP has a belief that by somehow focusing on homes that are not currently listed they will uncover some home owner that is is magically willing to part with their property for some rock bottom price, hassle free, to some one they do not know from Adam.
The reason I'm looking outside the mls is simple. There are just a handful of homes currently listed that I'm interested in. There are a little over 100 properties listed in this town. Culling out the ones that are out of my price range or 100's of thousands overpriced, ones that are not the style of house I'm looking for, and the ones that are not in the section of town I want to buy in leaves me with only 4 homes I'm interested in. If I can possibly get 3 or 4 more to look at out of the 100 cold calls, that increases my choices 100%. I'm going to focus first on existing homes, because they are a better value than new construction.
Yup. I spent a couple hours last week making a spreadsheet of all the completed sales in this town for the past year. Filled in a column with tax assessed value, and another that calculated the ratio of assessed value/sale price.
The average sale sold at 98% of assessment. The highest was 128% of assessment, lowest were in the 70's.
A couple houses that interest me that are currently for sale:
-Listed for $699k, assessed for $430k. 2900sf colonial built in the early 70's. 8 foot ceilings, nothing special architecturally, good location. Looks to have had a high end kitchen remodel 10-15 years ago. I'd be willing to pay 450 for this house.
-Listed for $599k, assessed for $399k. 2200sf cape built in the early 80's. Open concept, but dated. So-so location, large lot. Looks like all original.
There are dozens of listings with this disparity between assessment and asking price. They're obviously not selling.
Now I know how realtors are going to say that assessed value means nothing, it's comps, comps, comps. I'm going to disagree stongly, because the sales for the past year so closely fall in line with assessment. Half of all past sales were within +/- 5% of assessment. Like it or not, the assessed value is the yardstick buyers are using to compare houses.
Now I know how realtors are going to say that assessed value means nothing, it's comps, comps, comps. I'm going to disagree stongly, because the sales for the past year so closely fall in line with assessment. Half of all past sales were within +/- 5% of assessment. Like it or not, the assessed value is the yardstick buyers are using to compare houses.
It is comps - appraisals (what your lender really cares about) will be based on sold comps, not "assessed" value.
You may have a sample where the math seems to support assessments - but appraisals (based on comps) is what really matters.
You can of course argue all this as nonsense as RE continues to contract and get hammered.
Now I know how realtors are going to say that assessed value means nothing, it's comps, comps, comps. I'm going to disagree stongly, because the sales for the past year so closely fall in line with assessment. Half of all past sales were within +/- 5% of assessment. Like it or not, the assessed value is the yardstick buyers are using to compare houses.
Half of the homes are within 5% of assessment? That's all? Not much evidence of correlation there...............
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I want to toss a little fuel into this fire...
