We just passed the chimney inspection with flying colors! I am not extremely knowledgeable about fireplaces because they aren’t in all homes here and we hardly ever use them. But I did learn when I had the Spanish Bungalow that most fireplaces in the old homes are brick and mortar without any ‘lining’. Over years the mortar disintegrates and there is a potential hazard that fire and/or extremely high heat can seep through the brick crevices and get to the wood framing around the lower part of the fireplace. The estimate to ‘line’ the fireplace for the little house in North Park was $7,000. Uhhh, no thanks, the Buyer can light some candles in there
In this 1930s house there is a clay oval ‘flue’ inset down the brick chimney so I knew that the chimney was probably usable. Of course the first inspector made a big deal that there was 3" of brick and mortar not covered by the clay flue and some other crazy scary stuff. Chimney inspector just marveled that there was a clay flue installed and said “in the 30s only the military or very wealthy families paid for the clay flue”. Guess I got lucky… cannot imagine why the ‘military’ got the clay flue installed in their homes, maybe they knew more about fire safety than the average bear. All clear, now we have the foundation inspection hump next week.
My agent has also just received a request from a 2nd agent for their buyers. “I guess we missed the boat”. Wants to be contacted if anything happens to this escrow.
We were able to make an offer on a property in escrow when the sellers were having contingency issues with the buyers. They decided to stick it out so our offer was for naught. So we really made five offers - including the three we were outbid on and the one we got accepted. Also, for one of those three offers, we were the official back-up (or as I called it first runner-up) in case the accepted bid fell through. It is a lot of docusigning to make the offers though, so not everyone might be willing to do it unless they know they have a serious chance.
I would think that another potential purchaser can submit an offer (knowing there is a current contract), and your agent would have to present it to you. Your agent has less incentive to pursue another buyer ans then he/she would have to split that rather nice $$$$$ commission. But thats NOT your problem. You want to sell this house. If the Chicago buyers try to get you to come down a little bit on the price due to some inspection thing or other, you could ask your agent to eat that cost out of their commission, and say that there is a base minimum you must clear from the sale of this house. Since he/she is getting the full commission, what is it, like $55,500 for not a lot of showings?? Thats a sweet deal and they can afford to be a little flexible. JMO.
As Marilyn stated, its a lot of work to get an official offer signed and accepted. My agent doesn’t want to get any buyer’s hopes up since we currently have no reason to believe that our current transaction will go south. Nothing unreasonable has been requested yet and no due dates have been missed.
She is reluctant to waste another agent’s time or encourage anyone to get their hopes up. It would be an excellent negotiating tool but for now we can state we have two very interested buyers waiting.
Isnt it the buyers realtor’s responsibility to get an offer presented to you? It should be no skin off your realtors back except that they’d lose half their commission if your first offer falls through!
For my beloved house that I bought 21 years ago, I was a successful back up offer. The original buyer tried to negotiate concessions, and blew a deadline, and the seller went with us.
I loved that house. Unfortunately, I had to sell the house last year as part of a divorce, and when I bought my new place, the seller had a signed back up offer in the wings and it was a big incentive not to try and seek concessions for minor issues. (Not sure I woukd have tried, but it certainly kept me on my toes).
My agent is not getting full commission. In my listing agreement, if she brings the buyer, there is a reduced commission. In addition, I had already negotiated a reduced commission going into the sale. So, although she is getting ‘double commission’, it’s nowhere what the standard commission is in our area (which is 5%). Also, during the negotiations with seller last week (wait, it wasn’t even a week ago!!) she threw in another credit to get me close to what I wanted.
Besides, she is fully aware that she didn’t ‘bring’ the buyer. I ran out to the street and dragged the buyers in to come look at the house They were just outside looking at the flyer on their first visit.
It’s always nice to hear a successful purchase from a backup offer. There is hope! But most times the Sellers have gone down a road with a buyer for several weeks and they know it will be another few weeks before they can even get into contract again. So, you have to balance the ‘concessions requested’ against starting all over again.
It is completely normal for the chimneys in older houses to have to be relined. I am very surprised to hear a quote of $7K, though. On a 1-story house?? For our house–2 high-ceilinged stories plus full cellar and attic–it would probably be about $3k to line a chimney from cellar on up.
LOL- You brought in tire kickers and they bought the house!!
