Category Archives: Negotiation

List2Move Syracuse Forms

The following local forms are available on the List2Move Syracuse site (including the surrounding counties) for active For Sale by Owner properties in Syracuse (Central NY).

Available for free when you are a List2Move client

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Change commissions after accepted offer?

 

One of the requirements for gaining access to MLS as a For Sale by Owner or as any full service real estate client is an offer of commission.  It can be as low as one dollar (as with List2Move.com) but you have to make a blanket offer of commission and it has to be documented in the listing agreement (Contract)!  This “offer” basically says, “if you (a Realtor) bring me an offer that I accept, I will pay you (that Realtor) “x” amount of dollars or percent!!!!  It is contractual, it is specified in the MLS and only Realtors who have access to the MLS database can see it!!!!!   Again, it is contractual because we are dealing with money….which should make cents, right?

 

Negotiation of the commission can only happen before the contract is signed!

 

Real life story….

I got a call this morning from an agent who has an accepted offer with a seller.  She tells me that the seller who is offering 1.5% says they are going to pay less because the buyer came in before they put the home on the MLS without a Realtor, however, the contract was drawn up by a Realtor with the Realtor’s name on it naming the Realtor’s company as the procuring cause of the sale.

I looked up the offer of compensation on our listing agreement, and it read 1.5%.   Seller didn’t renegotiate with Realtor before accepting the offer and therefore, most likely, the Realtor will be paid the full 1.5% commission.

Negotiation beyond the Engineers Inspection

Can a buyer negotiate after signing off on the engineers inspection?

 

Not really…. unless you let them.

 

We just had this happen to one of our Rochester NY For Sale By Owner clients.  The buyer signed off on the engineers inspection, then right before closing they threatened not to close unless the seller agreed to fix something which would have cost the sellers 5 thousand dollars.   We suggested they talk to their attorney, and ask him about suing for what they call…..”Specific Performance.”  Specific Performance basically means that in this case, the buyer would be forced by the court to buy the sellers home.

 

Long story short, the sellers did talk with their attorney and they closed two weeks ago, without having to pay for the repair!  Don’t let buyers push you around, talk to your attorney about any legal questions.

Earnest Money Control

Yesterday I got a call from one of our Rochester, NY For Sale By Owner clients.  He was asking questions about the earnest deposit money that a buyer “traditionally” puts into an escrow account.

He had a situation where there was a buried oil tank on the property and the buyer didn’t want to go through with the purchase, except the buyer had already signed off on the engineers inspection.

So to make a long story short the buyer wants the seller to pay the $4-5K to remove and replace the tank and the seller doesn’t want to nor feels it is part of the contractual agreement.  Chances are the buyer will walk (but could also be in breach of contract) but what happens to the $10k sitting in the escrow account?

First of all, earnest money (Earnest Money) is NEGOTIATED up front!  Where it is kept it is spelled out in the purchase and sale contract!!!!!  Sellers should always take delivery of the down payment and it should be sitting in your attorney’s escrow account! You ask why?  Control You want to have control of that money for situations like this.

In this case the money is sitting in the buyers agent’s escrow, and even though the sellers would have to sign a release for the buyers to get it back, control of the money could be 9/10ths of the law…

1. Always review the contract with us before you sign it.

2. Always have your attorney look at your purchase and sale contract before you sign it!

3. Always make sure you have control over the escrow monies!

Adding the commission to the purchase price

This could be a first. Could times actually be changing?

I got a call this evening from one of our newer listings who had an offer brought in by a real estate agent.  This agent obviously saw in the MLS (database) that our client was only offering $1.00 (one dollar).  But to the agent’s credit, she didn’t moan and groan about how the seller has to pay her commissions. Instead she counseled her buyers, explained the situation and wrote the commission into the offer.  This is called being a PROFESSIONAL.  She was upfront and honest with all parties involved!

