How to structure an off market deal

Question

My friend owns a condo that he wants to sell between now and September. His current tenants lease ends in September so he wants to try to sell it off market first and if he doesn't get an offer he likes he will list on MLS as we get closer to September. I have my real estate license and have done a handful of deals over the past two years but have never done an off market deal. He would like me to help him sell it off market. Understanding that commissions are 100% negotiable in every situation I'm curious if anyone can suggest a good starting point? Is it reasonable to ask the seller to pay a total of 2%? 1% going to the buyers agent and 1% going to me. Is there a better way to structure off market commissions?

Thanks in advance for the help.

Patrick Drury · Answer

@Ed DerenTake whatever the seller is trying to net and add 6% (average commission in Columbus, OH) or the average commission amount on top. Then lastly, never negotiate the commission. It's a non-negotiable item, but the purchase price is though. Almost everything I do is off-market.

Joshua Janus · Answer

Make sure you talk to your friend and get a number that he wants to have when everything is said and done. Then add 6% on top of that for 3/3 split.

Patrick Drury · Answer

@Ed Deren   If I didn't elaborate enough the commission would be split just like any other real estate deal amongst both agents or go to one if you dual repped the transaction. Wanted to clarify.

Chase Busick · Answer

@Joe Miller Very true, a good agent is worth the commission. Granted if you are doing bulk business with someone can then start to consider. But typically most are still ok with the flat/normal commission!

Chase Busick · Answer

@Ed Deren That's great that you are willing to help him. Honestly, if he is looking to sell - the best way will most likely be through y'alls MLS that way it can be publicly marketed to all of the potential buyer's within your area versus limiting exposure(eyes) off market. Assuming that y'alls market is very hot rn, it may be in their best interest to list it in order to maximize multiple and highest potential offers.

For commission or your side is totally up to you and how you want to work that out with your friend. For the buyer's agent side, I would highly recommend asking your broker if y'all have a set minimum that they prefer you to pay or if they don't care since it is negotiable. Typically it is best to consider the buyer's agent side otherwise they would have to work out a commission with the buyer (and this may turn away some). This can be totally possible though with the market to structure the deal where the buyer has to pay their side of the commission for their agent. Overall there are a ton of options.

Dwayne Poster · Answer

This really makes little sense, unless 'your friend' is going to list with another agent. Get out and hustle a buyer and bring them in on an exclusive listing, negotiating your comm based on offer value. Other wise take the listing to MLS at market comm rates.

Joe Miller · Answer

Are you considering a pocket listing? I just closed my first pocket listing this past weekend and it was a phenomenal experience.

Account Closed , I think that his advice is stellar. It is absolutely in his best interest to list with an agent. He needs to get his listing in front of as many qualified buyers as possible.

I do not ever negotiate my commission. You are worth it. You got this!

How to structure an off market deal

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