Another realtor / house selling FSBO question.

6BangBronk

6BangBronk

Well-Known Member
Joined
Jul 15, 2005
Location
Durham
So I got my house for sale "by owner" on a few sites and having steady interest / showings. But I also got realtor's calling right and left and even tricked me into showing the house yesterday to one of them that only tried to persuade me into "signing up" to have them sell it for me. Even though they specifically said "they had an investor interested to buy" for me to come out to show it to them. I was kinda pissed (but held back) after they whipped out their "sign on" information after they saw they could make money...

My question: What's the legality of offering a "finders fee / commission" for any realtor in finding me a buyer to have them sell it for me but not by locking into any of their sign on agreements?

The issue I have is all of them have a 6 month lock in period. My property taxes just went up tremendously came Jan. 1'st and the estimated appreciation in my area has finally met it's match and is due to go up 2-3% with every month as well according to Zillow. Neither has kicked in yet according to the latest info being December and my house is not quite worth what I want out of it. I priced my house to sell in the next couple of months and not necessarily now to at least get the benefit of the tax increase come February. But I'm open if someone wants it now. I feel all the realtor's want to do is lock me in and jack the price up to a 6 month estimate only to sell it on the 6'th month for them to get their money on top of mine. Where as the sooner the better for me being within the next 2-3 months.

Does what I'm asking make sense? I don't have much realtor knowledge and just want to make sure I'm not breaking any of the crazy NC laws by telling them that "I'd accept a finder's fee". All I found so far is a status about "birddogging". Is this the same thing?
Currently it is NOT listed on MLS. And from my understanding can not be unless represented by a realtor. And my FSBO signs would have to come down (which is my main bringer in being it is off a busy main road).

I own the house in full so no liens/ ect. If that matters?

@Ron
Anybody else have NC specific FSBO knowledge?
 
There is no legal responsibility to pay a realtor on a FSBO if you don't sign anything.

OTOH, buyers that have a realtor looking for them will likely not call you if they can't get 2.5-3% when their buyer wants to purchase.

Buyers agents will typically call and ask if you would offer to pay the buyers agent commission if they bring the buyer. That's fair and I would expect to do that on a FSBO.
 
As said, if you called realtors, or offered to pay a commission to a buyers realtor for helping to sell the house, it will entice them to show it. Many buyers are afraid of FSBO because they don't know the process or they don't want to haggle with the owner (think someone who is emotionally invested).

You can get the house listed with MLS through FSBO.com. it cost money, but not as much as commission normally.
 
The above is spot on.

I'll expand a little bit for you.
Standard commission is 6% on a resi sale in this area. Yes it can be negotiated sometimes but lets not get lost in that mud right yet. Just stick to 6%.
Typically this is split between a buyers agent and a sellers agent, 3% each.


If a seller's agent is going to market your house they will want a contract to ensure that you will stay with them for 6 months. This is only fair when you look at it. a GOOD agent (and this is about like a good lawyer they exist but there are a whole lot more bad than good) isnt going to stick your house on the MLS and forget about it. They are going to MARKET it. Get it in books, do open houses, maybe even on a billboard for the right home, they will do targeted SEO and web search and lots of other creative things. House sales dont happen over night so if a realtor does everything right and a buyer sees their first marketing attempt it may take 45-90 days to close that deal. Consequently the last 45 days of a 6 month contract they arent doing sheeet. So a good agent will EARN this 3%.

Conversely a buyer's agent will work with a buyer and help them find houses. This is where all noob agents start out and as a result good BAs are even more rare than good SA. (Not that most REA dont do both, they do, but the best specialize) But a buyer's agent will have their buyer under contract that they will get a 3% cut of ANY house the buyer buys whether they find it for them or not. For this reason if you refuse to pay a buyers agent commission you are cutting your potential buyer pool DRASTICALLY.

Dont get bogged down with bird dogging, finders fees, referral fees etc. Just offer a straight BA commission. All the other things mean the same to you and I but to a licensed agent or realtor they can mean loss of licensure if not done 100% correct.

