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Selling my condo (STT) question

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islandjoan
(@islandjoan)
Trusted Member

If the bank's appraisal is the only one that counts, then why does the buyer have to pay to have an appraisal done?
Or is that considered to be the bank's appraisal?

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Posted : May 16, 2014 5:13 pm
JulieKay
(@JulieKay)
Trusted Member

I remembered too - add in costs of continuing education and licensing. In Texas I know this is several thousand dollars per year.

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Posted : May 16, 2014 5:14 pm
JulieKay
(@JulieKay)
Trusted Member

Islandjoan, the buyer pays for the appraisal for their bank (mortgage). If a buyer is paying cash, the appraisal is optional but highly recommended for their assurance they are paying a fair price.

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Posted : May 16, 2014 5:16 pm
islandjoan
(@islandjoan)
Trusted Member

thanks JulieKay that's what I thought but just wasn't sure.

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Posted : May 16, 2014 6:20 pm
vicanuck
(@vicanuck)
Expert

So lets continue to break it down.

We have $24,000 split four ways = $6000.

On average, how much value can be attributed to these activities per transaction:

Gas Money
Lock Box
Creating the MLS Report
Taking/Uploading Pictures
Advertising
Making Appointments
Showing Property
Communicating with people
Keeping track of showings
Producing an open house
Negotiating the best deal
Finalizing details on a offer to purchase/contract
Helping the buyer/seller navigate thru to closing
Having keys in hand at the end of the day

I'm not an agent but there must be software to track all the time spent on these activities and the associated expenses ( a quick google search brought up several), otherwise, how would you know if you're making money or when to stop spending on a particular listing. The agency must provide some of these services to an agent to earn their 3% cut.

It would be interesting and enlightening to know so people will be more sensitive to what value they get for the 6% commission.

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Posted : May 16, 2014 6:22 pm
janeinstx
(@janeinstx)
Trusted Member

It's really not that complicated. If you think real estate agents aren't worth their fees do it your self!

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Posted : May 16, 2014 6:37 pm
JulieKay
(@JulieKay)
Trusted Member

It's really not that complicated. If you think real estate agents aren't worth their fees do it your self!

Yep. "For Sale By Owner" is always an option.

And it goes both ways. I've chosen to never work for jerks. It has to be positive for both my client and me - and it has served me really well over the years. *wink*

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Posted : May 16, 2014 7:11 pm
Afriend
(@afriend)
Trusted Member

Yes, you'll hear anecdotal stories of people who have used Real Estate agents to sell their homes and paid the less than the going rate but you'll hear more stories were the results were unsuccessful. It's simply not a good idea to skimp on paying a Real Estate agent's fee.

As others have said, you get what you pay for. In my 40+ years in business I've sold about 150 properties (both residential and commercial) on behalf of my employers and I've always found the RE agents did, in fact, earn their fee and it was always the going rate with two exceptions that were properties that sold for over $40 million where I did negotiate a "capped rate". All the others ranged from around $125,000 to $4 million.

Think of it this way: Let's say you are working for company "A" at a salary of $1,000/week. Your boss comes in one day and says he wants you to work in the same position for the same hours but he only wants to pay you $800/week. Meanwhile company "B" next door has the same positions available and pays it's employees $1,000/week. Ask yourself how long/hard would you continue to work for company "A"? It's no different with Real Estate agents. How hard do you think they will work for you if you pay them less that your neighbor?

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Posted : May 16, 2014 8:35 pm
gonetropo
(@gonetropo)
Advanced Member

We presently have our homes on the market and the experience has been interesting here on STX.
The property is spectacular and we have priced it competitively. It has been on the market since mid November but we have not shown it for about 1.5 months during that time.

We have had 14 showings to date and a couple of offers. IMO, just a lot of tire kickers but no one willing or having the ability to purchase. We have been charting the MLS for 6 months and only 1 property within $200K of ours, on the low side, has gone under contract.
So, all of the people who have toured our property have NOT purchased anything else, at least in the same price range.

This market is dismal at best. The sweet spot on sales seems to be in the under $400K range. Glad we don't need to sell or really want to sell.

