OT: q for real estate agent

[rcnute]

We're looking for a new house and are using the agent who helped us find our current place. Good guy, knows his stuff and is very helpful.

Turns out our neighbor wants to buy our house and we'll probably rent it back for a bit until we find a new place to buy (or rent for awhile as the market is not buyer friendly now around Seattle).

Should I use our agent to help with the sale (or suggest a reduced commission since he didn't need to market the place/find us a buyer)? This is not my area of expertise. Thanks for any ideas.

Ryan

[azrider]

Should I use our agent to help with the sale

We didn't.

We found our own buyers and they're doing a 1030 exchange on place we're selling. We've done everything ourselves as far as paperwork and are saving a HUGE (to me) chunk of change in the process.

[MattTuck]

You should still hire an attorney to make sure that everything is in order.

[yngpunk]

You should still hire an attorney to make sure that everything is in order.

Agree with Matt here. Even if you are using an agent, you should still hire an attorney.

Also, you don't "need" a real estate agent to sell your house...find a good real estate attorney and he will likely have the "standard" sales and lease contracts available and can write up and review the contract for you as well as guide you through the sale/closing process.

I understand that appeal of using a real estate agent, esp. if you are seeking to market your house, but if you already have a ready and willing buyer in your neighbor, hire an attorney. If this sale doesn't go through, you can then always use a real estate agent

[Nooch]

assuming you're under no obligation to him for listing the house, as you said he's helping with the purchase of the next, you're in the clear.

there's certainly the possibility that he'll be offended, but you've found the buyer, and come to terms -- you need an attorney. There's no sense in listing the house in order for your neighbors to buy it.

it just works out to be good luck for you, bad luck for him.

[gngroup]

Hire an attorney and/or ask the agent if he'd like to represent you for a fractional fee. It is always nice to have a legal buffer (ie. the Real Estate Brokerage) between you and the buyer/seller. Definitely don't do the paperwork yourself. Saving money on this is not nearly as important as protecting yourself from future legal issues (even if that may seem unlikely).

[avalonracing]

I'm an agent and I wouldn't go it alone. As others have said either use the agent (a fee reduction as he doesn't have to market it might be in order) or a real estate attorney. I will say that things can go south quickly, even with friends, and you might want an intermediary if they do.

Likewise, in this market I would make sure that you offered your house on the open market, you don't want to undersell it. If you are concerned about that you can always pay a few hundred to get your own appraisal to set the price.

[notsew]

The seattle real estate market is bonkers right now, I'd be worried I was leaving money on the table making a deal out of the market. I'm sure you've considered that though.

One more vote for the lawyer approach.

[stephenmarklay]

Man each of these responses are great and I could have said the same thing myself. I have sold real estate for about 12 years and I am impressed by the comments.

Already said but worth repeating. Are you missing out on $ by selling without market exposer? Seattle is a great example of an area that is seeing many multiples of offers and we in Spokane are seeing it to a lesser extent.

If your agent is not involved, then get an attorney to supply and write up the purchase and sale. Again, there are a lot of safety nets the attorney will not cast as a brokerage would.


Great luck with the move!

[93legendti]

I'm an agent and I wouldn't go it alone. As others have said either use the agent (a free reduction as he doesn't have to market it might be in order) or a real estate attorney. I will say that things can go south quickly, even with friends, and you might want an intermediary if they do.

Likewise, in this market I would make sure that you offered your house on the open market, you don't want to undersell it. If you are concerned about that you can always pay a few hundred to get your own appraisal to set the price.

+1. My real estate agent continues to find deals that I can't comprehend.

Real estate is no place to be informal or cheap, for lack of a batter word.

[Ken Robb]

I am a retired broker in California. Real estate laws and practices vary greatly from state-to-state. When I had buyers from New York and other states they were amazed that in California lawyers were rarely involved in routine residential transaction as escrow and title companies handled closings whereas in N.Y. buyers and sellers sat around a table with their respective lawyers and signed papers, passed checks, etc.

