My friend told me that if I listed my own home, Realtors with buyers will do all the work and I wont have to pay them? Is that true? It doesn’t sound right.

Thanks Bill for email.

“If it sounds too good to be true than it is”. I a homeowner lists their own home we refer to that in the industry as a FSBO (for sale by owner) 90% of the time a FSBO will offer to work with buyers agents. This means if and agent brings a buyer, the seller will agree to pay a compensation in the form of a commission to the buyers agent. In the case of the other 10% they say they will not work with an agent and compensation is between the buyer and their client.

It doesn’t sound right because, the FSBO who does not want to work with the buyers agent, puts all of the exposure on performance on the buyers agent who is now obligated to represent their clients interests and be fair to the FSBO making sure that contracts are explained and understood, procedures are followed, time lines met and that the seller complies with any additional addendum or requirements of the sale (such as repairs etc.) As a professional real estate agent, Realtor®, I would make sure all of this is done and have an agreement with my client that they pay me compensation for my representation.

At the end of the day the compensation is being generated by what they are willing to pay for the home so in the end the seller is ultimately paying for the compensation depending on sales price because his net proceeds is a reflection of what the buyer is willing to pay GROSS. Hope that makes sense!

Look Realtors® are like all professionals. They need to work to provide for their families. A commission is a % of transactions proceeds. Much like the sales of any item you purchase has some accommodation for profit over and above the cost of goods that a vendor is selling. From the “profit” there is a “gross profit” and a net “profit”. If a Realtor® generates $1000 in commission, they need to set aside federal and state taxes, deduct expenses directly related to that transaction & deduct brokerage fees (each broker has a fee schedule that they charge each agent on each transaction) so their net is going to much less than that of the whole amount.

As a Realtors® business and volume grow they also have an increase in expenses for advertising, infrastructure, assistance, office/storage space, travel, advertising for a realtor is working and marketing 7 days a week.

If you get buyers agents that don’t want to coordinate a deal if a FSBO is not working with agents don’t think of them bad agents. It is a lot of exposure legally if something is to go wrong and a lit of pressure treating all parties fairly while maintaining the fiduciary relation ship of their client. If everyone works with one another the trans action will be smoother and chances are there will be less issues resulting from unmet expectations or lack of understanding of the contract and its terms.

I strongly suggest if you are selling your own home that you spend a little money having an experienced real estate attorney look at any contract that is presented for you to sign.

Hope this answers your question Bill. I hope that you have a successful transaction. Don t forget to consult with an reputable full service real estate broker in your area to see all of the services that they can provide for you as your listing agents, Realtor® representative.

Let me know if you need a referral or have any further questions.

Regards

Bob Kenney, Realtor®

Reilly Realtors

Mobile/Text: 512-922-4922

I think there is an issue with a home I like, how can I check it out before I agree to agree to purchase the home?

Hi Vivian,

First thing you should do is have your real estate agent, Realtor®, ask the sellers agent or the seller if for sale by owner for a copy of the sellers disclosure. Read this document carefully as it should have information on any material issues that the home may have had since the current owner has owned the home. A lot of people are skeptical about the disclosure but as professional Realtor® we encourage the home owner , as listing agent, to fill out the disclosure with all the facts. The penalty in Texas for non disclosure of an issue is stiff and dates from time of discovery about a non disclosed issue.

In Texas we have what is called a Termination Option period. It gives the buyer the unrestricted right to cancel the contract with out penalty through the term of the option period.. It is negotiated with each home sale. This is the point the buyers have to inspect the property and decide if the property is right for them.

If there is something you just do not feel is right about the property and it is not on the sellers disclosure then this is the period you want to investigate. Most home owners will not let you do inspections on their property if you are not under contract because if there are unknown issues discovered they would then be obligated to disclose the issue to the next buyer if you chose not to buy the home.

Different states have different rules but most states allow for inspections of property after a home goes under contract. Please contact a real estate professional in your area for assistance and don’t let the home go to someone else if you feel it is the right one.

If you are in Texas and need assistance. Give me a call I will be glad to represent you or refer you to a Realtor® in your home town that can represent you.

