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I’m unsure how to go about this... we have been renting a house for a couple of years in the Austin area, and would like to find a home to buy (even with this insane market). We have contacted our realtor and seen a few homes, even put a bid on one but we didn’t get it.. someone paid more than 100k over asking. We have also been in conversation with our landlord about a possibility of purchasing our rental. He mentioned that it would be a private sale. So that means our realtor wouldn’t be involved? We did sign a contract with her, but does that also mean she would be involved if we purchase our rental? I couldn’t tell by looking over our contract. Just trying to figure out the right thing to do.
If you signed a contract with your agent, then you need to read it (also I would strongly suggest you read and fully understand any legal and binding contract BEFORE you sign it next time).
This being said, I'm going to assume the contract you signed with your agent is an Exclusive Buyer's Representation agreement. Contracts always vary so again please read the one you signed but generally these contracts state that whatever house you buy then you agree to pay your agent a commission. If the seller, doesn't pay the commission then legally you are responsible for it.
The best thing to do is . . .
A) Read and understand fully the contract you signed so that you know what you've committed to
B) If you have committed yourself to paying your buyer's agent then have a chat with them about the possibility of buying your rental
It's quite feasible that you could come to an agreement with your landlord that would include them paying your agent who you likely committed to paying a commission to.
The great news about purchasing your rental is that you'll be in a good bargaining position since your landlord won't have to pay realtor fees, assuming you didn't sign something with your realtor saying that you'd have to pay him/her for having discussed it.
The bad news is that your landlord might think the house is worth more than you think it's worth. I was in the flip-side of this issue, I owned a little rental house and the tenants approached me about buying it a few months ago, they think it's worth $445k and the market appears to show that it's worth $525k. So I asked them to move out and am now in the process of selling it. To their credit I understand why they thought it was only worth $445k- they were a filthy family and it's going to cost me $10k to get the house ready to sell after repainting and repairing. Still doesn't bridge the gap- I'm still better off selling third party.
Right. The owner doesn't want to pay commission. He already has a buyer, you.
Quote:
Originally Posted by 4Figs
We did sign a contract with her, but does that also mean she would be involved if we purchase our rental? I couldn’t tell by looking over our contract.
That could be a problem. If you can't understand your contract take it to a lawyer for interpretation. The maybe good news is that those buyer contracts often have an exception if you find a house by yourself or, in your case, lived in it an want to buy it.
OTOH, since you don't know much about contracts it might be a good idea to offer your realtor a flat fee to handle the paper work and the title/escrow company. Get that agreement in writing specifying that she's not charging any commission to you or the seller.
Might cost you $1000 but it would be worth it to avoid getting burned since, again, you don't know much about contracts.
BTW, you can attach documents here. If you attach your contract one of us will take a look at it. See Managing Attachment below the message box.
Thank you for the responses. I have read the contract, and while it appears that any house we buy within the area must involve our realtor, I didn’t see anything specific about purchasing our leased home, if that would be treated differently or not.
I am aware that we may be responsible for those fees if we move forward with the purchase of this house... at least we would be avoiding all the bidding wars!
I will contact a real estate lawyer to oversee everything, I suppose.
Thank you for the responses. I have read the contract, and while it appears that any house we buy within the area must involve our realtor, I didn’t see anything specific about purchasing our leased home, if that would be treated differently or not.
I am aware that we may be responsible for those fees if we move forward with the purchase of this house... at least we would be avoiding all the bidding wars!
I will contact a real estate lawyer to oversee everything, I suppose.
While I haven't read your contract, if it really calls for you to pay a commission on the purchase of any house, that would include all houses that you find--including your leased home. You should check on what time period your contract covers.
Talk to your agent. We actually bought our present home FSBO. We however got together with the seller and agreed to 1.5% to our agent for doing the paperwork.
So approach your agent. You can point out that if this cannot be negotiated you may well not buy anything for a while. As an agent I know I would work out some deal to make a little if not the listed amount.
Call your buyer’s agent and tell her/him that you’ve decided not to shop for a house anymore and you are probably going to just buy the house you are living in. With any luck the agent will wish you well and that will end it. Or, the agent may let you know that you are obligated to pay a commission on the leased house, too. It certainly doesn’t hurt to see what happens. Cheaper than calling a lawyer first.
I’m unsure how to go about this... we have been renting a house for a couple of years in the Austin area, and would like to find a home to buy (even with this insane market). We have contacted our realtor and seen a few homes, even put a bid on one but we didn’t get it.. someone paid more than 100k over asking. We have also been in conversation with our landlord about a possibility of purchasing our rental. He mentioned that it would be a private sale. So that means our realtor wouldn’t be involved? We did sign a contract with her, but does that also mean she would be involved if we purchase our rental? I couldn’t tell by looking over our contract. Just trying to figure out the right thing to do.
Does the contract that you have with your Buyer's Agent have an expiration date? More than likely it does. Since you are already living in the home you would like to own, it shouldn't be a big deal to rent for another 6 to 12 months, or whatever, until the agreement expires.
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). We have contacted our realtor and seen a few homes, even put a bid on one but we didn’t get it.. someone paid more than 100k over asking. We have also been in conversation with our landlord about a possibility of purchasing our rental. He mentioned that it would be a private sale. So that means our realtor wouldn’t be involved? We did sign a contract with her, but does that also mean she would be involved if we purchase our rental? I couldn’t tell by looking over our contract. Just trying to figure out the right thing to do.
