While looking at the Member bulletin board on our WARDEX data exchange (think MLS), I noticed that a seller is now offering a whopin' 10% co-broke (the commission amount to a buyers broker for bringing in a buyer that is ready willing and able to purchase the property).
I'm not going to share a ton of details on the property other than to say it is a single family home in an area of town where many other improved properties are of the factory built kind (think mobile home). The asking price is now $150,000 for this particular listing.
I only bring this up because it fits nicely with my own buyers flat fee program I have started. I want to use this particular listing as an example to see how one of my clients could benefit from using my service.
As I explained before my buyers flat fee program is $4,000. If you were thinking of purchasing this property for $150,000 with most any other agent, your representative's broker would be receiving a $15,000 check to disburse with your agent under their agreement (I'm a 100% agent which means I only pay a low brokerage fee to my broker and errors and omissions insurance, other agents split their commission with their brokers on a percentage scale).
Again, this 'would be' $15,000 payday (for me) is a rather nice offer by the seller... but this is your money and wouldn't you like to know what you are paying for?? Sure you would see the commission amount on the closing documents but normally after you have agreed to the price terms with the seller. Ask your agent about disclosing the commission the next time you are in the market to purchase property... before you write a contract. It is your money (and I just can't say that enough).
Now lets look at his as if you had hired me to represent you to acquire this particular property. Before writing the contract you and I would have entered into a contract with each other. One that states that I will be representing you for the agreed amount of $4,000 to act as your agent to the purpose of buying a property.
We then would write the contract to the seller. Maybe we low ball the offer some more, lets make the offer $140,000. I present the offer to the sellers agent. The seller agrees to our terms. The co-broke commission would equal $14,000. Our agreement stated that my broker is to be paid $4,000, which leaves $10,000 on the table. We must disclose our agreement to the title and escrow company and to your lender (if you need one). There would be instructions to use the $10,000 as part of the down payment (if your lender would allow it) which would lower the amount borrowed and reduce the monthly mortgage payment to your benefit.
Or, we could amend the contract to lower the price of the home to $130,000 if the seller and the listing broker would agree to conditions that state the listing broker would pay the buyers broker (think me) $4,000 in return for the lower final sales price. I don't see why the seller wouldn't agree to this, but there may be a question as to whether the listing broker would because if their commission was based on percentage of the sale, it would mean reducing their commission (probably in the neighborhood of $250 to $300).
Now if you are out there thinking that the extra $10,000 would get you over the top for a better financing product and want to know more about this opportunity contact me right away. I'll send you the property information. I'm assuming that many local agents have seen this same offer and plan to make every effort to sell this property to one of their clients for the big payday (heck, I don't blame them really).
Basically the sellers have told me (without actually talking to me) that they are willing to help the buyer... buy the property with up to $11,000 for you to use as you want... if you hire the right buyers representative... that is.
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