Rent or flip?

[GUCHI]

i don't understand why i would have to pay the 3% to the buyers agent when i had nothing to do with getting the agent. wouldn't that exspense be paid by the buyer, since the agent is representing the buyer ????

 

[malyla]

That's how the buyer's agent gets paid. I also resented 'giving' my money to pay for the buyer's agent but that is the way the system is set up. You can ask that no buyer's agent be involved or price the house so that the 3% is included.

Good Luck
M.

 

[wv-girl]

That's how the buyer's agent gets paid. I also resented 'giving' my money to pay for the buyer's agent but that is the way the system is set up. You can ask that no buyer's agent be involved or price the house so that the 3% is included.

Good Luck
M.

So true. I too resented sharing the wealth(mine) but they tell you that they won't show your house - or if you find the buyer yourself and they already have an agent - they will tell you that they will discourage the buyer from buying your house. They make it easy for the buyers to get in-- it's the getting out that bites.

 

[GUCHI]

that is so wrong !!! i feel like i'm being strong armed by the agent. i thought by selling on my own I would avoid any realtor fees, thanks for enlightening me. have you all flipped some in the past and are you still doing it ???

 

[offtrack]

"i don't understand why i would have to pay the 3% to the buyers agent when i had nothing to do with getting the agent. wouldn't that exspense be paid by the buyer, since the agent is representing the buyer ????"



To Clarify: You don't HAVE to pay buyer's agent by law. You would make an agreement to do this with the buyer's agent to order to move your house to his client in which case you should price your house accordingly, factoring the percentage. I sold one home offering a flat fee to the cobroker. I sold another with no cobroker. In what might be a slowing market in your area, I doubt you'll find many agents who will quibble over fee vs. % when they need a paycheck.I suggest you familiarize yourself with other properties that sold in the direct area of your house to get an idea of your houses's worth. Also factor the market trend in your area. Some markets are still on the upswing. Others are almost in freefall. Try and value your property realistically according to its desirability. Don't overjudge the value of your house.Then you can better judge whether it would profit you to actually use a broker. A desirable well priced house in a good market area would be worth FSBOing IMO. Change any one of the criteria and I'd use an agent. If I'm going to take a loss and the area rental market is strong I'd go that way. I'd also look at the potential of holding the financing in a market where credit mught be tightening. Sub-primers aren't all bad risk and will still be shut out if credit is tightened. You might be able to move the house and do someone a favor that otherwise would be shut out. Last give some thought to gimmicks. In a tightening market you might need to get creative to move that house.

 

[GUCHI]

offtrack
you brought up some very good points. a local realtor told me that the house market here in or area is selling homes. you mentioned gimmicks, we are considering having a realtors after hour to give them a chance to see the house and let them know we are willing to pay 2-3% for them to bring us a buyer. the house has only been completed for 3weeks now and we have had 1 open house the 1st week with a good turnout. can you offer any other gimmicks that might be useful ? i would rather not rent, since the profits from the sale would fund the next flip.

thanks

 

[offtrack]

I can't be much help. I'd check Zillow if they have info on your area to see the prices homes sold for in the immediate area. http://www.zillow.com/
I'd have a couple of the realtors come in and see where they'd price the house. I'd check the market trends in your area. Yahoo realty can give you a rough idea but you might want to probe further. http://realestate.yahoo.com
Also I'd check for any nearby foreclosures. They have a negative impact on values of nearby homes and need to be factored. I'd check to see if my house were priced in the ideal market range for majority of buyers in the area. For example in my market, houses valued between $130K and $180K are scarce while the market is bulging a bit with houses priced higher and lower and that is mainly because of what the the majority can readily afford based on the local economy. From all of the above I'd try to find an attractive value for the house.

But again IMO everything is dependent on the location and overall appeal of the home. Is it waterview or in a highly desirable neighborhood? Is your area attracting migrating buyers or losing them?
If prices were sharply dropping in my area I'd consider dumping unless my property were one that I thought would hold appeal through any overall market decline.

Getting back to gimmicks I can offer none that would help you in your immediate needs, except the standard where you would make the house as nice and homey looking as possible. I'm retired and computer savvy so my last three homes have been purchased because I bought them after initially seeing them and researching the area through the internet. http://www.realtor.com and I browse the homes listed frequently. Also hit http://www.realtytrac.com/ for foreclosure and bank owned info. I think they have a free trial.
Now what I meant by gimmicks was based on what might happen if the you think you might get stuck with your house. And that would range through anything from finding a nice family for a fair lease to own deal (not the gouging type) to giving a promising younger family member a head start by pricing the house below market and taking the loss.

 

[pyriel]

Good discussions. FSBO or for sale by owner does not have to pay for any commission fees. Yes, part of the closing cost might have to paid but that is an agreement that is made between buyer and seller. So, if you dont agree then you dont have to pay.