I don't know how things are usually done where you live. You have a good agent so I think you should ask him what he thinks of your plan and whether he could/would help you with the sale. I handled a couple of similar deals for clients for a reduced fee. They were out of state investors and I was able to get the sale closed without their flying cross country to deal with it. OTOH I got a call from very loyal clients (4 deals over 15 years) who were embarrassed/concerned that they might not need me to sell their home. They were moving to Texas and their next door neighbor offered to buy their rather tired home. The price offered was fair and there were no weird contingencies so I referred them to a good escrow officer who handled the whole deal very well. We are still friends. They didn't need me this time. I'll bet your good agent will do what he thinks is best for you. That's how he builds his business for the long haul.

[cnighbor1]

I use our agent to help with the sale (or suggest a reduced commission since he didn't need to market the place/find us a buyer)? Yes lower commission He can proper paper done thru a brokerage agent
and you want him on your side

[tiretrax]

No need to use the agent. Just be sure you're not leaving money on the table. Not sure why they're doing a 1031 on a residential property unless it will be rental property, but that's not your worry. Use an attorney - maybe the one at your title company.

[jlwdm]

Washington is a state that generally has little involvement by Real Estate Attorneys. Washington has a constitutional provision that allows real estate agents to make changes to the standard contracts and it will not be considered the unauthorized practice of law. Arizona is the same. Texas on the other hand requires every change that is not factual be prepared by an attorney. So in Texas you have an attorney tied to every title company office.

I was an attorney in Washington and have been involved in some real estate transactions there (more as an agent from out of state) and have sold real estate in Arizona and Texas for the last 20 years.

I work in high-end real estate and have done transactions at reduced fees in these types of situations for good clients. I am here for the long term and I try to always do what works best for my clients in the long term.

I have an expertise in my area and pricing varies substantially between properties so I feel I provide great value on pricing.

It depends on where you are in Seattle and what price. My wife and sister always have had a house in the Seattle area. Last May they decided it was time to cash in on there house they had remodeled because of all of the Chinese buyers in Bellevue in the mid $2m price range. They sold quickly for a little over list price and 8 out of 10 buyers looking at the house were Chinese.

Pricing is your big issue.

Jeff

[MacMan]

In my (recent) experience, an agent is extremely helpful between contract and closing. I assume there is a due diligence period, will be an inspection, and likely an "amendment to address" concerns, etc. I would negotiate a fixed fee with the agent at a value both of you are comfortable with.

[Blown Reek]

Redfin works well, too.

[JLP]

Ryan, I wouldn't sell directly right now unless they are just offering silly money. And by silly I mean far far beyond what you think is silly. I'd set up a bidding war and pay the full service fees associated with that.

We thought about selling directly, and it would have been a very bad mistake. I'm not thinking you have much chance of messing up the legal terms of the deal given your day job, but I'd be afraid you didn't really test the market for the real price right now.

[TMB]

Listen to JLP, he recently set a record.

I think the OP can handle his own paperwork on a deal like this.

RC - stay away from Vancouver unless you bring a mighty chequebook!

[rcnute]

Listen to JLP, he recently set a record.

I think the OP can handle his own paperwork on a deal like this.

RC - stay away from Vancouver unless you bring a mighty chequebook!

That Whistler condo's going to have to wait awhile!

Ryan

[54ny77]

OP could order a full appraisal from a reputable independent firm in his/her local area. That'll be $500 or so, +/-. It's a realistic benchmark to price anything that's somewhat standard, and will give insight into just how swell the neighbors are being in offering to purchase off-market. If the place is unique, then that's a different discussion/process.

[avalonracing]

OP could order a full appraisal from a reputable independent firm in his/her local area. That'll be $500 or so, +/-. It's a realistic benchmark to price anything that's somewhat standard, and will give insight into just how swell the neighbors are being in offering to purchase off-market. If the place is unique, then that's a different discussion/process.

Still if the place is unique and/or in demand people are often willing to pay well over appraisal.

(How short a memory we all have...)

