Hello All,
I have a short sale that I going to negotiate, given referred to me by a realtor. I understand the realtor gets paid on the hud A-B transaction, but how do I compensate the realtor on the B-C transaction? Do I need to have a commission agreement? Any help is appreciated.
My question here would be is the Realtor asking for double compensation? That would be paying the Realtor twice. If you want to pay them twice I would have the Realtor do both contracts I guess. I would pay them on one or the other not both. I guess if the commission was low because of the Short Sale you could always pay on both. I have been doing this for years and have never seen someone pay the Realtor 2 times. On a $200,000 dollar house at 3% that means you are paying $12,000 and if there is another agent involved you would be paying as much as $18,000. I don’t know if you heard about this or not the economy is not really good right now I would hold on to as much as you can.
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Hi Enigmaus, I’m assuming you are acting as an investor and not a realtor on this deal. If so, on the b to c closing you can always pay the realtor a bonus for bringing you the deal. Just put the bonus on the buyer’s side of the HUD but I agree with Summit that you should not offer them double commission!
Michelle
Thanks for the advice. Yes I am the investor not the realtor. I just was not sure how to go about paying the realtor on the B-C transaction. It makes sense now.
EnigmasUS,
I’m a Realtor and have been involved in transactions like this…I’ve been schooled on both sides. First, from the Realtor side, I’ve been told that each transaction is a separate transaction and it’s like pulling a tooth, and then pulling a second tooth. One doesn’t get a cheaper rate for the second tooth…
But I have always thought that the client should get a discount in real estate for each transaction. I usually tell my clients that each transaction, for repeat business, the commission goes down. Maybe 3% for the first, 2.5 for the second and for one client that has purchased 11 homes, I actually only charge that person a $500 fee.
As someone said, maybe a bonus for the Realtor…I don’t have a problem with that concept either…It should be left up to what the client and the Realtor are willing to do…I’d say ask the Realtor what he’d do? If he’s not willing to lower his rate and give you a discount, find another agent…
Personally, I try to show my clients that I want them back and I do that by giving them a discount for repeat business…unlike the Dentist example above…Hope this gives you some food for thought…
Hi ken… This reminded me of the times I walked into my office with hundred dollar bills and passed them out in envelopes to unexpecting employees…
Ever go into a grocery store on Thanksgiving and buy everyone groceries? During some of my boot camps I would give money to attendees to give a way at night so they could feel what it felt like to give…
Compensation is a strange topic to understand… Most of us pay less because we cant pay more… As a person who has been on both side of that equation paying more is much more fun…
So the question to the poster isnt how much to pay or not but why havent you put yourself in a position to be able to pay?
MQ,
There was a time when I could do a lot more and did, but because of both of our illnesses (wife recent diagnoses with MS, my diabetes and recent stroke and no health insurance), I find it harder and harder to do, but I’d advise anyone that they can afford to do this one…I went into a Subway and saw three police officers. I could see what they were eating and could easily see that their meals totaled less than $20. I walked over to the table and laid down a $20 and said thanks. That was the best $20 I ever spent and to be honest, did more for my health than any trip I could have made to the Doctor…
If anyone wants a true high, try it sometime…I know there are some on this panel that know exactly what I mean…By the way, that was about a year ago and today, my oldest son has become a Dallas Police Officer…Guys that $20 has multiplied more than most can ever imagine.
EnigmaUS,
We pay 6-8% paid on the second transaction, so the agent that helped us purchase the property might get 2% on the buy and then did a 4% split on the resale with another Realtor. The entire amount would be paid on the 2nd transaction.
smit