Selling house without a Selling Agent?

[Hannibal]

Wife and I have been talking about moving for a couple years now. We'd contacted a real estate agent we used before and expressed this was a very relaxed "interest" and many things needed to happen in order to move sooner vs. later. Based on that, we looked at a few places a couple years back and found nothing of interest. Fast forward to this past year, we had the same discussions but like last time - the driving issue was the market available for selling our house. We are in the situation of buying the current house at the wrong time and needing to basically "pay" to get out. Purchase of a new house is not an issue money wise but the current house results in some cash out expense (that basically amounts to the closing costs). In other words, we have the $$$ to pay to get in but have been working to lessen the $$$ needed to get out (need to increase equity, market needs to improve, etc.).

Anyhow - a few months ago, we had a few repairs/updates that came up that basically crushed the "cash" available to "pay to get out" so we tabled the thought of moving to next spring (2016).

However, just recently, a co-worker of a friend has expressed interest in the house. She is looking in the area and in the price range and has expressed interest in the house. We've explained it's not show ready (some repairs on going and the house needs a good spring cleaning following the harsh winter). Just the same, we are willing to entertain the idea.

She currently has an agent but we do not. And honestly, given that we are not on the market, I don't feel like securing one. In reality, the money saved in the commission/fees (portion of the closing) would make the money work - assuming asking price. At this point, it's asking price or no deal. We don't have any flexability in the price and really have no qualms with targetting our Spring 2016 timeline. It's more or less take it or leave it.

That being said, how pratical is it entering into this process without an agent on your side? I would likely have documents reviewed by a family member who is a former agent (expired license) and would likely run it by a real estate lawyer.

Have any of you sold a house without an agent (and not being one yourself)? What are the risks?

 

[nutz]

Skip the real estate family member and go straight to a title attorney. They will make sure the paperwork is straight. Who is paying her agent?

 

[Hannibal]

Hasn't been discussed. This has all been informal. My bottom line is my bottom line. In reality, I need to net X to make this deal happen so if she wants to label it X for house and Y for closing, as long as those numbers are where they need to be, I don't care.

I am hopeful being that this is a "find" that was off the market and didn't involve her agent, that she works around them all-together in order to save everyone money. But if she's actively working with an agent, that would be tough to do.

 

[awpitt]

Hasn't been discussed. This has all been informal. My bottom line is my bottom line. In reality, I need to net X to make this deal happen so if she wants to label it X for house and Y for closing, as long as those numbers are where they need to be, I don't care.

I am hopeful being that this is a "find" that was off the market and didn't involve her agent, that she works around them all-together in order to save everyone money. But if she's actively working with an agent, that would be tough to do.

With them having an agent, it would be a 3% commission instead of the traditional 6% commission. That 3% should come out of the buyers funds at settlement. All the paperwork will have to handled buy a title company or a settlement attorney.

 

[rhenderson]

Bottom line - both buyer and seller are responsible for whatever they agree to IN THE CONTRACT. If there are issues that are not addressed in the contract - who knows what the result will be. If you need to get a specific amount out of the sale - including payoff of any mortgages/liens- you are responsible for reviewing the contract for that result - BEFORE YOU SIGN IT. If the agent is wrong in how much you will net, the contract will still be enforceable.

f the buyer has not hired the agent they are working with as a "buyers agent" they would have no obligation to that agent. However, if you deal with that buyer through their agent, you will probably be asked to sign a listing agreement with that agent's broker which will be same as you listing your home with your own real estate broker. If you elect to sell your house without any agents involved be careful to address all the issues related to transfer of the property, distribution of closing costs between buyer and seller, registration fees, prorating of property taxes, association fees, water fees, etc. In addition you need to address things like how much oil/gas is to be left in the fuel tanks or if the buyer is to pay for such fuels**, how measured, etc. Any thing you plan to remove from the house that is normally considered to be part of the house - curtains, fireplace inserts, dining room/foyer chandelier, etc. must be addressed in the contract. A pre-settlement walk through by the buyer should also be included. The contract also needs to contain time limits for the buyer to obtain financing or to sell any properties they need to sell to complete the deal.

** I had one settlement nearly fall through because the seller insisted on payment for XX gallons of oil that was being left in the tank. As the buyer I thought that was part of the "heating system" but was told by the settlement attorney that the tank was part of the system but the oil was not. The resolution was to have the seller call their oil company and have the tank pumped out. When I sold that house - without agents - the contract called for the buyer to pay for the full tank of oil at 25 cents a gallon less than the delivery price of the oil and I as seller had to provide a bill that showed the tank had been filled to capacity within seven calendar days of settlement.

 

[vince77]

Buying and selling real estate generally is the largest financial transaction most Americans make in their lives. I'd want to see a pre-qualification letter from a lender before I invested any time if it were me. You'll need an real estate attorney to FSBO.

