Private Real Estate Sale (No Agents)

[OkaForPrez]

Any yarders experienced with selling a home without real estate agents in Connecticut? Any Lessons Learned? How were closing costs different?


Lawyers,

Is this something you can do yourself? Is this something you SHOULD do yourself? What's a reasonable price to pay in Connecticut for sellers closing costs related to legal fees?

 

[XLCenterFan]

It is debatable. You basically conceded the point already. A lot more is expected of an agent selling a $2 Million home.

There is no way that it takes 6x the amount of work to sell a $2M home vs. a $280K home. Not even close. I have friends and family that are realtors.

 

[XLCenterFan]

After fishy and the other guy took you to task, I really thought twice about responding to you, but . . . the Guinness has kicked in, and I'm feeling a twee bit ornery.
So, here goes . . .
Your opening line was, essentially, a statement that there "should be a cap" on what an agent can charge a client.
Agents are hired by clients through a device we call a "contract."
Agents do not use force, induce duress, threaten, blackmail, or otherwise coerce clients to execute said contract.

Ergo, the Agent/Client relationship is a contractual relationship freely entered into by two or more individuals exhibiting free will. Within a democracy. Wherein said right to contract is guaranteed by the constitution.

Your suggestion is, essentially, one that supposes that the government would be better able than the home sellers themselves to determine what people above your putative cap should pay for an agent. That sort of government control of prices is . . . socialistic. Socialism is not here yet young fella - slow your role.

As Fishy pointed out, your suggestion, which is paternalistic and economically unsophisticated, outs itself as goat turd because the obvious impact would be to artificially restrict the agent supply at the high end and save commission for all the rich bozos who own homes valued above your cap, which would save them money but reduce their choices.

Finally, the difference between a great realtor and a so-so realtor on a 2 million dollar house will easily be more than the 3% they're making.

In sum, you're underqualified to run a Christmas Club account at your local bank.
Also, change your avatar. When I see your avatar View attachment 62959 it makes me think of my avatar View attachment 62960 , and I'd guess that Fishy thinks that your visage is "throat punchable."

Sir, you lose. Good day.

No one drinks Guinness anymore. Find some good beer you bum. Also, shut up boomer. Take your free marketeering and originalist interpretation of the constitution home.

 

[8893]

There is no way that it takes 6x the amount of work to sell a $2M home vs. a $280K home. Not even close. I have friends and family that are realtors.

How many $2M+ homes have they sold?

 

[XLCenterFan]

How many $2M+ homes have they sold?

I’ll check with them and report back to you.

 

[Excalibur]

There is no way that it takes 6x the amount of work to sell a $2M home vs. a $280K home. Not even close. I have friends and family that are realtors.

Ooh that makes you unique . . .

 

[Fishy]

Ok captain obvious. I agree with you here, but that’s not the angle I was thinking of.

I was just thinking that selling a house is selling a house, and that you shouldn’t necessarily garner 2.5-3% of every transaction, regardless of the price. I always thought the percent commission was a bad way to charge and needed to be rethought.

Selling a $200,000 house is not like selling a $2,000,000 house.

Selling a Camry is not like selling a Bugatti. Selling a Timex is not like selling a Patek Philippe. Selling a donkey is not like selling a thoroughbred racehorse. I can go on...

 

[XLCenterFan]

The guy is either a less intelligent version of Chief or he's trolling. Good job either way. He got multiple responses from Fishy, Me, 8893, and Excalibur. From pretty much a comment that you'd expect from a 17 year old freshman with a Che Gueverra poster on her door room wall.

Better than Milton Friedman and Antonin Scalia posters.

 

[Hoophound]

Selling multimillion dollar homes is very expensive. The advertising, photography, staging, web sites etc. cost big money. Aside from that, as this thread indicates, brokers and agents are always being beat up from one angle or another. They also face significant liability, particularly on high end properties. There should be far greater barriers to entry in the field, however, there are some very good agents. I’ve been in construction and real estate for many years. Agents often bring me construction clients. Some of them absolutely wow me with their concern for their client’s well being. There are scumbags in every trade, but the best agents are easily worth their full fee.

 

[YearoftheHusky]

Some of the misguided takes in here are, well, misguided.

Signed,
YearOfTheHusky
Real Estate Broker

 

[BParkDog]

There is no way that it takes 6x the amount of work to sell a $2M home vs. a $280K home. Not even close. I have friends and family that are realtors.

Last post for you, but I can't see you actually backing off your spot enough to see the light.