 

So we talked about the offer, and it was legit.  Good price, good closing date, good time for financing etc, so basically, it was a “clean” offer.  But I could tell the seller was interested in the win/win her and for this agent.  They weren’t quite at their price and the agent wanted her 3% commission.  The answer to me was simple, just add the cost of the commission to the price that the seller wanted in a counter offer.   I explained that this is done all the time when buyers need help in the form of seller concessions.  The client went on to explain that the agent was very “nice” and accommodating and that she had communicated several time since she brought the buyers in.  And before we ended our conversation, I got the feeling that the sellers liked this agent and maybe they weren’t going to counter with the full 3%.

 

We are going to find out sooner than later, but if I were to guess…I am thinking the sellers are going to counter less then the full cost of the commission and pay it.

 

Real Estate Forms-Rochester, Buffalo, and Syracuse NY

These forms are free to List2Move.com customers.  So go ahead and register now.  Only pay when you you go live!!!!

NYS required real estate sales forms

 

OK, the purpose of posting these real estate forms is to help you sellers sell by owner and save money!

These are the same forms that real estate agents in Rochester, NY use.  They will also be available on the List2Move.com Rochester, Buffalo, and Syracuse NY site.

****Available now to List2Move clients in your Account under Legal Forms*******

 

If you look at any of these contract forms they are all ‘fill in the blank’ because real estate agents can not practice law.  So you don’t need a degree in Rocket Science to fill one out.  List2Move clients can access the broker 24/7 for any questions regarding these forms.

Forms are broken down like this

  1. Contracts-covering the general agreement
  2. Addenda-further spelling out the agreement
  3. Disclosure-forms that are sometimes legally required

When the contract is delivered to you from a buyer it should have the purchase and sale contract with the corresponding addenda (Such as Engineers Inspection details or FHA’s ‘All Parties Agreement) and you will add to it Lead Paint Disclosure if applicable or even maybe a property condition disclosure. See what John Blyth, top real estate attorney, said about property condition disclosure.

 

1. Contracts

Contract-Purchase and Sale-Residential-This is what the buyer’s will present you.

Contract-Purchase and Sale-Manufactured Housing

Contract-Purchase and Sale-Vacant Land

Contract-Purchase and Sale-Condo/HOA

Contract-Continuation of Purchase and Sale Contract-Used when you run out of paper during counter offers etc.

 

2. Addenda to contracts- further spell out the agreements

Addendum-All Parties Agreement for FHA/VA financing

Addendum-Buyer’s Notice Conditional Removal of Contingencies

Addendum-Buyer’s Notice of Removal of Contingencies

Addendum-Lead Compliance (Seller’s-Required if built before 1978)

Addendum-Lead compliance for Leasing of Properties (Landlords)

Addendum-Mortgage Assumption (If you are going to let someone “assume” your mtg)

Addendum-Property Inspection (ex…Engineers Inspection)

Addendum-Seller Financing

Addendum-Transfer of Title Contingency (When your buyer has to sell their home to buy yours)

Addendum-Utility Surcharges

Addendum-Well and Septic Services

 

3. Disclosure

Addendum-Disclosure Notice for All Residential Property in Wayne County

Protect Your Family From Lead In Your Home Pamphlet

Bump Notice to Buyers

Cancellation and Release of Purchase and Sale Contract

Personal Property Agreement

Property Condition Disclosure for COMMERCIAL Properties

Property Condition Disclosure RESIDENTIAL properties

 

4. Other

Open House Sign In Sheet

Hustling Rebates In Real Estate

A real estate commission rebate is not considered taxable income!

What does that mean?  Well, it means you would get tax free money back soon after closing on your next home or property!!!!  Sounds good but not many Realtors are offering it.  Yet.  However, once you know about real estate rebates, you would be crazy not to seek out the largest one you could find! It really is that simple.

Let’s face it you are going to do the majority of the work finding and purchasing your new home and that is a fact!  So why not treat this like a business deal which it is and shop for the best rebate you can get.  Hey, everyone knows a real estate agent or ten, but this is BUSINESS, don’t make the costly mistake and make this personal.  Ask them all what kind of rebate you can expect from them when you use their services.  Remember it is your money that you are bringing to the table so get some back!

List2Move.com in Rochester and Syracuse, NY have been offering hefty rebates over the last couple years but so few people actually get it!  This can add up to literally thousands of dollars, that you were bringing to the closing table either way!!!!