Whenever I sell a property FSBO I ALWAYS offer a buyer's agent commission and state as such in all of my communications. However I make one HUGE caveat that I (and you) as a layperson can do that a real estate agent can not. This is my exact wording:
"Seller is prepared to pay a buyers agent commission UP TO 4% for full asking price offers**"

Those stars will get the agent to call you when/if they find the property BEFORE they call their customer. I tell them this, "If the house sells for asking price and I dont have to cover any of the buyer's cost I will pay you 4% (more than standard) however any price negotiations or fess (closing cost, appraisal fee, survey, etc.) you want me to cover I expect that you I will split from your commission."

Now what you have done is while the agent is working for the buyer and in the buyers best interest you have also made them think before they lowball the shit out of you.


Now concerning seller's agents contacting you to sell your house.

This is actually a good sign. The fact that they have offered tells you they are at least willing to work at least notch harder than the average real estate agent, and as such they just might be able to sell your house quicker and for more than you can on your own. For the last 4 months I have had a property FSBO on the market (actually 3 different properties but 1 at a time) Ive developed a nice way to handle seller's agents that works for me that I will share and you are welcome to try it as well.

Basically I say this, " Hey I am grateful you think enough about my property to be interested in selling it for me. I am a little skeptical in the value an agent brings in today's climate with internet listings and such I just think the game has changed. Now I am not so stubborn as to bury my head in the sand and think I am incapable of learning so, do you have a specific buyer or multiple specific buyers in mind that you think will be interested in this property?"

If yes revert back to the above 4% conversation. If no:
"Look you and I both know their are agents out there who will throw my house on the MLS for $500 and do nothing more. So if I am going to pay you 6% of my selling price you are going to have to add value to the deal that I can not bring myself. While I respect that you are a professional and don't expect you to divulge ALL your secrets how about telling me very basically what you can do to sell my property that I cant do myself."

A rookie is going to start immediately talking about the power of the MLS, at that point I get a tad rude. "Look we have already covered that I can get it on the MLS for cheaper than you will charge me, so combined with your logic and your unwillingness to listen to my needs and wants it is clear that we will not be good business partners. I will still offer a buyrs commission but I will not consider you listing my house.

Every now and then you get one who will talk about Facebook campaigns, and SEO and talk about free housing books and which work and which dont...in this case LISTEN and consider them you might have just found a gem.

One final point here that if you havent yet learned you soon will. Almost every buyer's agent is going to require buyer's to get a pre-approval letter before they show them a single property. You can quickly become inundated with showing your house to folks who have no means to buy it or have no idea how to buy it. The house we sold back in December, I sold to a young couple 22 and 23 first time buyers and he was a Marine who had spent 2 years in the desert. By the time I was done, I would have traded the entirety of the profit I made for the time back I sunk into teaching these 2 how to buy a house. The saving grace for me was that I saw it as a repayment to this vet for his service. My point here is dont blow off agents because they are going to cost you X% that may be a deal.

Oh yeah, zillow or trulia or redfin they are great at compiling info. Their pricing models are about as accurate as a broken clock. If they are ever right it is more pure coincidence than any measure of accuracy.
 
paradisePWoffrd said:
As said, if you called realtors, or offered to pay a commission to a buyers realtor for helping to sell the house, it will entice them to show it. Many buyers are afraid of FSBO because they don't know the process or they don't want to haggle with the owner (think someone who is emotionally invested).

You can get the house listed with MLS through FSBO.com. it cost money, but not as much as commission normally.
Click to expand...

I read somewhere that you had to take your FSBO sign down if you posted on MLS??? Can't find it now so it must have been bad info???

I may consider come February. Getting too many bites with just Zillow, FB and a couple other free FSBO sites. And everybody that come to look at over the weekend acted like they absolutely love it??? LOL

Regardless, I know that nobody can show my home any better (or even half ass) for I have owned it for 20 years and lived there for 14. I know every inch of the place. I realize the realtor that came by yesterday had no clue to how to even start my gas logs. Which is my main selling tool and what sold me back in December of 1995.

Wife listed it on Facebook and got a bite from there. Seems people can't take a piss nowadays without being logged onto FB.

Ron, I may add your exact wording for commission come February. And I don't think I have ever read such layman's way of describing home sales. You need to start selling pamphlets to first timers...

