I have a potential buyer for my house. Do I need a realtor?
May 15, 2015 9:30 AM Subscribe
After a couple of meetings and tours of my house, a neighbor's sister is going to be making an offer on my house later tonight (via a scheduled phone call). I don't have a realtor, because I am just in the beginning stages of putting the house on the market.
I am very happy that I might not need to pay a realtor's commission! But am I making a mistake in not having one? I am fine with the amount I'd be selling it for (the potential buyer knows what I paid for it, and I am asking just a bit more than that). If I "trust my gut" in the subsequent negotiations, will I be ok? I know what my payoff amount is for my mortgage, but is there anything I'm forgetting? Also: The potential buyer will be paying cash, but I don't think that would make a difference to me... does it?
I am very happy that I might not need to pay a realtor's commission! But am I making a mistake in not having one? I am fine with the amount I'd be selling it for (the potential buyer knows what I paid for it, and I am asking just a bit more than that). If I "trust my gut" in the subsequent negotiations, will I be ok? I know what my payoff amount is for my mortgage, but is there anything I'm forgetting? Also: The potential buyer will be paying cash, but I don't think that would make a difference to me... does it?
Once you have a found a buyer and agreed on a price the things that you have to worry about are
- the actual purchase contract
- making sure you do the right disclosures
- make sure you comply with any state or local regulations that have to be done on sale - for example, for one house we bought in California, the seller had to attest that all toilets were low-flow toilets (and to upgrade if they weren't)
- arranging with the buyer for inspections, release of contingencies
Also, you are really familiar with the value of the house? Just because you are happy with the return on the investment, doesn't mean that you aren't leaving a lot of money on the table. On the other hand, if there are lots of similar houses in the neighborhood so you have a good sense of comparables, this may be fine.
Where I live, closing are done by the title company and most people don't use real estate attorneys so we rely on the agent for this stuff. Your market may be different. Twice, as the buyer, I found the house I wanted on my own but still used a real estate agent help with the actual purchase. In both cases, the agent took a lower commission because there was much less work involved. Another option is look at closing services by people who support FSBO (for sale by owner). Again, an attorney may be able to do all of this, so local advice might help.
posted by metahawk at 10:04 AM on May 15, 2015
- the actual purchase contract
- making sure you do the right disclosures
- make sure you comply with any state or local regulations that have to be done on sale - for example, for one house we bought in California, the seller had to attest that all toilets were low-flow toilets (and to upgrade if they weren't)
- arranging with the buyer for inspections, release of contingencies
Also, you are really familiar with the value of the house? Just because you are happy with the return on the investment, doesn't mean that you aren't leaving a lot of money on the table. On the other hand, if there are lots of similar houses in the neighborhood so you have a good sense of comparables, this may be fine.
Where I live, closing are done by the title company and most people don't use real estate attorneys so we rely on the agent for this stuff. Your market may be different. Twice, as the buyer, I found the house I wanted on my own but still used a real estate agent help with the actual purchase. In both cases, the agent took a lower commission because there was much less work involved. Another option is look at closing services by people who support FSBO (for sale by owner). Again, an attorney may be able to do all of this, so local advice might help.
posted by metahawk at 10:04 AM on May 15, 2015
I've heard of people hiring realtors for pretty low flat-fee amounts in situations like this who were happy and thought it was the right choice for them. You might want to hunt around and see if you can get some expert help from a realtor and/or an attorney at a price that seems reasonable to you (which will and should be far less than your standard realtor commission.)
posted by EmilyClimbs at 10:09 AM on May 15, 2015 [1 favorite]
posted by EmilyClimbs at 10:09 AM on May 15, 2015 [1 favorite]
Seconding Dragonness. Save yourself the commission of a realtor and engage the services of a lawyer. They should cost a fraction of the realtor fee and will be able to whip up a contract and get you through the hoops with no trouble.
In Illinois, realtor feels are often 5%. So if you have a house that's $200K, you will pay them $10,000. By contrast (around here at least), a real estate lawyer typically does a flat fee arrangement that rarely exceeds $1500.
posted by AgentRocket at 10:09 AM on May 15, 2015 [1 favorite]
In Illinois, realtor feels are often 5%. So if you have a house that's $200K, you will pay them $10,000. By contrast (around here at least), a real estate lawyer typically does a flat fee arrangement that rarely exceeds $1500.
posted by AgentRocket at 10:09 AM on May 15, 2015 [1 favorite]
You don't need a realtor, especially if you know that you are getting a fair price. However, as metahawk noted, from your question I can't tell if you know the value. You mention how the offer compares to your purchase price and that it's above your mortgage payoff amount, but neither of those really tells you about the market value. Unless you've been tracking prices closely or bought very recently in a market with stable prices, you should get an appraisal; they typically run around $300 or so.
posted by Mr.Know-it-some at 10:21 AM on May 15, 2015 [2 favorites]
posted by Mr.Know-it-some at 10:21 AM on May 15, 2015 [2 favorites]
If the buyer gets an agent, I'd definitely recommend that you get one too. I personally would get one myself, because as a lawyer, I've seen what can go wrong with a major transaction involving lots of money, land, personal feelings, and legal matters. Especially if there is any kind of personal relationship between you and the buyer (or her siblings) it's incredibly useful to have someone there looking at things from a stance that's not colored by personal feelings. The downside of getting an agent is the specific dollar amount you pay. The downside of not getting one is potentially (but not probably) many times that and oodles of hassles and pain. And having a professional guide you through this transaction is good in the sense that it is less work for you, and they know what they're doing.
Places where things can go wrong (just in case you're wondering):
- Making false representations about the house/land (even if you don't know about the problems)
- Not complying with code, environmental laws, etc. (even if you don't know what those are)
- Damage, loss or injury to the house or the buyer during inspections
- Improper sales price
Best of luck whatever you choose to do.
posted by Capri at 10:22 AM on May 15, 2015 [1 favorite]
Places where things can go wrong (just in case you're wondering):
- Making false representations about the house/land (even if you don't know about the problems)
- Not complying with code, environmental laws, etc. (even if you don't know what those are)
- Damage, loss or injury to the house or the buyer during inspections
- Improper sales price
Best of luck whatever you choose to do.
posted by Capri at 10:22 AM on May 15, 2015 [1 favorite]
You're going to need a lawyer anyway. When our lawyer handled our no-agent transaction he charged us an extra $250 to write the contract and look a little more closely at things. Did not miss the agent at all. Especially did not miss paying an extra $1X,000.
posted by the christopher hundreds at 11:17 AM on May 15, 2015
posted by the christopher hundreds at 11:17 AM on May 15, 2015
Response by poster: I live in a very unique house with no true comparables, but other places in my neighborhood have gone for similar prices. I just emailed a realtor (yet another neighbor) for his rec's for a real estate lawyer and to ask if he'd help (and what that help would be) for a flat fee. Thanks, everyone.
posted by chowflap at 12:25 PM on May 15, 2015
posted by chowflap at 12:25 PM on May 15, 2015
Response by poster: Update: I found a lawyer (via recommendation) and he is leading me through the process. Thanks.
posted by chowflap at 12:15 PM on June 16, 2015 [1 favorite]
posted by chowflap at 12:15 PM on June 16, 2015 [1 favorite]
This thread is closed to new comments.
posted by Dragonness at 9:34 AM on May 15, 2015 [1 favorite]