Check your state to see if commission rebates are legal.  New York State allows real estate commission rebates!

Negotiation rules by the pros

Sellers, this is a must read on negotiating;


Top Ten Negotiating Rules for REALTORS

Thanks to Rebecca Burcher for this link.  Rebecca is a real estate broker and is New Hampshire’s exclusive Flat Fee MLS real estate Brokerage for List2Move.com.  Rebecca offers Flat Fee MLS Real Estate Brokerage from $199 and credits at closing for buyers.

Rebecca is also a member of  NAHBRA- Nashua Area Home Builders & Remodelers Association,  HBRNH- Home Builders & Remodelers Association of NH, and  NAHB- National Association of Home Builders.

She can be reached at 603-305-5422 and operates out of Milford, New Hampshire.

Wolf in sheeps clothing

Be very careful where you get your information on the Internet.  Many agents will post FSBO friendly information like statistics and articles on who can get you more money…you as a FSBO - or they –  as experienced agents.  These stats usually come from the National Association of Realtors (NAR)…an association that gets their money from keeping 1.3 million agents in  the business of collecting high commissions so they in turn  can collect their  own high dues.   These statistics are massaged before they are published and can be very misleading.  If the studies were conducted by a third party it might project an entirely differnt viewpoint. Listen to what they have to say, but educate yourself from other sources as well. There is so much going on behind the scenes in real estate today ( for example, the multiple lawsuits being filed against the NAR by the Department of Justice) that the general public just can’t stay on top of it all. Visit  FSBO friendly sites like www.list2move.com. and others to expose yourself to the issues regarding your own particular circumstance and make selling decisions based upon facts. The myriad options open to sellers who now - finally  – have access to the Realtor MLS are worth knowing about!

(List2move.com does not represent buyers. Period.  it is against their company policy because they consider it a CONFLICT OF INTEREST. )

 

List2move.com does not represent any buyers at all, it is against their company policy because they consider it a CONFLICT OF INTEREST. 

 

Conventional financing is not the only game in town

As banks tighten up their lending practices,  buyers are finding it harder to obtain financing and sellers are finding it harder to find  buyers for the cash out purchase.   It becomes a vicious circle.

So, if obtaining a bank mortgage was the only means of purchasing real estate we would all see a price reduction, because of the lack of “bank qualified” buyers. Fortunately for all of us, “conventional financing” is not the only game in town.  There are many different financing products that buyers can tap into through the lending institutions. some of these include, FHA loans, VA loans, Step Up Programs, and buy downs.   You can discuss the details of these products with any mortgage banker or mortgage broker, but there are a couple things you as a seller need to think about.

FHA Loans

If you allow the buyer to purchase with an FHA loan, the appraiser will also be a federal inspector and can demand that repairs are made to the property prior to closing.  This can be a real pain if you are looking to sell “as is.”

VA

Veterans have a loan program available to them in return for their service to our country. iI is a benefit and they can access money relatively easy.  For the seller however, you have to jump through hoops if you accept this type of financing.  The have their own VA inspectors as well and can demand that repairs are made to the property before closing. 

Conventional

Conventional loans are the least restrictive to the seller.  Unless the property is in really bad shape the bank appraiser does not act as an inspector for the bank. 

Creative Financing

One does not typically see a lot of creative financing in a good real estate market, but when the chips are down, like we read about almost everyday now, one sees more creative deals.  Creative financing is nothing more than sellers and buyers negotiating consideration for the purchase of a property.  A seller holding back a mortgage on the property that he is selling is a form of creative financing. 

Any type of financing is a barrier to entry and the harder financing is to obtain or the more it costs (interest rate) the more it drives the price of real estate down. 

There are many other forms of creative financing and there are many books written on the subject.  Make sure your attorney reviews everything before you sign anything.

If you are considering selling anything other than your personal residence you should talk to a Certified Exchange Advisor to see what the tax consequences would be, There are a lot of great options out there for savings in taxes and they are worth looking into!

To talk with a Certified Exchange Advisor, call 585-377-5000 ext 1