[Ken Robb]

Appraisers of homes rely on the sales histories of "comparable properties". In a hot, rapidly rising market they will often come in low because they are, essentially, looking back. REALTORS who are active in a given area will probably have a better idea of current values. If we are talking about custom homes it becomes even harder for appraisers because while they know the size,age, general description of the properties they probably never got in the "comps" as active REALTORS did going on brokers' caravans or broker opens as previews are called.

I frequently got calls from appraisers asking me to compare the interiors, views,etc. of the home they were appraising with the interiors,views, etc. of the comps they hoped to use to reach a value.

[54ny77]

There's always the right something for someone. Problem is, once you get up there in lots of digits, that someone who likes your exact something gets rare.

Still if the place is unique and/or in demand people are often willing to pay well over appraisal.

(How short a memory we all have...)

[jlwdm]

You need to really factor in the value of your ability to rent the house back from the neighbor. Depending on your other options this can have great value. It is not all about price.

Jeff

[yngpunk]

Appraisers of homes rely on the sales histories of "comparable properties". In a hot, rapidly rising market they will often come in low because they are, essentially, looking back. REALTORS who are active in a given area will probably have a better idea of current values. If we are talking about custom homes it becomes even harder for appraisers because while they know the size,age, general description of the properties they probably never got in the "comps" as active REALTORS did going on brokers' caravans or broker opens as previews are called.

I frequently got calls from appraisers asking me to compare the interiors, views,etc. of the home they were appraising with the interiors,views, etc. of the comps they hoped to use to reach a value.

However, in this current lending environment, you're going to have to bring money to the closing if your appraisal comes in below the agreed upon selling price. Lender's aren't willing to loan more than 100% (if even that) of appraisal price.

[jlwdm]

However, in this current lending environment, you're going to have to bring money to the closing if your appraisal comes in below the agreed upon selling price. Lender's aren't willing to loan more than 100% (if even that) of appraisal price.

That is true on loan amount, but on lower priced homes in a lot of areas here sellers are getting 10 plus offers over list price in the first few days. In order to be the winning buyer it is necessary to provide a little something extra. This is commonly agreeing to pay the extra amount if the property does not appraise. Or it could be a specific closing gate and/or amount of time the seller gets to stay in the house after closing.

Jeff

[fuzzalow]

I subscribe to KISS: Keep it simple stupid.

I would price the property based on what you knew of your own neighborhood, after all you lived there, and the comps for what have sold in the town or even among the next blocks adjacent to your house.

I would not wait for the market to magically do its level setting in the tail wagging the dog in whipsawing me around for whatever the market decides to tell me is the price, that day, that week, that month. The real estate market is not quite that volatile. Brokers don't always know how to price an asset and they are prone to overstating sales and upside potential. Every broker has a fish story to tell. Bidding wars, short of properties inside Silicon Valley fought with IPO money, are few and far between. Be real.

The good properties do not linger, they go. If the market is as hot as you think it is, the good ones won't be on for more than a week or two at most. The real buyers will move decisively and rapidly. The property is an asset, not a lottery ticket to cash in. Price it effectively. Sell it, even to the offer in hand if it meets your valuation. Move on. To even consider renting it back is not a good move IMO. Make a decision and follow it through. Don't look back thinking you coulda-woulda-shoulda gotten that last $10k. Get on with your life.

[shovelhd]

I've sold all of my houses (3) myself, using an attorney. The most effective advertising was a sign at the end of the street on a busy road. Comps are easy to find with a little research. The longest time to offer was six weeks. I'm going to be selling my current house in a few months, and I see no need to change the methodology.

[fuzzalow]

I'm going to be selling my current house in a few months, and I see no need to change the methodology.

Good luck, make a killing.

There is a seasonality component in residential sales in getting it listed, sold & closed before the start of the school semester so hit the timing to market right and you should still be golden.

[jlwdm]

...

Bidding wars, short of properties inside Silicon Valley fought with IPO money, are few and far between. Be real.

...

Unfortunately, bidding is not happening in my end of the real estate market, but in some areas of the country bidding wars are the norm at lower prices.

My partner is closing a couple of properties on Friday at lower prices than we normally deal in and they each took around 10 offers over full price to get a house under contract. These transactions were not worth the commission we will earn but were done for families of friends.

