Warning

 

Close

Confirm Action

Are you sure you wish to do this?

Confirm Cancel
Member Login

Site Notices
Posted: 1/7/2012 10:59:33 AM EST
It's time for yet another real estate thread.


We're down making an offer - on land with clear title, been in the family for several generations, boundaries are clearly marked and not in dispute, mineral rights aren't known but there's no record of them back several decades (so if anyone did own them, if I understand TN law they have lost them by not recording a claim to them in the last 20 years or so).

We know what we want - tract XYZ, no covenant restrictions (the area was subdivided but none has ever sold, owner has agreed to remove covenants), we're going to offer price of XX,000. Our lender has preapproved us beyond what we're willing to pay for the tracts, all we know that we need is a lawyer to draw up the sale and our lender to approve it.

Here's the specific question: Seller's agent gave us the option in her contract form of us using her as a disclosed dual agent, or something to that effect. Or we can buy with no agent on our side. Or we can hire an agent to represent us.

Having never done this before, I'm stumped. I had no idea this was so complicated.


Do I just make an offer, do I go hire a buyer's agent, or do I let the realtor be a disclosed dual agent?

Link Posted: 1/7/2012 11:41:40 AM EST
[Last Edit: 1/7/2012 12:06:53 PM EST by Kevyn]
Originally Posted By arowneragain:
It's time for yet another real estate thread.


We're down making an offer - on land with clear title, been in the family for several generations, boundaries are clearly marked and not in dispute, mineral rights aren't known but there's no record of them back several decades (so if anyone did own them, if I understand TN law they have lost them by not recording a claim to them in the last 20 years or so).

We know what we want - tract XYZ, no covenant restrictions (the area was subdivided but none has ever sold, owner has agreed to remove covenants), we're going to offer price of XX,000. Our lender has preapproved us beyond what we're willing to pay for the tracts, all we know that we need is a lawyer to draw up the sale and our lender to approve it.

Here's the specific question: Seller's agent gave us the option in her contract form of us using her as a disclosed dual agent, or something to that effect. Or we can buy with no agent on our side. Or we can hire an agent to represent us.

Having never done this before, I'm stumped. I had no idea this was so complicated.


Do I just make an offer, do I go hire a buyer's agent, or do I let the realtor be a disclosed dual agent?



...
Or we can hire an agent to represent us.


That part is very confusing... yes, you are free to hire an agent to represent you but there should be provisions within the listing agreement that provide a commission for any agent that brings a buyer to the contract; you could have been 'shopping' with an agent, the agent found the parcel for you and is representing you for the purchase...

On another hand, when you contacted the listing agent without having a designated buyers agent, that may have affected some aspect of the agency agreements.

However, you mentioned having a lawyer draw up the contract for purchase. You would make a private contract with the lawyer and be paying the lawyer from your pocket. At this point, the listing agency may be in line to collect all the listing agreement fees because there's no other 'real estate agency' in line to collect a portion of the commissions paid by the seller.

Personally, I would contact a real estate company with no affiliation to the sellers company and work through the agency situation with them. Or, if you've already been in contact with a real estate lawyer and have any sort of contractual agreement with them, ask them to explain the relevant laws governing real estate 'agency' and how the situation is affecting your deal specifically.

I would get a designated buyers agent. You do not want any agency from the listing side. Any agent representing you will collect their compensation at the closing from the listing fees the seller has agreed to pay the real estate company selling the property. You should not have to pay a buyers agent from your own pocket––- the buyers agent gets paid from fees the seller has agreed to pay at the closing table.

Both agents are paid from the sellers listing agreement fees.

You may as well have an agent representing you who will owe you fiduciary responsibility versus an agent who owes the seller fiduciary responsibility.

Link Posted: 1/7/2012 11:43:14 AM EST
Hire a real estate attorney to represent you at closing it will be $2-500 of the best money you ever spent . Title insurance is cheap as well and may be a good move.
Link Posted: 1/7/2012 11:43:28 AM EST
Link Posted: 1/7/2012 11:46:19 AM EST

Originally Posted By Kevyn:
Originally Posted By arowneragain:
It's time for yet another real estate thread.


We're down making an offer - on land with clear title, been in the family for several generations, boundaries are clearly marked and not in dispute, mineral rights aren't known but there's no record of them back several decades (so if anyone did own them, if I understand TN law they have lost them by not recording a claim to them in the last 20 years or so).