There is NO WAY that LeBron James works 1,114 times harder than all the guys in the G-League. There is NO WAY that the best senior lawyer in NYC works 10 times harder than a 1st year scrub. And so on.

One of these things must be true:
1. You don't believe that some realtors are substantially better at selling 2 million dollar houses than other realtors.
2. You do believe there are realtor that are substantially better at selling 2 million dollar house than other realtors, but you don't think they should be allowed to get paid for that superiority.
3. You don't believe that people should be able to freely contract with each other.
OR
4. You are intentionally not getting this. It's just not really that difficult.

 

[Chin Diesel]

Agree. There should be a cap.

There is. Just find an agent willing to do that.

 

[8893]

The guy is either a less intelligent version of Chief or he's trolling. Good job either way. He got multiple responses from Fishy, Me, 8893, and Excalibur. From pretty much a comment that you'd expect from a 17 year old freshman with a Che Gueverra poster on her door room wall.

It’s not an uncommon misperception.

Same thing with the contingent fees for CT lawyers in personal injury cases. Standard was always a straight one-third. Then several years ago the legislature in its infinite wisdom passed a capped sliding scale, whereby you make 1/3 of the first $300,000; 1/4 of the next $300,000; 1/5 of the next $300,000; 15% of the next $300,000; and 1/10 of anything more than $1.2M.

To charge a straight one-third you have to have the client sign a bolded and capitalized waiver that reads like they are giving you license to steal from them.

The notion that you want to provide a disincentive for your lawyer to obtain the highest recovery for you is as illogical as the belief that it requires less work is stupid.

Thankfully, it is easily explained to those capable of understanding it.

 

[Yardigan]

Great stuff there. Probably. Didn't read the whole thing.

If you are selling your own house, how do you handle a realtor bringing you a possible buyer? Do they negotiate a commission before bringing the buyers for a visit?

In our case, we were the buyer and had an agent. We were renting and the people that owned the house decided they wanted to sell. We got an agent, made an offer, negotiated a price that they agreed to. A few days later, the owner guy calls me and tries to convince me to dump the agent and we could just 'do it ourselves' because he was po'd about the 3%. I get it, but I was not at all interested in that...I can appreciate that folks want to and can save money diy'ing it, but there's just some things to me where I draw the risk line... I don't do real estate-ing, taxes, climbing on the roof, dropping trees ... I gladly pay professionals for these things....

 

[XLCenterFan]

It’s not an uncommon misperception.

Same thing with the contingent fees for CT lawyers in personal injury cases. Standard was always a straight one-third. Then several years ago the legislature in its infinite wisdom passed a capped sliding scale, whereby you make 1/3 of the first $300,000; 1/4 of the next $300,000; 1/5 of the next $300,000; 15% of the next $300,000; and 1/10 of anything more than $1.2M.

To charge a straight one-third you have to have the client sign a bolded and capitalized waiver that reads like they are giving you license to steal from them.

The notion that you want to provide a disincentive for your lawyer to obtain the highest recovery for you is as illogical as the belief that it requires less work is stupid.

Thankfully, it is easily explained to those capable of understanding it.

Marginal rates seem fair to me. While I am not well versed in civil suits or personal injury cases, it seems to make more sense for real estate, or other value-based transactions. The idea of charging percentages, regardless of the amount, always seemed odd to me. When something of value exchanges hands, and an intermediary facilitates that exchange, most of the time they are doing the same amount of work, regardless of the numbers - whether it is a baseball card, a home, art, or an investment. For example, when I play poker, and I sell shares of my action, the amount I may have to pay out is capped. So if I play in a $500 tournament, and a friend of mine wants to buy 10%, they will get a 10% return (should I cash) up to a set amount. Maybe it’s $1,000. So if I win $20,000, and they bought 10% of the initial $500 investment at $50, I don’t have to shell out $2,000, but the pre-determined cap amount of $1,000.

This is the mindset I’m coming from. I apologize if I insulted any high end real estate agents, but I am merely questioning the practice. Thank you for your contribution and the provided example.

 

[UCONNJACK]

This reminds me a bit of the process getting into my current house.

House #1. We found a house in a town on the train lines into the city that we liked. We had made a verbal offer with our broker in the brokers in the seller decided that we would have a meeting together and fill out a formal written offer. My wife and I arrived a little early so we decided to drive by the house which was located on a steep hill. To our surprise, the property next to us had been subdivided send a new house was going up that in the sub-decided lot covered virtually the whole lot. The owner/builder had gotten around the two story limitation by making the “basement“ 10 feet high. So wedged up against my lot I had a 30 foot monstrosity being framed out. Additionally the new house was on the uphill side of us on a fairly steep hill. The effect of it would have been like living next to a drive-in movie screen. I looked at my wife and said I’m not even sure we’ll get enough sunlight to grow grass. We decided that we no longer wanted the property.