Its refreshing to hear you have such an upstanding realtor who dropper her commission and threw in an additional credit. Where I am, commissions are 6% (Before the crash they were at times 7%) and I am not sure how flexible they were.
Commissions are always negotiable. I cannot believe that commissions are still at 6% in other areas of the country. We probably have way too many realtors swarming over a small inventory. She is grateful for my loyalty, there are a lot of agents that have tried to get my listings (including Mr Slimy agent that originally sold this house). I am not very demanding that she spend a lot of money on ‘marketing’. Historically, Open Houses really haven’t sold the properties. I think in 17 properties only one couple bought after walking through the public Open House. And even then, they came back for a private showing with their agent.
Sometimes she tries to put a photo ad in one of those glossy real estate magazines that you pick up around town. They don’t even come out to press until about 3 weeks after you get your photos done and go live. If we don’t have an offer in 3 weeks, something is wrong with our pricing. I keep asking her why she would waste her money? To get her name out for exposure probably.
But here are some tips for negotiating commission.
A lot of times agents will come in for your interview and promise “I can sell this house for $550,000”. But in your heart you know that it really won’t sell for $550,000. I use a graduated commission scale. I tell the agent - if you sell this house for $550,000 or above you will get full 5% commission. If it sells for less than $550,000 the commission shall be 4.75%. If you sell for less than $500,000 the commission shall be 4.5%. They suddenly sharpen their pencil to a realistic number or agree to the creative commission schedule.
Another issue that really really bugs me is the credits or concessions. When selling homes priced in the first time homebuyer pricing zone, most of these buyers will ask for a ‘credit’ back from Seller to cover closing costs. In this market that is somewhere between $5,000 and $10,000. So, for example, the contract price states $510,000 with a $10,000 credit. The realtors are getting a commission on that $10,000 and the Seller is not receiving one dime of that money. Why should I pay commission on any portion of that credit or concession? Bugs the heck out of me. I’m going to have to pay $500 to realtors for money I didn’t receive!!!
I have found that you cannot negotiate creative commission schedules with agents who work with large national brokerages. Their back office management just do not know what to do, they have rules about how commission gets paid, etc. And, if an agent is new or not extremely successful in their office they are too scared to go back and try to get the commission schedule approved. In that case they will write up the Listing Agreement with the standard 5% commission and then you need to ask for a special ‘amendment’ with the specific terms and the agent refunds the commission credit inside the escrow. This means that the Brokerage gets paid the full 5% but the agent gives a credit from their portion (after their brokerage takes their cut back at the office). It all works out with the IRS because agents are independent contractors and the refund is an ‘expense’ on their taxes. That is the one thing I was worried about, I didn’t want my agent to have to pay taxes on monies she did not receive.
Regarding cost to line chimney. I think it might be a situation where there is a very limited inventory of really old fireplaces in San Diego County. So, I think there is only one company that will line a chimney - they have a monopoly! I’m sure I might have been able to negotiate or find so meone else, but I just stopped right there with that idea for renovation
Interesting about the graduated commissions. Most realtors here are with big companies (Berkshire Hathaway, Coldwell Bankers, Prudential, etc) but there are some local ones as well.
That doesn’t mean you shouldn’t try hard to negotiate. It just means that you might have to sign the standard Listing Agreement with the standard commission. Then you insist on the ‘amendment’ between you and the agent that provides a commission refund inside escrow, or outside of escrow if necessary. I have received personal checks outside of escrow sometimes from my agent.
But everyone should definitely insist that their Listing Agreement pays commission only on the Net Sales Price, less credits. Sometimes, if I know my profit is going to stink (and my agent will always know that my profit is going to stink), I even insist on commission only on my true Net, less all my Seller closing costs. My agent feels really bad when the realtors are making more money than I did on a project.
When we determined we would get the best price selling our current house as a teardown, I went directly to about a dozen builders and developers who worked in our area. I had already been in contact with many of them, and had been following our local teardown market for years. I knew about the specific advantages of our location, about as good as it gets in our upscale suburb, and what every other teardown in the neighborhood had been sold for. So we knew the price we wanted and got a little more. I doubt a realtor could have gotten enough more to cover a commission, plus we were trying to simplify, not complicate, the process. We used an experienced attorney (no escrow in Illinois) and it all worked out.