We know what we want - tract XYZ, no covenant restrictions (the area was subdivided but none has ever sold, owner has agreed to remove covenants), we're going to offer price of XX,000. Our lender has preapproved us beyond what we're willing to pay for the tracts, all we know that we need is a lawyer to draw up the sale and our lender to approve it.

Here's the specific question: Seller's agent gave us the option in her contract form of us using her as a disclosed dual agent, or something to that effect. Or we can buy with no agent on our side. Or we can hire an agent to represent us.

Having never done this before, I'm stumped. I had no idea this was so complicated.


Do I just make an offer, do I go hire a buyer's agent, or do I let the realtor be a disclosed dual agent?



Get a designated buyers agent. You do not want any agency from the listing side.

Both agents are paid from the sellers listing agreement fee. You may as well have an agent representing you who will owe you fiduciary responsibility versus an agent who owes the seller fiduciary responsibility.


This and get title insurance. There's no way that you can be assured that the title is clean. The first house I tried to buy wound up with a 2 million dollar lien on it and guy didn't have title insurance. Sucks for both of us but I had to walk away because they couldn't clear the title.
Link Posted: 1/7/2012 11:47:01 AM EST
[Last Edit: 1/7/2012 2:04:40 PM EST by Bubbatheredneck]
Is the land listed with an agent?

If so, they will get the full commission on the land. Around here, raw land has a commission of 8-10%.

So, on a $100,000 piece of property, the agent will make 8-10K.

BUT if you have an agent, they generally get half of that.

So, have a chat with the agent before making an offer. Ask him to knock down his fees, and thus the price to you goes down too.

He makes less, you pay less.

If he doesn't, go find a buyers agent and then he gets even less.

Tell him it is either A or B

Assuming 10% commission on 100,000 piece of land

A. He can knock the price down 3500 to 96500 and only take 6500 in commission and seller clears 90,000

B. He can refuse. You get an agent that will agree to split the fee with you. You buy for 100,000, listing agent gets 5K (looses out on 1500 from deal A), your agent gets 5K and yall split it however yall decide after closing. Seller still clears 90K. Only loser is listing agent.

I did this on my house. Listing agent refused to budge on fees, but we knew about what seller wanted out of the house via mutual friends. Fine. Called a friend and used her as my agent. Listing agent was pissed because she was counting on keeping the entire commission.

Oh well, got greedy and therefore got burned.
Link Posted: 1/7/2012 11:47:11 AM EST
Originally Posted By arowneragain:

Having never done this before, I'm stumped. I had no idea this was so complicated.



For real, right?

Not knowing much more than that, good luck!!!
Link Posted: 1/7/2012 11:52:23 AM EST
This - agents not needed, good settlement attorney. +2 on title insurance, cause you never know and if there is a dispute, they cover the costs and its worth the money.

Originally Posted By whiskerz:
Hire a real estate attorney to represent you at closing it will be $2-500 of the best money you ever spent . Title insurance is cheap as well and may be a good move.


Link Posted: 1/7/2012 12:14:53 PM EST
[Last Edit: 1/7/2012 12:22:52 PM EST by Kevyn]
Originally Posted By whiskerz:
Hire a real estate attorney to represent you at closing it will be $2-500 of the best money you ever spent . Title insurance is cheap as well and may be a good move.


If your state requires that you be represented by a real estate attorney, so much the merrier.

No real estate 'deal' should ever be conducted without title insurance from the best title insurance agency you can find. Title insurance and a stake survey will give you peace of mind and the force of law should anything ever arise to challenge your ownership.

The money you pay for the survey and insurance are the best money you'll ever spend to guarantee your claim and your borders.

No agent worth their commission or lawyer will allow you to close without clear title and undisputed borders.

No matter how clearly YOU think those borders are marked, until they've been surveyed, staked and recorded by a licensed surveyor, there's opportunity for mischief. You may lose an acre here or there or you may gain some but it's absolutely necessary to know without question where you land is in relation to surrounding land owned by others. If there's a border dispute ANYWHERE along the line, better to clear it up before closing than to deal with it after.

There's good reason for the ancient wisdom... Good Fences Make Good Neighbors.

Link Posted: 1/7/2012 12:25:36 PM EST
Originally Posted By Garand_Shooter:
Originally Posted By Kevyn:
Originally Posted By arowneragain:
It's time for yet another real estate thread.


We're down making an offer - on land with clear title, been in the family for several generations, boundaries are clearly marked and not in dispute, mineral rights aren't known but there's no record of them back several decades (so if anyone did own them, if I understand TN law they have lost them by not recording a claim to them in the last 20 years or so).