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Posted : May 17, 2014 9:29 am
caribstx
(@caribstx)
Trusted Member

Vicanuck seems to have struck a nerve since the agents aren't taking the bait on disclosing their "costs" that are subtracted from commissions, most of which are deductible expenses or covered by the agency fee. Very interesting!

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Posted : May 19, 2014 1:24 pm
vicanuck
(@vicanuck)
Expert

I wasn't trying to strike a nerve with anyone, just interested in what factors affect commission.

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Posted : May 19, 2014 2:30 pm
JulieKay
(@JulieKay)
Trusted Member

Vicanuck seems to have struck a nerve since the agents aren't taking the bait on disclosing their "costs" that are subtracted from commissions, most of which are deductible expenses or covered by the agency fee. Very interesting!

Wrong, they are not all deductible and most are not paid by the agency fee. What a silly conclusion to jump to with no knowledge.

I imagine it's that, like most people, they don't want to be grilled to justify their value, or; it's not worth the work to compile for someone who just wants to pick them apart anyway.

If you don't want to pay for the expertise of a Realtor (or lawyer or consultant) don't hire one. You can always go it on your own.

Vicanuck I didn't read your original post as insulting. 🙂

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Posted : May 19, 2014 4:58 pm
caribstx
(@caribstx)
Trusted Member

Of course expenses are deductible from income! Are RE agents different from other commissioned sales people?

Here’s a checklist of common expenses for real estate agents and brokers from http://www.inman.com/2011/02/18/a-tax-deductions-checklist-real-estate-professionals/#.U3prpNJdV8E that you can use to make sure you don’t miss any deductions this year:

advertising expenses, including websites, mailing lists, newspaper advertising, fliers, online advertising, postcards, promotional materials, logo clothing, and anything else you pay for to market your real estate business;
bookkeeping, accounting and legal fees;
business gifts (up to $25);
business meals and entertainment (only 50 percent deductible);
cab fares for business travel;
car and truck expenses, including business mileage, depreciation, insurance, interest on car loans, lease payments, license plate fees, parking expenses, and tolls;
cell phones;
computer software;
computers;
desk fees;
education to maintain or improve required skills (but not courses you take to pass the real estate licensing exam);
home office expenses (if you qualify);
insurance, including health insurance, errors and omissions insurance, business liability insurance, and business equipment insurance;
interest, such as interest for business loans, interest paid on business credit cards;
Internet access fees;
map books;
office equipment (cost may be deducted in one year using bonus depreciation or IRC Section 179);
office expenses, including rent, cleaning and maintenance, and utilities;
office supplies;
postage;
professional dues and fees — for example, multiple listing service dues and dues paid to the local Chamber of Commerce, Realtor associations, and real estate license renewal fees;
referral fees and commission rebates;
retirement plan contributions;
subscriptions to professional journals;
real estate franchise fees;
taxes, including payroll taxes for employees, state and local business taxes;
telephone service fees;
travel to business conventions, including transportation, lodging and food;
wages and benefits paid to employees

So, there you go!

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Posted : May 19, 2014 8:39 pm
JulieKay
(@JulieKay)
Trusted Member

Please show me where any of the items vicanuck or alana33 listed are on your list of tax-deductible items, other than gas and buying a lock-box. Vicanuck didn't ask anything about the "costs" of being a Realtor in the first place - you did. Vicanuck's primary question was about time. I don't think anyone here argues about hard costs, such as desk space and MLS fees. So your list is superfluous and not what was being discussed here.

And just because an expense on your list (which is not what we were discussing) is tax-deductible doesn't make it *free* - it is still an expense, albeit a tax-deductible one. It is still buying a sign vs. buying a sandwich.

If you'd like to calculate an hourly rate for a Realtor please go ahead - I would say in the last 7 months our Realtor has put in about 150 - 175 hours with us.

But again - if you don't want to pay to hire an expert - and that's what you're paying for, *expertise* - then don't. You can always do it yourself.

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Posted : May 21, 2014 12:25 pm
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