This will be my first sale and running into a little problem, My client listed his house for sale about 3 weeks ago so his family could start looking for a bigger home, they where not in a hurry then, well I found them a bigger home an they out a offer in and it was accepted. Now their letter from the bank says contigent on the sell of their first home. We have the home listed at 139,900 Comps suggested around 137,000. I have been sending post cards out and on open house number 2 etc. etc. They dont want to lower the price but want me to cut my commission (7%) down to around (5%)I said then I would have to cut the commission for the buyers agent and asked where would they like me to cut their marketing efforts at. Bottom line how can I move this house so the other deal can go thru? Other house 164,500. pre approval for 180,000.00 they didnt put contigent on sell of their home in the purchase contract offer, its just on pre approval now.
please give me any feedback and ideas. Closing date set for 4/28
THANKS
MARK

Sounds like a problem. I'd talk with your broker/manager and see how they want to deal with this situation. Why didn't they activate the Contingent on Sale addendum on their purchase offer?

I see a few issues:

1) If the Purchase Contract is not contingent on the sale of the house then your customers could lose any escrow money if they can't perform. I had the same exact scenario with an agent. They couldn't obtain financing because the house hadn't sold but the contract wasn't contingent on the sale of the house. The sellers made a request for the $5,000 binder & won. This is FL & it may be different in your state

2) I may get a A LOT of flack for saying this, but if I was getting 2 deals out of this (selling house & them buying one from me too)..I would probably reduce my commission to help them out.

3) I don't know the market there so I can't even venture a guess as to why the house hasn't sold. It sounds like the price is right but does the condition of the house warrant the asking price? How many showings have there been? Have you gotten any feedback from agents that have shown it?

The greatest impact for thier money will be to raise the Buyer's side commission.

An extra $1400 to the buyer's agent is signifcant and could create extra traffic and a contract.

$1400 off the price of the home is about $7-9/mo. for the Buyer.

A bird in the hand is better than two in the bush!

Thanks for mentioning that. I meant to say that but forgot with evrything else I was writing.

As far as reducing your commission.. I always tell the seller that we can look at reducing the commission when we receive an offer because you may reduce the price by a $2,00 but maybe receive an offer above the asking price. So I would keep it at 7%, raise the buyer's side or offer a "bonus" to the selling agent and then see what the seller nets before you decide on lowering your commission.

http://www.nationalwealthmortgage.com/122 Check out this website. Not only do we help, but we help you help others.

Do you have financial contigency on the contract? If so then I would take the lender's dis-approval and void the contract.
If time has laps then best bet for your folks will be give up some $$$ from the sales price and move on with their lifes.
Can they take a bridge loan and settled on their new home? It will cost them more upfront but may be worth rather then losing escrow money.

Other option will be depending on what other cotigencies you have remaining on the contract you can void the contract.
But as their Realtor I would still try to get them to some agreeable terms before they write on another home or void the contract on this home.

Good Luck!
Ritu

Good move Mark on telling them off,we teach people how to treat us,if sellers get the idea they can overprice,buy before selling and all is okay because the agent can just give away there commission we are in for a world of hurt.

You wouldn't be in this position if you had made them put a clause in there on the buying offer "subject to a suitable offer and the sale of existing property".

The owner of the property they want to buy might have never accepted if it was a contingency contract"they hate those".

Your inexperience got you here and i would definitely talk to your broker about it.It soundsl like it was your mistake by not telling them they had to do the contigency and if they didn't making them sign an agreement understanding they might lose any earnest money and might be sued for specific performance for not going through with the contract.

If they say it's your fault and make it right,you are probabaly in a real pickle here as since you are a new agent your broker probably gets a fat cut of your commision.

Did you show them the pie chart example?Take a pie chart coded into different colors showing the listing side commission,taxes to uncle sam,and marketing to sell there home,realtors dues and fees,then show the timy little sliver that's left over for your commission.Usually once they see how little we make they understand you can't discount and that the only thing you could take away from is the marketing of there home.

If all else fails i would ask your broker to reduce his cut of the commission to help you out of this jam where you still make some money,they may or may not go for it but all they can say is no.good luck

P.S.You can say they weren't financed to get out of it that way but the seller might request from the lender a denial letter and why would the lender do that when they are going to get paid on the deal?

Offering a credit at closing for the closing costs can sometimes sway first time buyers towards the purchase of a home even if the sale price is a bit high as first time buyers are often short on cash. If your seller kick in the closing credit and you shift some of your commission over to the buy side, then that should help gain attention from both buyer agents and buyer clients.

Mark,
Has the other listing agent asked for a copy of the pre-approval? If the agent has it then they should be aware that this deal has become a subject to sale at the lenders insistance.

You just need to sit down with them and do some net to sellers sheets showing various price points. Ask them how badly they want the other house! Tell then they need to drop the list to $137K and you will offer a $2K bonus to any buyers agent bringing in an accepted offer by X date. IF they agree then do some flyers and distribute them to every brokerage office in your area.

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