How does off-market deals work when presented by a REA?

Question

Hello,

I never bought an off-market deal. The agent is asking for a 3% commission. I did see it on the FSBO website.

Is that normal? How do those deals work?

Thank you,

Amir

Michael K Gallagher · Answer

@Amir B. you can structure it several ways, as a "net offer" where you the investor pay all commissions and closing costs and the offer is to the seller as a net number.  This is often the best chance to get the lowest number.  If you are instead interested in putting as little down as possible, I'd suggest structuring the commission as part of the selling price so that the seller is technically paying the commission but they still net the same amount.  It really depends on your preferences.

Amir B. · Answer

Okay thanks

Dwayne Poster · Answer

Sounds normal. If you use Realtor representation, you need to pay them something, and 3% is common.  These deals work like any other, except the listing agreement is replaced with a buyers agency agreement.

One thing as a heads up. It is very common for Realtors to seek an exclusive listing, to bring forth an offer in a FSBO scenario.  If you allow this, make sure your agency agreement adjusts the remuneration accordingly, as it will certainly affect the sellers final pricing.  I expressly prohibit my representatives from such action.