Short Sale ? (for sale by owner, real estate, credit) - Sarasota - Bradenton - Venice area - Florida (FL) -Manatee and Sarasota Counties - City-Data Forum

Salty Dave · 01-15-2011, 06:45 AM

Is it a common practice for the buyer to pay Realtor commission that is unpaid by the seller.

Big House · 01-15-2011, 07:19 AM

Quote:

Originally Posted by Salty Dave

Is it a common practice for the buyer to pay Realtor commission that is unpaid by the seller.

Actually the buyer always pays both agents, unless you buy the house directly your self from a home that is for sale by owner. The commissions are spelled out in the listing agreement. The money comes from with the sales price of the home, so they are built in to the deal. In addition to the price you have title and taxes and other conveyance and document fees that get worked in. So,. . . if you're buying, you're buying.

It is a bit of a chicken and the egg though. The way "the business" has structured it from an accounting stand point, it is on the sellers side of all the documents. And, if you are a seller, and involved in a short sale, you feel like it is you the seller that is paying the commissions. Those that sell property understand that commissions need to be paid in order to gain access to the larger marketplace, and calculate that into the price they are willing to sell. Short Sale sellers are not in that fortunate position, so from their perspective - they pay.

On short sales, usually it is a long waiting game, all the different lenders, lawyers, and lien holders have to sign off on the deal as well as the home owner, and the bank is usually the biggest hold up. So short sales often don't go well, take a long time, and the original price usually doesn't hold once it is advertised because other bidders get involved. Sometimes you win, most times it is very frustrating, and you can get just as good a deal through the normal process.

bbronston · 01-15-2011, 07:52 AM

Your question begs for more info....what's going on?

Peter the Brit · 01-15-2011, 08:56 AM

sounds dodgy and potentially illegal to me

photoman_6 · 01-15-2011, 12:36 PM

unless you got suckered into during negotiations, the seller always pays the commission.

Big House · 01-16-2011, 09:38 AM

Quote:

Originally Posted by photoman_6

unless you got suckered into during negotiations, the seller always pays the commission.

The only one that comes up with money is the buyer. It is all a matter of accounting, and it has been structured so that the buyer doesn't feel like he is paying for the commissions, but he is the only one that brings money to the table. So he is paying.

If a seller doesn't use an agent, and sells by owner, then no commissions are paid. Then neither the buyer or seller are paying them. But, if a home seller wants to use an agent, then he will add the price to the sales price of the home, and the buyer will be paying. The thought process is that he will gain access to a bigger group of buyers so that the commissions will be covered because of the better access. The "spin" is that the seller pays, but in-fact most often it is the buyer that pays - his money is being brought to the table. The seller doesn't pay anything until the buyer's money is exchanged.

On the other side of the argument. . . (ok) . . . lets have it. . . .

It, as I said is a bit of a chicken and the egg argument, but to entice buyers, they list it on the accounting side of the HUD that the money comes out of the sellers side. In reality it is just an accounting function to make it less of an issue for buyers. Also, the contract on the commissions is with the seller, the buyers have no choice in discussions concerning the amount to be paid. Very strategic arrangement . . . don'tcha think?

bbronston · 01-16-2011, 09:52 AM

OK, BH...I have to (respectfully) disagree here. If I buy an old reel from you for $50 and you use that money to buy a new GPS, who does the store make the receipt out to? You? Me? Both of us? Of course it is you because you are using your money and it dosn't matter one bit where the money came from.
The seller is being paid for his/her property. Once the money comes in, it is their money and they use for whatever they want...in this case, part of it goes to pay the bill that is coming due from the listing contract. I had a very similar thread with someone else in the Real Estate forum. Your reasoning is logical but kind of taken a bit too far, IMHO. So, how's the fishing? :-)

Big House · 01-16-2011, 01:06 PM

Quote:

Originally Posted by bbronston

OK, BH...I have to (respectfully) disagree here. If I buy an old reel from you for $50 and you use that money to buy a new GPS, who does the store make the receipt out to? You? Me? Both of us? Of course it is you because you are using your money and it dosn't matter one bit where the money came from.
The seller is being paid for his/her property. Once the money comes in, it is their money and they use for whatever they want...in this case, part of it goes to pay the bill that is coming due from the listing contract. I had a very similar thread with someone else in the Real Estate forum. Your reasoning is logical but kind of taken a bit too far, IMHO. So, how's the fishing? :-)

As I admitted it is a bit of a chicken and the egg. But you first argument would not be applicable since the gps store was never a part of the deal (for the property).

Lets modify the argument you make and add the gps manufacture who is involved prior to the sale of the gps unit to the buyer, when he (the manufacturer) establishes his branding, and price / profit, the gps store passes it (the cost) on to the buyer. The buyer can't negotiate directly with the manufacturer on the price or (his profit = to the commissions of the agents) - it just gets passed along to the buyer, as the cost. Same thing happens with the cost of the commissions. The store selling the gps unit has a deal to pay for the unit when the sale is complete - most manufacturers give the stores credit until the units are sold. The buyer pays both the commissions (and the manufacturer's cost to the store) that is passed on to the buyer. Same thing - it is purely a matter of accounting (and spin).

Now, don't get me wrong b, I think that the commissions and the real estate agents that do most of the work don't get paid very much for what they do. I am not making that case - I think the agents bust their butt for their commissions (most people don't know or appreciate all the work involved). I am just stating (an argument) of why it is the buyer who pays. I also think the brokers and the bigger companies skim too much off the top from the small share the agents actually receive. Not many people understand all of that either.

I think my argument is pretty sound - but still, the discussion can go in circles.

Fishing isn't so good at the moment - its too cold - BUT I will never give up!

bbronston · 01-16-2011, 02:09 PM

LOL---sorry I brought it up...that gave me a headache just trying to follow it but, hey, potato, puh-tawt-oh. Ever try DOA CAL jerkbaits with a waited wormhook? I used to do very well with those on trout and reds in the winter, even when it was cold. Sorry to get off topic.

Harbor Hopper · 01-17-2011, 07:19 AM

Quote:

Originally Posted by Big House

If a seller doesn't use an agent, and sells by owner, then no commissions are paid. Then neither the buyer or seller are paying them.

I sold two houses up north with no listing agent (I could still have it on the MLS without going through a realtor). I arranged all of the showings myself, and handled all of the negotiations & paperwork myself. Worked out really well for me (if you don't have the time, get a realtor! It can be stressful!). But, out of the selling price I still had to pay 2.5% to the buyer's agent. I just saved the 2.5% that would've normally went to the seller's agent.