 

[rhenderson]

One more point - you and the buyer cannot save the same money! You both are looking at dealing without an agent to reduce costs. You are seeing 6% less fees as commission going to the agents/brokers. The buyer is looking at saving 6% on the price they pay. If the buyer gets the house for 6% less - no savings for the seller. If the seller simply eliminates the 6% commission to the agents/brokers - no savings for the buyer. The most likely solution is buyers and sellers split the savings.

 

[LightRoasted]

If I may ...

It is very important to also ensure, especially if you do this yourself, is to be honest with the disclosure/disclaimer. If you know of any latent defects, if there are any, about the house and/or property, you must disclose no matter how minor you think the problem is or was... even if you are selling "as is". If you know of something, you must disclose. There can be severe penalties if you don't and it is found out later that you knew something and didn't. Also, real estate agents do not work for free. Consider increasing the asking price of your house to cover a 2.5% - 3% commission. You don't want your buyer to have to deal with figuring out how to come up with a large sum to pay their agent the commission fee. Also, hope that you haven't told your prospective buyer your "bottom line" amount. Might be harder to increase it to cover commission, and other settlement costs which you will be responsible.

For the "Maryland Transfer and Recordation Tax", depending on if your buyer is determined to be a first time home buyer, based on a sales price of $350,000, your 50/50 contribution could be $3,875.00, if in St. Mary's County. If paying it all, because you are very nice, it could be $6,875.00. That $6,875 in addition to a 3% commission of $10500, if you are indeed going to pay it, plus other fees you will be responsible for, will mean you will have to calculate your sales price to accommodate an increase of nearly $20,000.(based on a $350,000 Sales price) I used 3% as a commission number because that would be for the buyer's agent. If you actually had a seller's agent, you would negotiate a commission fee, most commonly around 6%... 3% to the seller's agent, 3% to the buyer's agent.

There are so many possible scenarios, fee structure wise, pitfalls, etc. Such as, if your buyer gets a home inspection and something is found, say, the roof shingles are at their end of life and won't make it another season, or the fascia is rotting and needs replacing, who is going to pay to fix those? You? The buyer? Some from each? Will it be an out for the buyer to walk away from the deal?

There are agents that will help you for a small set fee and not the regular commission rate structure. Seek out that help if you need it. Unless you do this type of thing often, selling a house can be extremely challenging. Even if everything goes right. Deals fall through at the last minute, at the settlement table even. It is not easy like selling a car and signing over the title.

Just my opinion.

 

[keekee]

Skip the real estate family member and go straight to a title attorney. They will make sure the paperwork is straight. Who is paying her agent?

Agreed! Everyone is making this sound so complicated - but I don't think it is (?)
My house was FSBO when I bought it.
I had been working with a real estate agent when I was house shopping, but she was going to walk when I found the FSBO house because she would not make any money.
Can't blame her.
So in order to protect myself, and not knowing any better, I hired her as a buyer's agent for a lower fee.

I was in contact with a title attorney, who really walked me thru all of the paperwork that I needed to submit, required inspections, etc.
I ended up always being one step ahead of my "buyer's agent".
With each requirement, I had most of them done before my agent even told me that I needed them.

Bottom line is - I believe that paying the buyer's agent was a complete waste of money.

I'd at least meet with a title attorney and see what advice they can offer.

On a side note - I bought from an older couple who did not live in the area, which is why I was getting the paperwork together - verses the seller.

 

[nutz]

Agreed! Everyone is making this sound so complicated - but I don't think it is (?)

The real estate agents have to make the process seem too complicated for ordinary mortals. How many of you knew that title insurance was optional for the buyer? That is an extra bonus to cover the attorney/settlement co's. butt, yet most of them hawk it as a customer service thing to protect you, the buyer.

 

[Hannibal]

Showing went well apparently (I wasn't there). According to my wife, she was very happy with the house and commented that it was in much better shape than others she had seen in the same price range. From my other contact (how this fell in our lap in the first place), she currently has an offer on a foreclosure and should know something in the next week or so. She's had a couple of these fall through already so I am not sure what her chances are. My contact passed along that should the foreclosure deal fall through, she intented to make an offer on our place. That's encouraging. My wife (and our contact) both conveyed our situation and that our pricing is non-negotiable. This isn't a statement of hardball - it's simply the facts of the money - and the reason we were holding off until next season.

Oddly enough, selling was completely off my mind as of a week ago and I was 100% conmfortable with pursuing this next year. Now, since it's been dangled out there as an option, I am now on edge about this actually happening. I feel it's cruel (tounge in cheek) that I dont know if she will or wont be making an offer .................

