Ditto in my neck if the woods: 6% is the standard commission rate, and when you add the other joys of selling, such as the excise tax, and it will be close to 8-9% of the selling price easily.
4%, 5%, 6% – all are pretty hefty amounts. When we sold our Old House, I don’t think our agent really earned her commission. It was another agent who brought tons of prospective buyers to see our house, one of which bought it. Our agent and her firm didn’t bring anyone to see it. And the marketing they did was unremarkable.
The appraiser came yesterday. Luckily I was there because my agent had a conflict at the last minute. Evidently my agent ‘emailed’ her comps and list of improvements to the appraiser. The appraiser had a lot of questions about where the additions were and lots of confusion about the Accessory Building and the permits. We will see what the final report comes up with for value. Hoping this appraiser gives at least some value for the large amount of money spent upgrading the house to a condition that is superior to the other homes that sold recently.
How close are the comps? Do your buyers have any flexibility as to the size of the downpayment if the appraisal comes in low?
That is a very good question about the down payment. Usually we will ask for proof of funds and have a big discussion with buyers about the possibility that they may have to make up the difference between the bank’s appraisal value and making up the down payment amount, if needed. I always try to get the ‘Appraisal Contingency’ removed from the contract. But they would not budge on the appraisal contingency. And, I haven’t got a straight answer on whether they have funds to make up the difference. I need to get working on that!
I do not know which comps she sent to the appraiser. She was supposed to share them with me, but I think she got distracted yesterday. Unfortunately some of the comps that are the most similar to this property are over 3 months old and I don’t think an appraiser will consider them.
Just a little update… remember the retiring couple from San Marino, CA? They went to my project house and tried to find me and then came over to my home and we met for about an hour. She sent a lovely little thank you note and yesterday I received a delivery of a nice flowering plant as another thank you. I had to break out the old fashioned stationary and send her a note. Haven’t actually written on stationary for a long time - had to search through all my drawers to even find some 
cb, how nice that the couple followed up to express their appreciation for all of the help you provided to them. Clearly your house is a gem, and you are as well!
Just followed up on ‘proof of funds’ from buyers and received a copy of their proof of funds. They should be able to cover any difference in appraisal value / down payment.
Actually kept myself away from the project today and ran errands. Going to try to finalize costs tonight. I just keep avoiding it. Ignorance is bliss
yay, yay, yay!!
Regarding the comparables. For some reason there is only one property on her list that sold in the last 3 months. The others sold in the last 6 months. I’m guessing the appraiser will focus on the most recent sale and the value on that is $899k sold in January. Same small lot, below average condition, peek a boo ocean view down the street.
It’s going to be very amusing how much value the appraiser gives to view and superior condition.
Amusing. I am not sure that word means what you think it mean. 
Amusing as in it only hurts when you laugh?
Well, since that comp is the same value you are walking away with, assuming the appraiser values yours at at least that much, you should be fine.
I have a question about providing “proof of funds”: Did the buyers provide something like a bank or brokerage statement showing what they have in an account??
In California, part of a standard purchase agreement is that Buyer must provide ‘proof of funds’ showing they have enough funds in some account somewhere to cover the down payment and closing costs. I personally feel it is an intrusion into privacy. I usually just have the real estate agent call into the lender and ask for confirmation that they have proof of the down payment, since the lender definitely needs that info to start up the loan process.
Or, if it is a Cash Buyer I will ask to review proof of funds.
But, in this case, I asked for the proof of funds since they were supposed to provide it to Seller within 3 days and no one could give me an answer. The guy sent it without crossing out his personal information such as home or work address and the account number. He should have blacked those out.
Yes, it was a Money Market type account.
I was asked to provide proof of funds for a RE purchase I did for all cash. I showed my brokerage account statement but I blacked out info about the accounts that the seller didn’t need to know about, like my and DH’s IRA balances. I wanted to make sure there wasn’t something else I should have done.
Proof of fund should be provided at the time of offer, a lot of agents and sellers do not accept an offer without it. A bank letter or bank statement with account numbers crossed out is sufficient, but it must match the buyer’s name and profile. With or without address.
A Bank letter is a letter written on bank’s official letterhead with bank’s officer’s signature that guarantees the funding of the buyer is sufficient to X dollars. This is done all the time in commercial transactions.
We had to show proof of funds for S to attend journalism school! He had to cite someone who would be able to come up with the portion of the tuition&expenses not covered by his outside scholarship and personal funds. They wanted to see actual $$ in an account, not proof of a HELOC or whatever. I was startled, never having heard of such a thing.
DS is going through all that now-- the “proof of funds” and finalizing the mortgage. Because there are still accounts that we have our names attached to (a USAA stock account, an online savings acct and an old bank account that happens to be with the bank doing the mortgage) we have had to sign letters saying he has free and clear access to those funds (ie they are his funds). We keep some of the accounts linked for ease of funds transfer should there ever be a need.
Congrats, CB!
Last time we refi’ed a mortgage, the mortgage company wanted 3 months of statements for all our bank accounts, retirement accounts, etc, which is pretty stupid. And it was a pain because this stuff is all paperless now. What does a monthly statement even mean when there’s no monthly statement?
So I went on-line and listed the transactions for the last three months in one month intervals, printed those out, and submitted them. It made them happy… this stuff is trivial to doctor, though. A couple of quick edits and I could have been a millionaire. On paper anyway.
I can see requiring proof of something when you are doing a transaction where you are bringing 10’s or 100’s of thousands of dollars, but a refi? It’s nuts.
We had to show proof of funds to the foreign government for our DD’s semester abroad.