Just had a repeat contact so I think it will sell soon without MLS if I just give it time? Will be 2 weeks come tomorrow.
 
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My question to 6BangBronc: If you're getting so much attention, do you think your asking price might be low?
 
shawn said:
My question to 6BangBronc: If you're getting so much attention, do you think your asking price might be low?
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Shawn, I know it is. But only by a sellable margin. A realtor may get another 7-8%??? It is set at an amount that I need for a down payment on my restaurant biz (still pursuing that) and I have only until April 1'st to have a contract or I forfeit my good faith with the restaurant deal.
 
You didnt ask but I am going to give you 2 pieces of advice.

1- Most folks, you know "normal" folks, folks that probably want a starter house. Most are the type that you probably dont like. They can tell you the release date on the next Apple device or the precise in game location of the latest RPG dragon basement game. These type of folks dont know anything about construction.

You start in telling them how you reinforced this and extra supported that and what they hear is "This house falls apart and needs work it isnt magically delicious like the other ones. NEXT" Part of the beauty of selling a house is not telling them too much.

2- You don't need 500 people to see your house. You need 1 qualified, interested buyer.

To that end property taxes, your needed down payment, market fluctuations, stock market performance mean ZERO about the price of your house. The ONLY thing that matters is what can I buy the same sqft for close to here. Period.

If I were you I would call the nearest <INSERT MEGA GALOMERATE REAL ESTATE COMPANY NAME HERE> and ask them to provide you with a complementary "BPO"....if your price is more than 5% either way off the number they come back with you need to change. As I found out back in September too low a price can hurt you as bad as too high when the bank refuses to fund the damn deal.
 
oh yeah.
Are you familiar with NC property seller's disclosure report?

Its a required doc for transfer of title.
There are about 40 items and you have to select one of the 3 following statements
"issues resent require correcting" - "state that their are no known issues" - "No disclosure given about such items"

Now where it gets kinda funny, by law you cant state no disclosure given if you repaired it yourself. (Consult your lawyer for specifics you can in some cases not in others)
Soooo...if you are advertising your house and claim (for example) NEW SIDING.
Then you cant claim no disclosure on lead paint. (Just as an example) and the statute of limitations for falsifying sales docs is waaaay longer than selling under false pretense.

IOW once a buyer buys it he has 1 year (again consult your attorney) to come back and say "you swindled me" However he has 10 years to say "you lied on this document".

What does that mean? Never advertise new anything that would require a permit to install. New carpet? Fine. New plumbing? I might tell you that in person but it damn sure wont be in my advertising.
 
Ron said:
oh yeah.
Are you familiar with NC property seller's disclosure report?

Its a required doc for transfer of title.
There are about 40 items and you have to select one of the 3 following statements
"issues resent require correcting" - "state that their are no known issues" - "No disclosure given about such items"

Now where it gets kinda funny, by law you cant state no disclosure given if you repaired it yourself. (Consult your lawyer for specifics you can in some cases not in others)
Soooo...if you are advertising your house and claim (for example) NEW SIDING.
Then you cant claim no disclosure on lead paint. (Just as an example) and the statute of limitations for falsifying sales docs is waaaay longer than selling under false pretense.

IOW once a buyer buys it he has 1 year (again consult your attorney) to come back and say "you swindled me" However he has 10 years to say "you lied on this document".

What does that mean? Never advertise new anything that would require a permit to install. New carpet? Fine. New plumbing? I might tell you that in person but it damn sure wont be in my advertising.
Click to expand...

Everybody I have showed it to either are looking for their starter home, want out of their HOA or want to downsize. I probably have the only house for sale within 20 miles without a HOA, under 900 sf with a garage, and has cheap county taxes but still located within 4 miles of a shopping center. The house next door is same except no garage and gravel drive and it has 3 small bedrooms (equal size to my 2) and it sold for $110K 4 years ago is what I'm going from (Plus what I feel is a tad sellable under). House sales in Wake County are so erratic that there is no way to determine value. Value in Wake County is what the buyer is willing to spend. And this is as well built house you will find. Once they view the house they realize the serenity. Plus I have 3 other barns not pictured as bonuses. It's total quiet and total privacy. 6 houses around it has the same folk that bought them new in 1980's so they are close to retirement age. It's a perfect spot...