Agent working for the buyer must be paid by the buyer. Agent working for the seller must be paid by the seller. I can see some agent working for the buyer trying to strong arm the seller, telling them that they will not show the house to their potential buyer. If you agree to give up 3% then that is your perogative. If not, then you have no obligation to pay them at all unless you sign a contract with them.

Good luck people.

Pyriel

 

[GUCHI]

P
thanks for clarifying that question. at this point still FSBO, but don't want to waste time during this crucial selling period. thinking about listing with an agent.

 

[Snarg]

GUCI - Please let me know how it worked out. FSBO is something I was thinking about but it sounds like it may be more trouble then it is worth.

As far as renting goes, what type of liability am I looking at? What type of insurance should I look for? For a rental agreement, do you make up your own or are there pre-made ones I could use? Would it be wise to get the advice of a lawyer?

To further my education on this whole thing, I have been thinking of getting a few certifications. Please let me know if I would be wasting my time/money on any of these:

Home inspector. I thought of doing this for a couple reasons. It would help me when looking at potential purchases and I would not have to hire one when I go to buy. Also, I could use the certification to make a bit of money on the side.

Home apprasier. It would help me to set a realistic value on my home.

Realtor. It seemed like a good idea

Thank you for all the help and advice I have gotten so far.

 

[pyriel]

Many FSBO set unrealistic price when they sell their properties. Make sure you know the market before you do this. Setting unrealistic price will keep your property in the market for a long time and will cost you money in the long run.

Don't mess with insurance. Make sure you are insured (they are tax deductible). Get a regular insurance and add liability insurance with it if you are to have it rented.

Waste of money. Read books and do your homework. Practice makes perfect. I can now walk into a house and a have a ballpark estimate on how much it will cost me to renovate it. It took time but I learned from experience.

Home inspector. A must before you buy. I'd rather lose $500 and walk away out of a deal than to purchase a property that will cost ten of thousands of dollars to fix. This is also a good tool to bring to bargaining table to lower down the purchase price. Same principle when you are selling. It is better to know what to expect when the buyer tells you what is wrong with your property and try to low ball you.

Home apprasier. This is time sensitive and varies within different areas. Here in Guam, appraisal is good for six months. Dont waste your money unless you are ready to sell. Again, the goal here is to not set unrealistic price on your property.

Realtor. Whether they are good or not depends on the realtor. Some are aggressive and some are lame. If you do it yourself, find out where you can advertise and make sure it is noticeable. I see so many ads in newspaper with a 2 liner. This doesn't make sense to me. Putting up a sign in front of your property is not enough. Have an open house. Set the place up by fixing it up. You can even offer the buyer that if he/she works with you that you can both bypass the realotors and and give him/her the 3% discount (you keep the other 3%). Get noticed.

P

 

[Gilligan]

How much does a property manager cost you?

10% is the norm around here.

Should my wife and I decide on this direction, where would you recomend I start conducting research on things like landlord laws and anything else that pertains to rental properties...?

http://www.hud.gov/local/index.cfm?state=wa&topic=renting

http://www.atg.wa.gov/ConsumerIssues/Landlord-Tenant.aspx

 

[Gilligan]

I have done a couple of FSBO sales several years ago. On the last home that I sold, I waited until it was vacant and cleaned including steam cleaning the carpets. I placed a 2 foot by 3 foot “House For Sale” sign in the front yard with my phone number, I placed an info tube on the sign and filled it with fliers that I typed up. I also placed a full color flyer on the inside of the front window in case all of the flyers in the tube disappeared. I pulled back all the curtains so potential buyers could window shop. I placed a small classified ad in the homes for sale section of the local paper that said something like. “3/2 Brick, half acre lot, $75,000. 1234 Main st.” That’s all I put, I didn’t put the phone number because I had so many calls from my other FSBO asking the same questions over and over. I only placed the address in the ad so the buyers could drive by and see if they liked it or not. They could get my phone number off the sign or the flyer. Within a month after placing it for sale, I showed it about 4 times and sold it for $74,000 with the agreement that we would split the closing cost. A local title company handled the closing ( in some states its called a settlement) which cost us about $800 a piece. Now looking back on this now I wish that I would of held on to this house and rented it out, its probably worth about $150,000 today.

Now, one of the quickest closings I had was a foreclosure that I bought from an out of state bank. My wife and I paid cash for the house so the closing cost were very low, I think it was about $300 for our part. We only had to sign about 3 places and we spent less than 5 minutes in the title office.

I am not planning on selling anymore properties(doing the Birchtree buy and hold) but if I did sell a house, I would probably go ahead and list it with a realtor. As a real estate investor, I search the local paper, look for for sale signs, scan the real estate magazines, search the MLS and I even have a broker email me property listings that he knows fits my criteria, sometimes before they even appear on the MLS. One real estate co I know of charges $2,995 flat fee for listing and selling a property. Even though listing a property cost you 6%, it can be well worth it.