Real estate question...

[A930Rocket]

We want to buy the house we’ve been renting instead of building another house for now. Our lease ends at the end of February.

It just went on the market, so there is an agent involved (3% commission), plus the rental property manager has a stipulation in the rental agreement that he gets a 3% commission if the renter buys the house.

If we wanted to work with the owner directly and possibly get a better deal by avoiding commissions, what is the time frame we would need to wait?

If we left the agent and the property manager in the mix, what would happen if we had an agent represent us? Would it be 3% to the property manager and 3% split between the buyers and sellers agents?

Thanks

[look 171]

Let me get this correctly. If you brought in your agent, then the total commission will be 9% because there's already selling agent? Screw that. Get after the selling agent and be done with it. Not sure if you can double end the deal as an agent in your state?

[KFC911]

Once listed with an agent, isn't it for 6 months? What are the odds of your house not selling (hot, hot, hot, market here), and avoiding the 6% already in place? No way would I add another 3% for "your agent" ... why do that?

If you really want the house.... do whatcha gotta do imo.

[LWJ]

Tag the front wall and burn hate symbols into the yard. Invite the homeless for long stay.

This starts the negotiations.

[stomachmonkey]

Unless the seller made a deal with the realtor for a different commission should the seller bring the buyer the realtor is getting their cut.

It all comes out of the sellers end although one could argue that it comes out of the buyers end as a higher price so the seller does not take the entire hit.

Were I the seller, I'd not entertain the suggestion of trying to bypass the commissions.

Only you know the price but think about it this way, property manager is getting their 3% no matter what.

You could ask the seller to screw the realtor but they are not going to do that and give you the full 3% break because they don't gain anything but hassle.

So if seller went for it you are looking at you saving 1.5% and seller making an extra 1.5%.

Is 1.5% of the sale worth the aggravation to either of you?

Wouldn't be to me.

As to the last part, if you bring an agent, property manager probably still gets their full 3% and sellers agent and yours split the other 3%.

[A930Rocket]

Originally Posted by stomachmonkey

...As to the last part, if you bring an agent, property manager probably still gets their full 3% and sellers agent and yours split the other 3%.

We don’t have an agent, but I question using the sellers agent to represent us fairly.

After talking to the owner tonight, I’m going to talk to his agent about buying it.

[wilnj]

The listing contract likely has a claw back stipulation that the seller should be wary of. After he agrees to a lower price with you, he is still exposed to paying the commission if the realtor can make the argument that their listing brought you to the table.

[fintstone]

I have done it both ways...but it depends on the state/area...because using the seller's agent is considered unethical in some places. They do represent the seller...so you are negotiating on your own. I recently purchased a home where I used another agent in the same agency, with the hope that they would both work toward a sale and might be willing to negotiate each of their respective commissions down if necessary to get a quick/solid sale without much pain (a win/win for both to make sure there was a sale). Of course, I knew exactly what I could/would pay...so their representation was really moot. All I needed was for them to present my offer and do the paperwork. It went quickly and quite well. I got my price because I recognized the seller's position and the market (and house) well...and was willing to accept what was wrong with the home (needed a roof and new flooring throughout). Since it was a great house/location, I was also willing to make a solid offer (I knew the deal they accepted before that fell through). The realtor provided any information I requested, but knew they were not selling me another house....so it well behooved them for me to buy it. I live on the other side of the country and the seller had long moved away and a previous offer had fallen through...so they were fairly eager...and I was ready to close quickly without contingencies. It was easy money for both agents...and buyer and seller came out quite well.

[look 171]

Originally Posted by A930Rocket

We don’t have an agent, but I question using the sellers agent to represent us fairly.

After talking to the owner tonight, I’m going to talk to his agent about buying it.

I would have done that yesterday. Good luck and let us know how it goes.

One ore thing. What do you think you really need represented by your own agent? You know the house and its quirks and shortcomings. You are also in the building business, so you know exactly what the house needs and negotiate from there. All agents wants is to close. He will do what he can for both parties and come to an agreement and close the deal. Its now a number's game unlike dealing with a brand new buyer that doesn't a thing about the house.

[drcoastline]

Originally Posted by A930Rocket

We want to buy the house we’ve been renting instead of building another house for now. Our lease ends at the end of February.

It just went on the market, so there is an agent involved (3% commission), plus the rental property manager has a stipulation in the rental agreement that he gets a 3% commission if the renter buys the house.

If we wanted to work with the owner directly and possibly get a better deal by avoiding commissions, what is the time frame we would need to wait?

If we left the agent and the property manager in the mix, what would happen if we had an agent represent us? Would it be 3% to the property manager and 3% split between the buyers and sellers agents?

Thanks

I am a RE Broker in NJ and every state operates a little differently but by and large the "rules" are the same.