Lead paint stopped in 1978. House was built in 1981 so all good there. Although there is no permit required in Wake County to replace windows or roof on existing houses (I called and asked zoning), the new windows were installed by Window World and I had 2 buddies that did most the roofing work that they said they could easily vouch for a report from their day jobs "Baker Roofing Company" so I feel good that I'm all good there.

I've combed this house with a fine tooth comb. I had to for I bought it through USDA myself and their inspector kept me busy. This house is 100% sound. "There are definitely no known issues".
 
I'll throw in my 2 cents here. Bought two, sold one with no agents. The seller's disclosure as mentioned above it important and really the only thing you need to do on your end. As for the money, it's a business transaction so absolutey everything is negotiable between all parties, you just have the real estate attorney write it up properly. If you want to offer a small finder's fee, then so be it. Just don't sign anything from a buyer's agent. Period.
 
6BangBronk said:
House sales in Wake County are so erratic that there is no way to determine value. Value in Wake County is what the buyer is willing to spend.
Click to expand...

I would disagree with that. A good agent should be able to get pretty close to the value of any home in the area. It is not that hard to do.
 
DSM Turbos said:
I would disagree with that. A good agent should be able to get pretty close to the value of any home in the area. It is not that hard to do.
Click to expand...

I had it appraised by the closest neighboring appraiser (for hoped to be accurate) before I put it up and didn't like what he came up with at all. It was a total waste of $350 and I hope I can send him a copy of the closing to prove him wrong. He says it is 24% lower than my asking price which I call BS. His comparables were foreclosures / auctions for there weren't any houses sold within last year that compared. I decided to go on pure instinct before I shuck any more senseless money.
If it don't sell, I will hang onto it til it does sell and use the money to build my cabin in the mountains instead of the restaurant. It's a win win. The mountains would be nice to live, but me and the wife are just as happy here with a vacation cabin. Especially with what we got in Durham. I just need to find another job before mine drives me crazy... PERIOD!

I just wonder why the only product spitting out around here is $300k homes??? And how the hell do ya'll that own one afford them??? Land Inheritance? Help from family? Lottery winners?

2br/1baths are only in the form of an apartment anymore and that's even getting rare. And at a $800-1000 a month rent. No wonder why I'm having so much interest, these folk coming into Wake County have no choice? So far most of mine have been transplants like I was.

At the time in 1996 this house was a stretch for me. And if it wasn't for complete resurrection (please don't take it religiously for it was the only word to describe), my bungalow in Durham was barely affordable for the exact same price as well?
 
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DSM Turbos said:
I would disagree with that. A good agent should be able to get pretty close to the value of any home in the area. It is not that hard to do.
Click to expand...

One more notable worth mentioning. There are 500 less homes for sale on the market every MONTH in the Triangle last year dwindling down now to just over 3k total inventory houses available (according to TMLS data). And 25-30,000 more people move here or born here every year. Do the math...

I work in the Civil field and know how the ridiculous red tape for new development is making for a perfect storm. It's going to be the 1980's all over again around here soon. Going to have to be or the market will have no choice but to skyrocket.
 
6BangBronk said:
I had it appraised by the closest neighboring appraiser (for hoped to be accurate) before I put it up and didn't like what he came up with at all. It was a total waste of $350 and I hope I can send him a copy of the closing to prove him wrong. He says it is 24% lower than my asking price which I call BS. His comparables were foreclosures / auctions for there weren't any houses sold within last year that compared. I decided to go on pure instinct before I shuck any more senseless money.
If it don't sell, I will hang onto it til it does sell and use the money to build my cabin in the mountains instead of the restaurant. It's a win win. The mountains would be nice to live, but me and the wife are just as happy here with a vacation cabin. Especially with what we got in Durham. I just need to find another job before mine drives me crazy... PERIOD!

I just wonder why the only product spitting out around here is $300k homes??? And how the hell do ya'll that own one afford them??? Land Inheritance? Help from family? Lottery winners?

2br/1baths are only in the form of an apartment anymore and that's even getting rare. And at a $800-1000 a month rent. No wonder why I'm having so much interest, these folk coming into Wake County have no choice? So far most of mine have been transplants like I was.

