All Forum Posts by: Lori Hunter

@Account Closed No, I haven't run the comps. I have no idea yet what we plan to offer. I just used that number for the sake of the discussion and to make a point about the different (and less obvious) sides of this scenario.

I realize finding the comps is our next step, but Im still unsure as to wether working with a buyers agent is necessary or even in our best interest.

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@Account Closed

Joe,

A listing agent is working for his money too! If he was getting the entire 6% commission, why wouldn't he suggest the sellers accept an offer of (hypothetically) 25K when he would be making a higher commission than if he sold it at full asking price working with another realtor? Especially if it moves the property, pays him, and doesn't sit there through another winter. I would!

I'm just looking at things from a different angle.

Here is an interesting exert from the book Freakonomics that apparently examines this scenario as well...

Before plunging into the data, it helps to ask a question: what is the real-estate agent's incentive when she is selling her own home? Simple: to make the best deal possible. Presumably this is also your incentive when you are selling your home. And so your incentive and the real-estate agent's incentive would seem to be nicely aligned. Her commission, after all, is based on the sale price. But as incentives go, commissions are tricky. First of all, a 6 percent real-estate commission is typically split between the seller's agent and the buyer's. Each agent then kicks back roughly half of her take to the agency. Which means that only 1.5 percent of the purchase price goes directly into your agent's pocket. So on the sale of your $300,000 house, her personal take of $18,000 of commission os $4,500. Still not bad, you say. But what if the house was actually worth more than $300,000? What if, with a little more effort and patience and a few more newspaper ads, she could have sold it for $310,000? After the commission, that puts an additional $9,400 while she earns only $150, maybe your incentives aren't aligned after all. (Especially when she's the one paying for the ads and doing all the work.) Is the agent willing to put out all the extra time, money, and energy for just $150? There's only one way to find out: measure the difference between the sales data for houses that belong to real-estate agents themselves and the houses they sold on behalf of clients. Using the data from the sales of those 100,000 Chicago homes, and controlling for any number of variables---location, age and quality of the house, aesthetics, whether or not the property was an investment, and so on---it turns out that a real-estate agent keeps her own home on the market an average of ten days longer and sells it for an extra 3-plus percent, or $10,000 on a $300,000 house. When she sells her own house, an agent holds out for the best offer; when she sells yours, she encourages you to take the first decent offer that comes along. Like a stockbroker churning commissions, she wants to make deals and make them fast. Why not? Her share of a better offer---$150---is too puny an incentive to encourage her to do otherwise.

From Exerpt from Freakonomics book regarding real estate agents. - InterNACHI Inspection Forum http://www.nachi.org/forum/f11/exerpt-freakonomics-book-regarding-real-estate-agents-57929/#ixzz2h5GRH9kf

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Ok, I have a question I could use some opinions on. The lot joining a house we own is being offered for sale at 39K and is .19 acres. It has been on the market for 200 days and we are ready to make an offer. We do not currently have a real estate agent.

My question is... should I make my offer through the listing agent or find a realtor? I have been running some numbers and believe it may be more advantageous to use the listing agent. Here is why...

Assuming the agent's commission is 6%, if the property sold at 37K and he had to split the commission he would make approx $1,110.00.

If he took all 6% as the only agent and the price was negotiated to 25K, he would make $1,500.00.

Don't you think he would encourage the seller to take a lower price knowing that it would still be in his best interest?

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Thanks for posting this! Good to know:)

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Hi @Pat L. Fortunately we don't have HOA's where our house is. We are in a very convenient location, 1 block from the main Ave, 3 blocks from the busiest part of downtown and 1 mile from the beach in Delray. We also have a free downtown golf cart that will pick you up at your door and take anywhere within about a mile radius (beach, restaurants, post office, grocery store, etc). We were looking to post on VRBO, HomeAway, AirBnB... We are open to any advice from those with experience, but are really hoping to connect with someone local to share there experiences with us.

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Thanks @Ken Rishel for all the advice. I realized a LOT has changed. We are definitely trying to get into this way too late in the game. I know there are way less involved ways of moving forward with investing. We have explored this option very thoroughly, read as much from knowledgeable people as we can, asked tons of questions. We are moving forward, but we are carving our own way now. Many thanks again for taking the time to share your knowledge:)

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Does anyone on here have a property they rent as a vacation rental in the southeast Florida area? (Delray Beach, Boynton, West Palm, Pompano, Deerfield, Boca Raton...)

We would love to talk with someone that has experience with this in our area...especially regarding ordinances, vacancy rate, rental rates, managing, etc.

Thanks!

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Yes @Ramon Jenkins . We are learning so much here! Thank you!

Good for you @Jonas Eddy ! I know it helps to have family support. Definitely keep us updated on your networking group. It sounds like a great idea and we are certainly interested.

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Hi @Jonas Eddy

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All Forum Posts by: Lori Hunter

Lori Hunter has started 14 posts and replied 52 times.

Post: Better deal if using sellers agent?

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