I have a girlfriend who is in deep financial doo-doo. She's liquidating her stuff, including her custom $700,000 home right on a popular park in Denver. She's upside down in the house, with just enough equity to pay a co-op fee if she FSBOs the house. A few days ago, she called me to ask for my advice on a few issues, which I was happy to give. She apologized for not hiring me to sell her home, but I told her not to worry... things are tough all over. I assured her I"d be there for her if she needed any help.

So, the next morning, I woke up with an incredibly strong desire to list her house for free. I tried to fight the feeling, but it wouldn't go away. After a few hours of thought, I called her up and made my offer, which she gratefully accepted.

Is there an upside for me? Sure, it's a marketable house in a very visible location. But I don't think that's why I'm doing it. I really just want to help her and I feel amazingly good about being able to...

Just thought I'd share... I'll let you know how it goes.

Hi Jennifer,

By 'free' you mean that your seller will have to pay co-op comission to the buyer's agent, right?

What if you find a buyer, will you forgo your commission entirely?

I think this is a bad idea (unless you are really hurting for sales), because:

1 - if things go wrong, you'd still be blamed, but you won't have any financial reward.

2 - you have set up a bad precedent. For any other mutual friends may say: "Hey Jennifer, can you sell my house as you sold "so and so's" house?

Right - the buyer agent will get paid. Here in Denver, the buyer agent's percentage is pretty much set - in other words, we don't "split" our listing fee - we pay out the same amount pretty much every time regardless of what we negotiated as a percentage for ourselves.

If I find the buyer, I will get the full co-op.

I can live with the risk of things going wrong...all in a day's work.

I'm not worried about the precedent. My seller wouldn't dream of bragging about her "deal" with me; she's trying to keep the situation very quiet so as not to damage her own professional credibility.

You'll make a referral fountain for life- probably- is the upside!

I bet you end up bringing a buyer... a karmic reward, as it were.

-jeff

Jeffo - Yeah, I imagine that will happen - the good karma thing... oh, and something else I didn't mention - if it comes to the point of a short sale, which it might, I will get to charge a full commission.

You're doing a good deed for someone else. This is your friend. I would do the same thing in your situation.

Hold a few open houses and you might find a few million dollar buyers. Write a blog post about the property and you will have people contacting you for similiar properties. This house can be a jumping board for other sales.

Good for you.

Why am I not surprised, Jennifer?

I think it's a marvelous thing and I'm glad you are able to do this for your friend.

One of the great perks to our chosen occupation is the ability to make decisions like this. We truly are "independent contractors". So many times we work for free. We research information for other's benefit. We get to enjoy sharing our knowledge. Everything doesn't have to be about "making a buck".

I've talked with Lawyers who enjoy doing pro bono work more than the stuff they get paid for. Same with Doctors who travel to third world countries and do charity work.

When we really enjoy what we're doing, it shows. It also attracts people that want to be with us.....

Jennifer how do you know how much she owes???

Often times when I helped people for years in these situations they always thought there mortgage statement was there balance.

In almost all cases the payoff had late payments,penalties,attornies fees,etc. which inflated the payoff amount so they are usually more upside down than originally thought.

Does she have a payoff statement good for 30 to 45 days from the bank??

From what you are saying I beleive you are looking at a short sale.If she gets full price and breaks even I don't see it happening.

If she has assetts she might be better of coming to closing and paying a little money to not do the short sale and not ruin here credit.Example she gets an offer of 680,000 and has to bring 20k to closing but it's better than doing th eshort sale.If she has assetts the bank will usually persue those unless she signs a promissory note promising to pay the difference.

If she has to do a short sale she wouldn't have to worry about taxes on the loss as the new bill for primary residences wipes that out for IRS purposes.

I would go ahead and have everything lined up for the potential short sale so when the option is needed most of the groundwork is completed.

Super - my client is a mortgage broker so she has a good handle on her payoff, but yes, she (and I) are well aware of the potential for a short sale. In fact, she's doing her own due diligence into the matter today before she decides for sure about listing it with me - because she does not want to put me into an unexpectedly stressful situation.

The problem with getting everything lined up for a short sale is that she is current on her payments at this point; therefore neither of her lenders will even discuss it with her.

We basically are working for free when we take a new listing. You don't get paid until it sells. Good luck to you Jennifer. I believe in karma, and you will get it back in tenfolds.

Yes generally they won't even consider a shortsale until you are at least 3 months behind.

The reason is they are getting current mortgage payments so there is no reason to.It's just like a due on sale clause banks could care less who is paying as long as they get the check every month.

She sould probably try to restructure the debt.Sometimes the lender will freeze or reduce the interest rate or take a payment and add it onto the the backend of the loan.I used to do these workouts and since she is a mortgage person I would let her go through all of that before getting you involved.

Probably if she didn't have cash the best thing to do is say the loan balance was 700k and she got an offer for 680 to convince the bank to release the lien and she signs a note to pay off the other 20k in acertain time with a balloon due at the end.

This would preserve credit and get rid of most of the debt allowing her to get a more affordable place.There are many options and I hope it works out.

I understand the concerns of some of the posters, points well taken. With that being said, I think what you are doing is awesome. There is a reason why you had a strong desire to do this, you may not know what it is now, but down the road, the reason will present itself.

Good for you. Karma - it comes around.

Listing is in the air, it seems. I listed 1.88 million in the last couple days!

(most of that is a 1.5 mil piece of land that is gonna be hard to sell, though...)

Sure gets the imagination going to think what it'd be like to SELL a listing that size! Especially bringing a buyer. $75k. Cabo, here I come <g>!

Uh... hope I didn't just slime your thread, Jennifer! :-)

Go, Jeffo!!!!

Still coming to Denver this fall? Or will your listings keep you too busy?