We went to meeting and told everyone we had just driving by the property. They immediately all got concerned looks on their faces. I said that we weren’t interested in the property anymore. The buyer says to me “look tell me a dollar amount that you would make you interested. I said there isn’t one and I wished the seller well and walked out. He looked like he was going to be sick. I probably would’ve felt a little more badly for him if it wasn’t for the fact he did not disclose that the adjoining lot was subdivided and that he has opposed the application for the zoning waivers for building of the new house on it.

House #2. We had been in the middle of a back-and-forth negotiation on a House that we liked where are you go to the called up and said that the seller has decided to end the negotiations. I asked her “so there’s no deal? No possibility for negotiation?” and she said there was not.

I hung up the phone and called the seller and who are confirmed that she terminated negotiations because she felt like we were too far apart. I said that I completely understood and then I just wanted to tell her how much we enjoyed meeting her and wish her the very best of luck selling the property. She seemed a little taken aback. I told her that I also wanted to say it’s not that we didn’t think the house was lovely and worth what she was asking, it was just that we were young couple and at the top of our budget. I mentioned again that I knew that property had been on the market for a while so they really wished her the best of luck and I hope she found a buyer soon. By the end of the call the negotiation was re-opened.

My broker called me up in a panic and said “you can’t talk to the seller, only I can talk to the seller.” I pointed out to her that I can talk to whomever I wanted and that until I did that the deal has fallen through. I told her not to worry that I was still keeping her as my broker, but she should just get out of the way and let me close the deal.

The seller came down and we went up but we were still a little far apart. The listing realtor called me and asked me if there was anything they could do. I said yes the seller has come down and I have come up, but the only one who’s holding fast is you. If you really want to make the sale reduce your commission, which they did.

Fast forward to the closing. Everyone was sitting around the table when the broker who had agreed to the reduced commission got up and said “there’s been some talk about reducing commission, on principal I’m not going to do that.” I said “Jim, I understand, I’m a man of principle myself. I see you have a calculator in front of you. Just so we all understand the math, can you do a quick computation for me?“ He said absolutely. I thanked him and said “can you take 6% and multiply it times zero, because on principal I won’t do business with someone who doesn’t keep their word.” You could’ve heard a pin drop in the room. I said that I’m sorry that Jim wasted everyone’s time you and got up to leave. Jim said “ wait a minute, wait a minute, we can figure something out after we close.“ I said “well actually we can’t Jim since we’ve already established that you aren’t a man of your word, but what we can do is you can write me a check right now, in the amount that I tell you, and as long as you’re willing to do that I am willing to go forward in deference to everyone else in the room.” I came up with a new number that exceeded what he would’ve had to give me had we kept the original deal. As he went to write the check his hands were shaking so badly he had to excuse himself and run out in the hallway to be able to do it.

I’ve been living here for almost 40 years now and have socialized with both of the listing realtor and my realtor, but never the broker, oddly enough.

Bottom line is, if you’ve got a good listing, brokers will rush to list it and to sell it as long as you were using local agents. If, however, you use an out-of-town agent, the locals will never take anyone to look at it.

Just out of curiosity. What was the time frame between physical visits on House 1? I can’t imagine a site being cleared, foundation completed and framing started within a short time period. Also your agent didn’t do their due diligence with regards to external influences.

 

[CL82]

Just out of curiosity. What was the time frame between physical visits on House 1? I can’t imagine a site being cleared, foundation completed and framing started within a short time period. Also your agent didn’t do their due diligence with regards to external influences.

That’s a great question, I actually went and asked Mrs. 82. I think what happened was we made a below asking price offer and they didn’t accept it until later. That’s probably why they had us at this meeting to take this otherwise stale offer to put it into a contract. That’s also why we drove by the look at the house again, because it had been a while.

My sense was that everyone in the room knew what was happening with this property except us.

 

[Deepster]

Ok captain obvious. I agree with you here, but that’s not the angle I was thinking of.

I was just thinking that selling a house is selling a house, and that you shouldn’t necessarily garner 2.5-3% of every transaction, regardless of the price. I always thought the percent commission was a bad way to charge and needed to be rethought.