I am a little confused by your question? Regarding the property manager, what exactly is the clause (in your lease I assume?) that the property manager gets 3% if the renter buys the house? Is the property manager a real estate company? Did the property manager originally bring you into the property? Is it the same property manager now as to when you took tenancy?

Typically the commission is set and that is what is paid by the seller if the house sells. If a buyers brings their own agent (the buyers agent) the commission is split between the agents. 1.5 to sellers agent, 1.5 to buyers agent (based on the information you posted) it depends on what is in the listing agreement how commission is paid. Commissions and listing times are negotiable and done before signing the listing agreement. But that doesn't mean commissions can't be renegotiated. There are cases when a buyer pays their agent separate or in addition to the commission. This is rare and probably not in this market.

You and the seller may also be able to claim that discussions for you to to buy the house were on going prior to the listing agreement being signed and therefore commission paid if you buy the house is excluded or maybe reduced.

There is also a thing called a transaction broker where you and the buyer come to agreement and the "transaction" broker simply does the paperwork. A transaction broker will often collect a reduced commission or a flat fee.

There is a bit more information needed to know exactly where you stand and what your options are. The first two things is you need to know better about the property manager clause and exactly the commission being paid by the seller.

Hope that helps?

[stomachmonkey]

Originally Posted by drcoastline

....Regarding the property manager, what exactly is the clause (in your lease I assume?) that the property manager gets 3% if the renter buys the house.....

I'm assuming it's to cover his losses from no longer managing the property.

Smart move on his part.

[greglepore]

The property manager isn't the listing agent? Hmmm. Not so bright on sellers part.

Not much to add to the info above. Any waiting period is set in the listing contract, but likely in this market the house will be sold by then if priced fairly.

[Z-man]

Remember: everything is negotiable - the commission comes out of the seller's profit, not your cost. If you feel he is adding these commissions on top of the asking price, you can lower your offer by 9%.

Offer a price that you feel is a good value of the home without breaking your bank.

Good luck!
-Z

[look 171]

Try and to negotiate the 3% out of the renter's agent. He's didn't have do anything but already got his money bringing you into renting the place. No paper work, no talking, nothing during this transaction. I question why he's getting pay for doing no work? YOu know that's coming out of you even though the seller is paying for it.

[look 171]

3% out of say, 400.000 is 12,000. That's a lot of money.

[fintstone]

As noted above, the buyer does not negotiate what either realtor gets paid. It is between the seller and the listing and buying agents. That said, a lesser commission will allow a seller to reduce the price ad get the same return. The buyer negotiates his best price knowing that one or both realtors may possibly take a lesser commission if price is a deal breaker (but by only a percent or two). I have had a buyers agent that took a flat fee of $500 (told me that is what they would do in advance) and after negotiating a best price (including their 3% commission), gave up all but that $500 of the $18,500 they would have gotten to sweeten my deal.

[look 171]

Originally Posted by fintstone

As noted above, the buyer does not negotiate what either realtor gets paid. It is between the seller and the listing and buying agents. That said, a lesser commission will allow a seller to reduce the price ad get the same return. The buyer negotiates his best price knowing that one or both realtors may possibly take a lesser commission if price is a deal breaker (but by only a percent or two). I have had a buyers agent that took a flat fee of $500 (told me that is what they would do in advance) and after negotiating a best price (including their 3% commission), gave up all but that $500 of the $18,500 they would have gotten to sweeten my deal.

They are no dummy. Lose the 500 bucks and close the deal. They will work it out between the two.

[A930Rocket]

Lots of calls today. We are not paying any commissions, as that comes out of the sellers pocket.

I don’t know why the seller picked an agent other than his property manager/agent friend, besides the fact they are dirt bags.

I don’t like to mix business with pleasure, but our neighbor is a realtor and given me advice. It was her I was thinking of bringing in to represent us. She originally sold the house to the seller.

I’ve made an offer and the seller has agreed to half the closing costs ($2500) and all HOA transfer fees ($2k). Just waiting to here back on everything.

[look 171]

Originally Posted by A930Rocket

Lots of calls today. We are not paying any commissions, as that comes out of the sellers pocket.

I don’t know why the seller picked an agent other than his property manager/agent friend, besides the fact they are dirt bags.

I don’t like to mix business with pleasure, but our neighbor is a realtor and given me advice. It was her I was thinking of bringing in to represent us. She originally sold the house to the seller.

I’ve made an offer and the seller has agreed to half the closing costs ($2500) and all HOA transfer fees ($2k). Just waiting to here back on everything.

Of course you aren't paying their commission, but that's factored into the sales price already. Good luck with the purchase. Let us know how it goes.

[Kraftwerk]

If it works out, think how much you will save a lot on moving costs! Good luck with the sale.