Best practices for private sale of a condominium
April 4, 2022 10:45 AM Subscribe
I inherited a condominium in a major US coastal city that I want to sell as quickly and painlessly as possible. I have already contacted a real estate agent and had some preliminary discussions about the property, but haven't signed an agreement or moved ahead with listing the condo in any way. After talking to the agent, I was contacted by someone who might be interested in purchasing the condo as a private sale and avoiding paying commissions. What is the best way to proceed?
I'm primarily interested in how to best manage the relationship with the real estate agent. Although the interested party is legit, the likelihood of the private sale happening is probably low, so I don't want to burn any bridges with the agent. Should I inform them of the fact that someone is interested in a private sale? Do I go ahead with staging and listing the property? What obligations (financial and ethical) do I have toward the real estate agent regarding the possibility of the private sale? Is it possible to pay the agent a (much lower) flat fee to help with the private sale? I've bought and sold a few houses but never been in a situation like this before, and any advice would be welcome.
I'm primarily interested in how to best manage the relationship with the real estate agent. Although the interested party is legit, the likelihood of the private sale happening is probably low, so I don't want to burn any bridges with the agent. Should I inform them of the fact that someone is interested in a private sale? Do I go ahead with staging and listing the property? What obligations (financial and ethical) do I have toward the real estate agent regarding the possibility of the private sale? Is it possible to pay the agent a (much lower) flat fee to help with the private sale? I've bought and sold a few houses but never been in a situation like this before, and any advice would be welcome.
Until you sign a contract with the agent, you have no legal obligation and I don't think any ethical obligation. You may be able to pay the agent a flat fee, but many are not willing to do so. (I've heard that some agents affiliated large companies are not allowed to lower their fees.) I bought and several years later sold a condo without an agent; each time, a real estate lawyer handled all the necessary paperwork for a very low fixed fee. There are also many low-fee agents (such as Redfin, which advertises a 1.5 percent fee, though if the buyer has an agent, that agent will also charge a fee.)
posted by Mr.Know-it-some at 11:17 AM on April 4, 2022 [2 favorites]
posted by Mr.Know-it-some at 11:17 AM on April 4, 2022 [2 favorites]
I did an open house FSBO two weekends before I listed with a broker. There were three people that saw the house and came for a second visit. I put in the contract with the broker that if I sold to these three, their commission was zero. They signed willingly. (Turns out I sold to a person who saw the house with me then did not follow up until 4 weeks later and they paid $50,000 higher than what I listed it at FSBO. They could have save money. I would have been actually a little worse off. Whatever.)
I would show the condo to the interested party. If they have a real interest tell them to negotiate now or it will be listed in a week. Give them a cut of what you would have paid the broker by a reduced price. If an agreement is reached, have a real estate lawyer handle the closing. No agent needed. Or, as suggested above, negotiate a fee with the agent to work towards the close.
posted by JohnnyGunn at 11:51 AM on April 4, 2022
I would show the condo to the interested party. If they have a real interest tell them to negotiate now or it will be listed in a week. Give them a cut of what you would have paid the broker by a reduced price. If an agreement is reached, have a real estate lawyer handle the closing. No agent needed. Or, as suggested above, negotiate a fee with the agent to work towards the close.
posted by JohnnyGunn at 11:51 AM on April 4, 2022
Give them a cut of what you would have paid the broker by a reduced price.
I disagree: If you like their offer, then take it. Unless you for some reason want to give them money, there's no reason to give them a rebate. But when you are evaluating their offer, consider not only the time and effort and risk of putting it on the market, but also that you'd have to pay an agent. In this situation, most buyers will understand that you'd prefer to sell directly and will take that into account (e.g., low-ball it slightly) when coming up with an offer, so they are already effectively taking a cut.
posted by Mr.Know-it-some at 12:37 PM on April 4, 2022 [3 favorites]
I disagree: If you like their offer, then take it. Unless you for some reason want to give them money, there's no reason to give them a rebate. But when you are evaluating their offer, consider not only the time and effort and risk of putting it on the market, but also that you'd have to pay an agent. In this situation, most buyers will understand that you'd prefer to sell directly and will take that into account (e.g., low-ball it slightly) when coming up with an offer, so they are already effectively taking a cut.
posted by Mr.Know-it-some at 12:37 PM on April 4, 2022 [3 favorites]
No one here is going to be able to give you perfect advice because this is a classic time/hassle vs money tradeoff.
If it were me I'd probably do something like what JohnnyGunn says and write this person's name (or several people) into a contract, and if they buy it the agent's commission in that case is 1.5% or 2%, not to be split with any buy-side broker. That splits the hassle and money a bit, and if the private sale ends up going through everyone is a bit better off than they would be otherwise.