Why? The stereotypical agent that sells the 200k house is a cheap blazer, bad haircut guy churning out house after house. The agent that sells the 2m house is more polished and has a better reputation in a better community. It's the Ferrari salesman vs a Hyundai salesman. If you're good enough to play in bigger arena and better at what you do, you deserve more money.

That said, ANY agent is smart enough to cut 0.5% to 1.0% off their end if it means closing the right deal. If you don't take advantage of that, shame on you.

 

[upstater]

No one said that pal. What are you in the commission game!? I’m just saying that the percentage commission is a weird and antiquated way to operate in real estate. 2.5-3% of a median value home is about $8,000. For a home that is $2M, it’s about $50k. The marginal amount of work it took to sell the higher valued home doesn’t justify the extra $42k. It’s not even debatable.

Uh, it's 3% seller/3% buyer, so 6%.

There are indeed a lot of services provided by realtors, and it doesn't seem like a marginal amount of work to me, BUT I wouldn't know how lucrative it is unless our understood what kind of volume they handle, what their down seasons are, etc. It is a weird business though since some people do it as side gigs, others do it for friends and family, and if you're cushy with a big firm and doing favors for a pal, you'll hire their niece. That's the only complaint I have. It's just too damn incestuous.

 

[Apollo]

There is no way that it takes 6x the amount of work to sell a $2M home vs. a $280K home. Not even close. I have friends and family that are realtors.

It’s not just the work. You pay a ton more in marketing to buyers and for landing the listing... and the politics need to be more refined to cater to that kind of clientele. I understand where you’re coming from, but it’s not a strong argument. Yes, the paperwork and putting to MLS is essentially the same work but there is a lot more that can go into listing a 2MM home vs. 200k. It’s so much more then those things.

 

[upstater]

So, I got a text from a friend that a potential buyer who already viewed my house with an agent wanted to purchase the house through a private sale, no agents.

Now, I'm not going to cut out my agent of their commission, I also have a contract with them. Nor will they deliberately cut out a Buyer's agent, if they know about the deal.

Q: what do you all who work real estate think about my putting together a private deal, organized by my real estate attorney, and me letting my seller's agent know that I will send them a check with the agreed upon proceeds at the end of the deal?

Ethically, I'm beholden to my agent, and I'm not breaking a contract with them since I am paying them the agreed upon 3%.

Thoughts?

 

[Rico444]

Great stuff there. Probably. Didn't read the whole thing.

Lol, this is gonna be my go-to response on the board from now on.

 

[Apollo]

So, I got a text from a friend that a potential buyer who already viewed my house with an agent wanted to purchase the house through a private sale, no agents.

Now, I'm not going to cut out my agent of their commission, I also have a contract with them. Nor will they deliberately cut out a Buyer's agent, if they know about the deal.

Q: what do you all who work real estate think about my putting together a private deal, organized by my real estate attorney, and me letting my seller's agent know that I will send them a check with the agreed upon proceeds at the end of the deal?

Ethically, I'm beholden to my agent, and I'm not breaking a contract with them since I am paying them the agreed upon 3%.

Thoughts?

You may as well let the agent do the work if you’re going to pay them.
Also, If the buyer has a contract with their agent and the agent was the one who made them aware of the property, they are legally entitled to a commission whether they help handle the work load from this point forward or not.

 

[8893]

You may as well let the agent do the work if you’re going to pay them.
Also, If the buyer has a contract with their agent and the agent was the one who made them aware of the property, they are legally entitled to a commission whether they help handle the work load from this point forward or not.

This. You have no obligation to the buyer’s agent, but as a practical matter the buyer probably does and that is likely to to be complication.

Nothing that can’t be drafted around, but make sure your lawyer is aware.

 

[Bobol]

My law office enjoys a health residential real estate practice.

The biggest problem I have seen sellers encounter when attempting to sell their property themself (“For Sale By Owner” a/k/a “FISBO”) is that they do not know what the fair market value is.

I have seen listing prices for FISBO properties set too high causing the property to sit unsold, and I have seen sellers not understand the value of their property and set the price way too low. Be careful.

Hire an experienced attorney who does residential real estate on a regular basis. Don’t hire the attorney based upon what his/ her fee is.

Your one is likely your most valuable possession. The least expensive attorney is not always the best.

 

[QuickDraw]

As someone currently considering putting our home on the market early this spring I appreciate all the information and insights. This will be only my 2nd home sale & was ill prepared for the emotional aspect of selling the first time, buying is much easier from my perspective.
Thanks to all who contribute their professional and personal experiences.