Seattle is that kind of a market in many areas.


Jeff

[fuzzalow]

@^

I know little about real estate sales but I have lived and done battle in one of the most competive real estate markets in the USA. There is competition to win properties, there is the fudging of an opaque market in demanding a "final and best" offer which forces upping a bid just because a buyer cannot assume his competitor buyers are standing pat.

But that is a long way from a bidding war. IMO bidding wars are largely a fantasy. A highend buyer has the financial resources to be flexible in a bid but will be restrained by the savvy to know not to overpay for a property. A mid to low end buyer will not have the financial resources or credit power to bid against similar buyers in their segment of the RE market.

Silicon Valley is its own animal because of the scarcity of land and lot size. Zuckerberg bought a bunch of adjacent properties to his home at astronomical prices - 'Cos he could do it and it was the only way it could get done. But there is almost no place else in the world like that and I'd include Manhattan as not as crazy as Silicon Valley.

I don't know how hot somebody means when they say hot. But I've sold and bought in a hyper-competitive market and I laugh at the ideas that bidding wars happen. In the post-Lehman era, I'd say few and far between because to the averageJoe it was easy to go crazy bidding on property with money during a time when the banks were begging consumers to take it and spend it. Going crazy with someone else's money is easy, at least that's what it feels like to an unsophisticated buyer - until it's time to pay the piper. Smart savvy buyers do not enter into bidding wars.

[avalonracing]

Agent here...
"Bidding war" is just an overdramatic and overused term that has been embraced by the general public. I hear it used frequently when two parties have made offers on a house and drive the price up by $2500 over list. Not exactly a war but it gives people something to talk/brag about.

[fuzzalow]

Agent here...
"Bidding war" is just an overdramatic and overused term that has been embraced by the general public. I hear it used frequently when two parties have made offers on a house and drive the price up by $2500 over list. Not exactly a war but it gives people something to talk/brag about.

I don't mean to belabor this topic but I found it to be an immensely interesting and challenging market to learn about and to participate in. Strictly as a retail buyer who sold a home and bought an apartment. And this from the perspective as one having direct working knowledge & experience in capital markets - and in the beginning the RE buyers market still beat the crap outta me.

Real estate can feel rigged - moreso as a buyer in competitive markets than as a seller. A house seller takes the biggest number a buyer can make good on. A house buyer puts up as big a big number as the bank will let him have.

As an NYC apartment buyer it is not enough to price an asset correctly but to adjust pricing up or down accordingly for street, building and location. In addition to as well for depth, liquidity and aggressiveness from competitive buyers for the same property. Doing all of this'd be fun except that it is competing for a place you want to live. And just having the winning bid is not enough because in NYC there is the co-op board process to get approval to buy into the building.

Whereas buying a house is mostly satisfying the bank, buying a co-op is like buying an apartment and joining a country club at the same time - they wanna know who you are and they wanna see all your money. Good buildings wanna see lotsa money.

Finally, even if there is no bidding war, there still exists competitive bidding. If you wanna win, ya gotta know if where an asset is listed at is correct and price your bid accordingly. So in the NYC suburbs a reasonable price over list is not $2,500, it is $50k. In Manhattan, a reasonable price over list is $125k. And of course there is stuff listed at $150k over comp equivalent which will just sit there. Most people buying Manhattan real estate are not stupid. I think it only got stupid in all of RE during the height of the housing bubble when people that didn't belong in the housing market got pushed into it by high pressure mortgage brokers and easy money from the banks. Those guys weren't that bright. But home ownership is every person's dream, right?

Sorry if this is boring stuff but I found it utterly fascinating. Like high stakes gambling with big numbers and real skin in the game in a fairly opaque market structure. Maddening.

[jlwdm]

...

Real estate can feel rigged - moreso as a buyer in competitive markets than as a seller. A house seller takes the biggest number a buyer can make good on. A house buyer puts up as big a big number as the bank will let him have.

...


A high end home buyer in NYC or most places is not worried about what a bank will let him have. Cash is normally an option and should be at the highest end of the market.

Jeff