Regards

Bob Kenney, Realtor®

Reilly Realtors

Mobile/Text - 512-922-4922

I have a home that is under contract to be sold and it was broken into last night! will this affect the sale of the home?

I know a real estate agent that is inquiring about what they should do about a vacant listing that is under contract that got broken into and is scheduled to close in 10 days.

First time she has encountered this and was not sure if it was going to make the sale questionable.

OK if I was in the situation 1^st thing I would do is contact the seller and advise them of the situation. Have them contact police and file a report then contact their insurance company to report the break in and request they send an adjuster to the property.

In this case the seller canceled his homeowners insurance when they moved out! Please never cancel coverage on a property you own till the property has closed! This is just one of many scenarios that could happen to a home while it is under contract and having coverage on the property for incidents such as this case or in the case of one of my clients where there was a severe water leak from water heater that resulted in $50,000 damage.

In all these scenarios there is one golden rule. Inform and disclose all issues to all parties as soon as possible. In Texas there is a clause dealing with property condition at time of sale. In the case of the break in the seller has the right to repair the damage to the same or better condition that it was in at the time the contract was effective.

There are all kinds of things that can happen to people and property during a sales contract. 1^st thing all the parties involved in the transaction have to remember is that most issues can be resolved as long as everyone is involved in the facts and have access to any information about the incident.

So 2 important lessons

A) Never cancel insurance on a property till the property closes. Talk to your insurance company explain facts. If you move out prior to sale you may be able to adjust the coverage on the home to cover structure but may not need the personal property coverage anymore. Take an experts advice!

B) disclose, disclose, disclose – honesty and a clear representation of the facts are the best remedy for all issues that may arise during a sales contract.

Regards,

Bob Kenney, Realtor®

Mobile/Text: 512-922-4922

What is the difference between a Realtor® and a buyers agent?

Good morning Marty,

Real estate agents are licensed by the state in which they offer their services, there is not a specific buyers or listing agent license only there are agents that prefer to specialize on both sides. If an agent joins NAR (National Association of Realtors®) they are eligible to use the designation Realtor®.

There are agents that are licensed in their respective states, either as agents or brokers, who choose not to belong to NAR so they do not have the right to use the designation Realtor®.

I am licensed in the state of Texas and I belong to NAR. So I am licensed real estate agent and Realtor®. If you are dealing with an agent that uses Buyers Agent and not Realtor® as part of their designation then chances are that they do not belong to NAR. They may use ABA or accredited buyers agent but in order to have that designation they need to belong to NAR as well.

All Realtors can either be buyers or sellers (listing) agents. 15+ years ago most markets had only one kind of agent. Sellers agents and all agents worked for the seller and earned their commissions by representing the sellers. In late 1990's the advent of the “Buyers Agent” came along and I think it was a good thing for the real estate industry as a whole.

In most markets throughout the US you now have agents that represent just one side of the transaction. The seller still offers compensation in the form of a commission , in most cases, the commission is always paid to the listing broker as a whole amount and the listing broker then splits the whole commission with the buyers broker.

I use the term Broker because in Texas all agents that sell real estate must hold their license under a named broker in order to legally transact business. So the agents have a independent contractors association with the brokers. All contracts , listing agreements and buyers representations are IP of the broker with the agent as the representative of the broker. Confusing yes but the broker is held to a higher count of responsibility and must represent the agents should there be any kind of legal actions or disputes with other brokers/agents.

Those agents that act as buyer agents do so for a number of reasons. It could be they are just good in dealing with people and can convert leads to clients better than they can convert someone thinking about selling their homes to a listing. Could be that a broker hires that agent specifically so the agent works with buyers only in order to hone their representation skills.

So I guess that was a long answer. Do not feel compelled to work with a agent just because they say the specialize with buyers. Although there are agents that just list homes as a business model I would guess that 85% of licensed real estate agents are excellent representatives of both sellers and buyers in any given transaction. Call me if you have any further questions!

Bob kenney, Realtor® Mobile/Text: 512-922-4922