We know what we want - tract XYZ, no covenant restrictions (the area was subdivided but none has ever sold, owner has agreed to remove covenants), we're going to offer price of XX,000. Our lender has preapproved us beyond what we're willing to pay for the tracts, all we know that we need is a lawyer to draw up the sale and our lender to approve it.

Here's the specific question: Seller's agent gave us the option in her contract form of us using her as a disclosed dual agent, or something to that effect. Or we can buy with no agent on our side. Or we can hire an agent to represent us.

Having never done this before, I'm stumped. I had no idea this was so complicated.


Do I just make an offer, do I go hire a buyer's agent, or do I let the realtor be a disclosed dual agent?



Get a designated buyers agent. You do not want any agency from the listing side.

Both agents are paid from the sellers listing agreement fee. You may as well have an agent representing you who will owe you fiduciary responsibility versus an agent who owes the seller fiduciary responsibility.



This. A buyers agent costs you nothing, and looks after your interests.


+1
Link Posted: 1/7/2012 12:37:38 PM EST
Thanks, guys.

The place does have a recent survey; most of the lines are still well-marked and the boundaries are quite clear (with one exception, where I think a pile of old treetops were left sitting on a corner).

So can I go ahead and make an offer with the provision that we'll be paying a real estate attorney to handle our end of the closing, or do I wait and make the offer after I have spoken to the real estate attorney?

There's a closing company in the nearest town from where the land is; they have a website and I actually have seen their office before when we used to live there.

So.....

Offer now with stipulation that the attorney-to-be-hired will have to approve everything, or
Offer later after speaking with attorney first.


? ?
Link Posted: 1/7/2012 12:39:21 PM EST
I'd get a agent, or at least an attorney.
Link Posted: 1/7/2012 1:15:40 PM EST
Originally Posted By arowneragain:
Thanks, guys.

The place does have a recent survey; most of the lines are still well-marked and the boundaries are quite clear (with one exception, where I think a pile of old treetops were left sitting on a corner).

So can I go ahead and make an offer with the provision that we'll be paying a real estate attorney to handle our end of the closing, or do I wait and make the offer after I have spoken to the real estate attorney?

There's a closing company in the nearest town from where the land is; they have a website and I actually have seen their office before when we used to live there.

So.....

Offer now with stipulation that the attorney-to-be-hired will have to approve everything, or
Offer later after speaking with attorney first.

??


DO NOTHING FURTHER ON YOUR OWN!

YOUR ATTORNEY WILL PREPARE AND PRESENT THE CONTRACT!

The contract should be presented to the sellers agent by either your real estate agent or your attorney. You know nothing about making a purchase offer. You know nothing about writing a legal contract. That's why you need either an agent representing your interests or a real estate attorney!

I know you're anxious to get the deal inked, but do not sign anything or make any verbal offers or discuss any aspect of the deal with the listing agent or the sellers.

Contact an attorney if that's what you want or contact a real estate agent not associated with the selling agency... make sure the agent has a lot of experience with 'land' sales because there are aspects of the sale different than either commercial or residential real estate contracts.



Link Posted: 1/7/2012 1:55:19 PM EST
I just finished year two cleaning up the mess after a guy who did the real estate transaction himself. Didn't know how to read a title policy, didn't keep any documentation, the escrow company closed and all but one person who needed to be contacted had died. That is why you get a lawyer.
Link Posted: 1/7/2012 2:05:43 PM EST
finished earlier post
Link Posted: 1/7/2012 2:12:47 PM EST
Originally Posted By olivers_AR:
This - agents not needed, good settlement attorney. +2 on title insurance, cause you never know and if there is a dispute, they cover the costs and its worth the money.

Originally Posted By whiskerz:
Hire a real estate attorney to represent you at closing it will be $2-500 of the best money you ever spent . Title insurance is cheap as well and may be a good move.




You do not need to pay an agent for what you have already done. You only need a legal contract in writing. A real estate attorney will help you with that. A title company will provide one for a fee if you need it. If you are asking these questions, please get the attorney to review your contract before you make the offer.
Link Posted: 1/7/2012 2:16:12 PM EST
I sold my last two houses without an agent, doing the For Sale By Owner thing. However, I did use a real estate attorney to draw up and review all the paperwork, and we did the closing at the attorney's office. All told, the attorney's fees were around $500 each time.