Also, as a side note someone I know in a similar situation got an off-market offer that included the provision that the seller could take whatever personal goods they wanted out of the apartment as normal, but that the buyer would deal with whatever they left behind. That might be of interest to you - or other things of that nature might - but everything can be negotiated, even more so in an off market sale.
posted by true at 2:15 PM on April 4, 2022
If it were me I'd probably do something like what JohnnyGunn says and write this person's name (or several people) into a contract, and if they buy it the agent's commission in that case is 1.5% or 2%, not to be split with any buy-side broker. That splits the hassle and money a bit, and if the private sale ends up going through everyone is a bit better off than they would be otherwise.
Also, as a side note someone I know in a similar situation got an off-market offer that included the provision that the seller could take whatever personal goods they wanted out of the apartment as normal, but that the buyer would deal with whatever they left behind. That might be of interest to you - or other things of that nature might - but everything can be negotiated, even more so in an off market sale.
posted by true at 2:15 PM on April 4, 2022
Do I go ahead with staging and listing the property?
I'm in a not-entirely-different situation right now. Assuming the market is hot in this location, I wouldn't stage it at all and just skip that entire part of the equation (and get an agent who agrees to this) just in terms of hassle/cost factor.
I would tease out whether this private sale person is not only willing to buy but able to buy and, if not, sign with the agent after that point. Or let the agent know that this is a before-them person and write that into the contract.
But I agree with others, you only kind of need an agent in this scenario with websites like Redfin and the like. That said, they will sometimes deal with a lot of the hassle so can be worth it (in which case just pay the money and don't agonize over it).
I went with an agent because I wanted them to handle some of the hassle of showing the place and dealing with all the parts of selling a house in an area where I do not live. Jokes on me, she only sort of cares and me and my sister have to tell her stuff over email over and over which I do not love. So make sure you have an agent who wants to do this your way, there are a ton of agents, it's a hot market and a place that is in decent shape in a major metro area should really mostly sell itself.
posted by jessamyn at 2:25 PM on April 4, 2022
I'm in a not-entirely-different situation right now. Assuming the market is hot in this location, I wouldn't stage it at all and just skip that entire part of the equation (and get an agent who agrees to this) just in terms of hassle/cost factor.
I would tease out whether this private sale person is not only willing to buy but able to buy and, if not, sign with the agent after that point. Or let the agent know that this is a before-them person and write that into the contract.
But I agree with others, you only kind of need an agent in this scenario with websites like Redfin and the like. That said, they will sometimes deal with a lot of the hassle so can be worth it (in which case just pay the money and don't agonize over it).
I went with an agent because I wanted them to handle some of the hassle of showing the place and dealing with all the parts of selling a house in an area where I do not live. Jokes on me, she only sort of cares and me and my sister have to tell her stuff over email over and over which I do not love. So make sure you have an agent who wants to do this your way, there are a ton of agents, it's a hot market and a place that is in decent shape in a major metro area should really mostly sell itself.
posted by jessamyn at 2:25 PM on April 4, 2022
I’ve sold two homes as is in S FL as FSBO & Zillow, the last in 2021. I put up a listing on Zillow and a sign in the yard. Both closed within 2-3 weeks to people who were drive-bys. (TBH, Zillow got me a ton of calls from realtors and scammers who wanted to buy with me taking back a mortgage but few solid leads.) I would tell the realtors when they called that they were welcome to show the property, but their fee was a matter between them and their client. Be sure to state the sale is “as-is” and the buyer is responsible for all closing costs. We closed with my atty who did all the escrow, title search, and title insurance for a few hundred dollar fee. I did have several agents visit and give me a pitch, mainly to get their market analyses to help set the price.
Some condo associations will have a web site or local board to post for sale offers. Zillow has about 3-4 times as many views as realtor.com. I’d blow the realtor off, but I had many who would offer 2% and accept 1% when slightly pushed.
posted by sudogeek at 3:13 PM on April 4, 2022
Some condo associations will have a web site or local board to post for sale offers. Zillow has about 3-4 times as many views as realtor.com. I’d blow the realtor off, but I had many who would offer 2% and accept 1% when slightly pushed.
posted by sudogeek at 3:13 PM on April 4, 2022
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I personally have no problem asking the agent to take 2% as you are under no obligation to continue with the agent, but is mainly doing so by goodwill, and you also save a lot of the headache. The other side should not object to a 2% commission (he's already saving 3% by going with no agent on his own side). (Maybe negotiate up to 2.5%, if the other side concurs, as the agent had to split the fee with his/her broker)
Completely IMHO, of course.
posted by kschang at 11:09 AM on April 4, 2022