All Forum Posts by: Eric P.

I've seen a few of these.  I'm in the research stages of becoming a real estate investor.  There's a town near where I grew up that I'm most interested in.  Its a less designable area because of the schools, but is overall safe.  Housing is very affordable and makes me comfortable to start there.  But I keep seeing houses that "need work" but still shouldn't only cost $50-75k.  $100k seems fair.. these listings will be up for 2 weeks then they are just gone, no off the market, or any trace of them at all.  This is in NJ, I have to imagine they are similar scams.

Anyone have some crow I could eat?  

Negotiations went how I hoped.  We got down where we were hoping and did get an extra $6,000 toward closing so that is great.  I can't be 100% sure if that had anything to do with not using an agent or if they were just willing to come down that low, but either way I'm happy with it.  

With that said..  Buying a house is stressful, the agent is being very helpful but at the end of the day I feel like hes working for the seller and I don't really have anyone on my side.  Its really a toss up, but I can totally see how agents add value.  maybe not $12,000 worth of value on a home I found on my own.. but value just the same.  

I research like crazy and like to know as much information as possible, there is still a ton I don't know so I rely on the selling agent and my lawyer but wish I was enjoying the process a bit more..  

Now I just need mortgage rates to chill out!  3.6% when I started looking, I'll be lucky to lock 4.1% now.

Hope this thread helps someone else make a decision!

Sorry I don't want it to sound like I'm being thick headed.  But c'mon nothing in this world is free.  As the buyer, my agents commission would have been figured into the sales price.  Just like when you buy something with "free shipping" someone is paying for that shipping, and its usually YOU paying an elevated price on the product.  

I 100% agree that my thought here wouldn't work if there were other offers on the table or this was a new listing.  But as I'm looking now, the home was first listed for sale August of last year, listing was removed first of this year and added back on a month later.  So really this has been on the market for 8 months.  Which is why I think this particular situation would work and benefit everyone without bringing in a 4th party to take $12,000 of "someone's" money.

 The property has been on the market 120 days with no offers and they are "motivated sellers".  Everyone is winning..  The sellers are selling their home finally yes not at the price they want but it's been 4 months with no offers, the agent is making more than he would if I was using an agent, and I'm saving $..  Why bring in another person to get in the way of that?  

And nothing is "free". Youre paying for an agents commission on the back end.  

The buying agents commission would be like $12,000 so what if we all just split that?  

Does my logic not make sense?

It benefits him if hes keeping a large portion. 

Example:

1) Me asking $395k and $8000 in closing @6% commision = $24,000 in commission minus $8,000 closing cost = $16,000 profit for listing agent.

2) Buyer 2 asking $415k and no closing costs but using a buying realtor only keeps half commission = $12,500 profit for listing agent.

So by going with my offer $20,000 lower and offering $8,000 toward closing the listing agent is still walking away with $3,500 more than if someone offered $415k through an agent.

Can the listing agent not step in and say "I'm going to be making an extra $14,000 commission on this, so I guess I can cut my commission a bit to cover the $6,000 closing cost and still walk away $8,000 ahead".  Or at the very least wouldn't it give the listing agent motivation to talk his sellers into taking my offer right now.  

Wife and I are ready to put an offer on a home we are in love with.  We've been watching the market for months and this home fits our needs the best.  The home has been on the market over 100 days, has "motivated sellers", no offers yet, and I'm using a family member real estate attorney and foregoing the buyers side agent.  This should save the seller $12k-$14k worth of buyer side commission which should allow me to ask for a lower price.  Any additional suggestions?

quick property info:  asking $425k.  Could use new siding above the garage and one or 2 other areas (maybe whole house).  A similar house in the neighborhood was just price dropped to $415k.  The home next door sold 2 years ago for $395k and is extremely comparable. 

I'm saying a fair value is about $405,00 based on the similar properties.  I'd want $10k off for the siding and a few other little things, then about $8,000 for closing costs from the commissions savings.  So $395,000 and $8,000 in closing sound fair?  Should I start a little lower so I leave myself more room to come up or is that too aggressive?

Any suggestions would be great!

I'm likely going to try and use a real estate attorney to put a low offer in on a house I like.  The listing agent wont need to split his commission so there will be a real motivation for him to convince his client to take my lower offer.  Like you said, on a $400,000 home thats $12,000 the listing agent will get to pocket, so I should be his best friend.  The real estate attorney will help me with everything else I need for about $2,000.  If that helps me knock an extra $25,000 off the listing price its well worth it.   

I think this only works if: 1) you already found the house you like.  2) The seller is motivated.  3) The house has been on the market for a little while 3+ months.  4) You are currently the only person making an offer.  5) The price of the house needs to be high enough for the commission savings to be worth it $400k+.

 It would become mine.