At the time in 1996 this house was a stretch for me. And if it wasn't for complete resurrection (please don't take it religiously for it was the only word to describe), my bungalow in Durham was barely affordable for the exact same price as well?
Click to expand...


I know you hate hearing this.
But the banker is going to use that same appraiser and if he says it is worth $50k they will give a borrower .8 x $50k. Period.
or .97 x $50k if FHA
or maybe even 1 x $50k if USDA.
Not a penny more.

Your opinion. My opinion. None of them matter.

Freddie and Fanny are federally regulated and if the banker approves a loan above those numbers not only does he lose his $50k/yr job he also is criminally liable in federal court.
So...

If your valuation is right, and it may very well be, you better go find your own comps to justify your numbers and hand them to the buyer's appraiser the day he walks on the property. Because legally he has to have comps to back up his findings. If there are truly no other 2/1 stick builts then that means the market doesnt demand 2/1 stick builts in your area. Your opinion not withstanding.

This is an area where a seller's agent may help you. They have existing relationships with appraisers and while it shouldnt matter....
 
Ron said:
I know you hate hearing this.
But the banker is going to use that same appraiser and if he says it is worth $50k they will give a borrower .8 x $50k. Period.
or .97 x $50k if FHA
or maybe even 1 x $50k if USDA.
Not a penny more.

Your opinion. My opinion. None of them matter.

Freddie and Fanny are federally regulated and if the banker approves a loan above those numbers not only does he lose his $50k/yr job he also is criminally liable in federal court.
So...

If your valuation is right, and it may very well be, you better go find your own comps to justify your numbers and hand them to the buyer's appraiser the day he walks on the property. Because legally he has to have comps to back up his findings. If there are truly no other 2/1 stick builts then that means the market doesnt demand 2/1 stick builts in your area. Your opinion not withstanding.

This is an area where a seller's agent may help you. They have existing relationships with appraisers and while it shouldnt matter....
Click to expand...


Good point Ron for if wasn't for an "in-house" appraiser I wouldn't have been able to purchase my Durham home. He had to bend it to make it what it was. And it wasn't worth near that. I just fell in love with it and saw the potential but didn't have the money to fork up front. Now the interest in us selling the durham house has become an extensive list after all I did to it. Got 3 members here so far requesting me to inform them when comes up for sale.

I will consider the Fred Fan effect in a couple months. Right now I'm banking on the TMLS updates. Between November to December (and the same throughout the entire year)

New listings monthly -13.3%
Closed Sales +9.1%
Change in Median Sales Price +11.0%

I'm a gambling man. Plus I have about as much in labor and materials in this house than the appraised value I was given. I refuse to loose money in the fastest growing county this side of the Mississippi???
 
6BangBronk said:
I had it appraised by the closest neighboring appraiser (for hoped to be accurate) before I put it up and didn't like what he came up with at all. It was a total waste of $350 and I hope I can send him a copy of the closing to prove him wrong. He says it is 24% lower than my asking price which I call BS. His comparables were foreclosures / auctions for there weren't any houses sold within last year that compared. I decided to go on pure instinct before I shuck any more senseless money.
If it don't sell, I will hang onto it til it does sell and use the money to build my cabin in the mountains instead of the restaurant. It's a win win. The mountains would be nice to live, but me and the wife are just as happy here with a vacation cabin. Especially with what we got in Durham. I just need to find another job before mine drives me crazy... PERIOD!

I just wonder why the only product spitting out around here is $300k homes??? And how the hell do ya'll that own one afford them??? Land Inheritance? Help from family? Lottery winners?

2br/1baths are only in the form of an apartment anymore and that's even getting rare. And at a $800-1000 a month rent. No wonder why I'm having so much interest, these folk coming into Wake County have no choice? So far most of mine have been transplants like I was.

At the time in 1996 this house was a stretch for me. And if it wasn't for complete resurrection (please don't take it religiously for it was the only word to describe), my bungalow in Durham was barely affordable for the exact same price as well?
Click to expand...

You may have had a bad appraisal, but the chances are like Ron said, it will come up pretty damn close if it closes. Hopefully for you though it comes in a lot higher. Rules have only gotten tighter since you have bought though, it is VERY strict on the entire lending process.