 

[LostNFound]

I just want to throw one point in - we sold FSBO about a 6 months ago. We put a solid price we had to have to get out. We had an appraisal done before any contract was signed because the buyers parents said we shouldnt go into any sort of agreement without knowing what the house was worth. It appraised 9k below what we needed. It had to be explained to them that they'll now need 9k cash to get us out. If your buyer wont pay some extra cash that solid price you cant budge from may screw you up. Anything over appraisal - someone- buyer or seller - has to be paid in cash.

Personally I would never buy a home for more than its appraised for- no home is worth that to me. To them it was. However they hired another appraiser who knew what they were going to pay and what do you know- it appraised for what they needed it to.

The whole thing is a BS game - too many people are making too much money off you finding a suitable place to call home and for you to get out of your current abode. Research for yourself, find the answers. I highly recommend FSBO to save a LOT of money. Id never use a seller's agent again. I also would generally prefer to buy with a buyer's agent- but like most things in life- to each their own.

 

[SoMDGirl42]

I found a house that was FSBO. I did not have a buying agent, they didn't have a selling agent, but I did know a friend that is a real-estate agent that was willing to take a flat fee and do all the paperwork for both us. We split the fee and saved us each lots of cash. In return, I referred several friends to my real-estate friend when they were ready to buy and the real-estate friend made lots of money from my friends.

 

[Hannibal]

Well, looks like her previous offer on a foreclosure came through so we're back to our original plan. Was really ok with that before all this but now I gotta say, I am a touch disappointed that she didn't make us an offer. I guess since it was a strong reality, that it got my hopes up. Oh well. If nothing else, I got some projects done and we got most of the spring cleaning done ahead of schedule.

 

[somers]

Hi, I sold my house without a selling agent and saved some money on fees. I think a lot of agents are doing their job bad now, all they need is their commission on the sale. I know a history where an real estate agent lowered the price of a house intentionally in order to sell it faster. So, when I decided to sell my house I knew that I wouldn't be looking for an agent. I sold my house to this company https://www.thepropertybuyingcompany.co.uk/landers/sell-house-fast and I I want to say that the selling process was quickly and very profitable for me at the end.

 

[Monello]

Hi, I sold my house without a selling agent and saved some money on fees

Realtors, their motto should be "The 2nd Oldest Profession".

 

[BernieP]

Hi, I sold my house without a selling agent and saved some money on fees

are you a lawyer?
First, unless otherwise stated, the agent is always working for the seller. If the buyer is paying the agents fee, then the agent represents the buyer.
The first thing you then have to deal with is agents with buyers, who will want a fee for bringing you a client.
You are responsible for your advertising, and a whole lot of paperwork.
It can be done, there are actually "Sell By Owner" Kits. I think you get the help of a broker for closing.

 

[Scat]

are you a lawyer?
First, unless otherwise stated, the agent is always working for the seller. If the buyer is paying the agents fee, then the agent represents the buyer.
The first thing you then have to deal with is agents with buyers, who will want a fee for bringing you a client.
You are responsible for your advertising, and a whole lot of paperwork.
It can be done, there are actually "Sell By Owner" Kits. I think you get the help of a broker for closing.

The agent is always working for the agent. Wasnt that long ago that they called themselves ”sales agents” but I guess too many people associated that with “car sales” so now they are “real estate professionals” How many colleges offer a degree program in real estate sales?

 

[LightRoasted]

If I may ...

The agent is always working for the agent. Wasnt that long ago that they called themselves ”sales agents” but I guess too many people associated that with “car sales” so now they are “real estate professionals” How many colleges offer a degree program in real estate sales?

Actually? They are either a real estate "salesperson" as granted by the Maryland Real Estate Commission on their licence, or, a Real Estate Agent. If a salesperson is calling themselves a Real Estate Agent? It is because they are a member of the National Association of Realtors, NAR. Since the term, Real Estate Agent, is copyrighted by NAR. So, for one to be a "Real Estate Agent"? They must be a member of NAR to be able to say they are.

 

[LightRoasted]

If I may ...

are you a lawyer? First, unless otherwise stated, the agent is always working for the seller. If the buyer is paying the agents fee, then the agent represents the buyer. The first thing you then have to deal with is agents with buyers, who will want a fee for bringing you a client. You are responsible for your advertising, and a whole lot of paperwork. It can be done, there are actually "Sell By Owner" Kits. I think you get the help of a broker for closing.

Actually? For fact. If a seller is selling, "For sale by owner", and does not offer a commission to a buyer's agent, then it is up to the buyer, and the buyer's agent, to come to an agreement as to the agent's compensation to be paid by the buyer. So, if the buyer really wants the house, they, themselves, will have to pay the commission themselves to the buyers agent. Or whatever amount they settle as to a fair compensation for the agent/broker services.