Honestly 2/1 houses aren't in a big demand from everything I know, most people want 3/2 at a min. There is a lot more for sale in the triangle other than 300k homes. Work hard, play hard, thats how I afford mine, I have 1 acre on the south side of Raleigh on the Cary boarder. The market also always slows down around December and Jan, nobody wants to put theirs for sale during these months. Like Ron said, there is a reason you don't see a ton of them.
 
I have a 3/1 and would be in a similar situation trying to sell. Most folks just don't like to compromise or live within their means I guess. Long range plan is to build a small addition to make an en suite for the master and get that second bathroom. Maybe next year.

A coworker of mine actually just bought one of those $300k homes in Willow Spring over the summer. It seems ridiculous and overpriced to me. He was all excited about the large lot but all I saw was an open field of grass that used to be cheap-ass farmland. I don't know why he paid so much other than the market is bearing it. I know he has to make quite a bit less than I do with two kids and car payments and a stay at home wife so I have no idea how he affords it.
 
This conversation feels a lot like "But I paid $24k for for my TJ in 03 and then I put $7k in chrome on it and $4k in stereo upgrades and $5k in tires and wheels and I know it depreciates but my labor offsets that so....


03 TJ for sale.
220k miles
bald 35s
Bunch o chrome
$40k
 
I'll back up what everybody else has said: if your comps are a bunch of foreclosures, you're going to get fucked (unless it's a cash purchase). BTDT. If the house doesn't appraise, the bank walks.

6BangBronk said:
Good point Ron for if wasn't for an "in-house" appraiser I wouldn't have been able to purchase my Durham home. He had to bend it to make it what it was. And it wasn't worth near that.
Click to expand...

Just FYI, since it doesn't sound like you've bought/sold since 08: That doesn't happen anymore. The appraiser gets picked from a lottery. The come out, do a condition assessment, go back to the office, find comps, make condition adjustments, and that's your price. If you don't like the appraisal, too bad.
 
Ron said:
This conversation feels a lot like "But I paid $24k for for my TJ in 03 and then I put $7k in chrome on it and $4k in stereo upgrades and $5k in tires and wheels and I know it depreciates but my labor offsets that so....


03 TJ for sale.
220k miles
bald 35s
Bunch o chrome
$40k
Click to expand...


Generally...
Titles depreciate
Deeds appreciate

Crossed the line in typical 4x4 fashion... I see no correlation Ron for I wouldn't spend 10K for a fu-kn JK. Much less 24k.:flipoff2: Then add chrome???? Over my head on this one, you need to lay that crack pipe down every so often!

There's plenty of room to expand on the house and build a shop. 30% impervious is hardly touched in this R-30 lot. And you can park yo buggy on the curb! There's probably not another house on the market in the area that you can do this.

What's the odds somebody wants to invest in a rental???

As long as my emails and phone keep singing and I keep setting up appointments... I think ya'll jealous!:D Or extremely bored on here now days... Haters...:shaking:
 
6BangBronk said:
Generally...
Titles depreciate
Deeds appreciate

Crossed the line in typical 4x4 fashion... I see no correlation Ron for I wouldn't spend 10K for a fu-kn JK. Much less 24k.:flipoff2: Then add chrome???? Over my head on this one, you need to lay that crack pipe down every so often!

There's plenty of room to expand on the house and build a shop. 30% impervious is hardly touched in this R-30 lot. And you can park yo buggy on the curb! There's probably not another house on the market in the area that you can do this.

What's the odds somebody wants to invest in a rental???

As long as my emails and phone keep singing and I keep setting up appointments... I think ya'll jealous!:D Or extremely bored on here now days... Haters...:shaking:
Click to expand...
Around here only ppl buying a 2bd/1ba is to rent it, and they only want to give you .50 on the $1.

I was in a similar situation with my home, but a much different market. I had a family friend that wanted to rent and after it being in the market for a yr, I took them up on it. After the new of the listing wears off, only changing the price +/- 1% will bring it back up in the online ads.

If you are interested in a realtor, one option is to let them know and host an open house for Realtors. You can use that time to offer them incentives.
 
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