Unlike a real estate agent, a licensed attorney actually has the right to draw up new contracts, modify and void clauses, etc. A real estate agent is supposed to use pre-drawn, pre-approved, paperwork, and is very limited from a legal standpoint about what they can actually do on the contract. Every time I've bought a house, the agent implied that they could make changes just as well as an attorney. Well, if they screw it up, it's your problem. If your attorney screws up, he's responsible.

It's fascinating that an attorney, with a college degree and 3 years of law school, plus passing the bar, charges much less than a real estate agent. With only rare exceptions, I've never thought that a real estate agent does anything to merit a 6% commission.

I agree with the others that Title Insurance is well worth the expense. However, you can shop around, as rates vary significantly.
Link Posted: 1/7/2012 2:53:25 PM EST
Originally Posted By eastonj:
I sold my last two houses without an agent, doing the For Sale By Owner thing. However, I did use a real estate attorney to draw up and review all the paperwork, and we did the closing at the attorney's office. All told, the attorney's fees were around $500 each time.

Unlike a real estate agent, a licensed attorney actually has the right to draw up new contracts, modify and void clauses, etc. A real estate agent is supposed to use pre-drawn, pre-approved, paperwork, and is very limited from a legal standpoint about what they can actually do on the contract. Every time I've bought a house, the agent implied that they could make changes just as well as an attorney. Well, if they screw it up, it's your problem. If your attorney screws up, he's responsible.

It's fascinating that an attorney, with a college degree and 3 years of law school, plus passing the bar, charges much less than a real estate agent. With only rare exceptions, I've never thought that a real estate agent does anything to merit a 6% commission.

I agree with the others that Title Insurance is well worth the expense. However, you can shop around, as rates vary significantly.




Y'all are pushing me towards hiring the local title insurance/closing attorneys to help with this.

What does title insurance normally cost and what does it normally guarantee you?

Link Posted: 1/7/2012 2:58:15 PM EST

Originally Posted By arowneragain:
Originally Posted By eastonj:
<snip>

Y'all are pushing me towards hiring the local title insurance/closing attorneys to help with this.

What does title insurance normally cost and what does it normally guarantee you?


Briefly, title insurance protects you in the event that another party has leins or judgments against the property and you didn't know it. So, if another party claims that they actually have title, or a lein on the property, this would become your problem. With title insurance, it's the title insurance company's problem. They review land records and indexes, court records, etc., and indemnify you again any claims on the title.

Link Posted: 1/7/2012 3:00:02 PM EST
[Last Edit: 1/7/2012 3:00:18 PM EST by millfire517]

Originally Posted By eastonj:
I sold my last two houses without an agent, doing the For Sale By Owner thing. However, I did use a real estate attorney to draw up and review all the paperwork, and we did the closing at the attorney's office. All told, the attorney's fees were around $500 each time.

Unlike a real estate agent, a licensed attorney actually has the right to draw up new contracts, modify and void clauses, etc. A real estate agent is supposed to use pre-drawn, pre-approved, paperwork, and is very limited from a legal standpoint about what they can actually do on the contract. Every time I've bought a house, the agent implied that they could make changes just as well as an attorney. Well, if they screw it up, it's your problem. If your attorney screws up, he's responsible.

It's fascinating that an attorney, with a college degree and 3 years of law school, plus passing the bar, charges much less than a real estate agent. With only rare exceptions, I've never thought that a real estate agent does anything to merit a 6% commission.

I agree with the others that Title Insurance is well worth the expense. However, you can shop around, as rates vary significantly.

If the housing market doesn't improve in my area, either they are going to take less of a commission or I will be selling it by owner as well.
Link Posted: 1/7/2012 3:01:42 PM EST
Link Posted: 1/7/2012 8:00:02 PM EST
[Last Edit: 1/7/2012 8:09:08 PM EST by BillofRights]

Originally Posted By Bubbatheredneck:
Is the land listed with an agent?

If so, they will get the full commission on the land. Around here, raw land has a commission of 8-10%.

So, on a $100,000 piece of property, the agent will make 8-10K.

BUT if you have an agent, they generally get half of that.

So, have a chat with the agent before making an offer. Ask him to knock down his fees, and thus the price to you goes down too.

He makes less, you pay less.

If he doesn't, go find a buyers agent and then he gets even less.

Tell him it is either A or B

Assuming 10% commission on 100,000 piece of land

A. He can knock the price down 3500 to 96500 and only take 6500 in commission and seller clears 90,000

B. He can refuse. You get an agent that will agree to split the fee with you. You buy for 100,000, listing agent gets 5K (looses out on 1500 from deal A), your agent gets 5K and yall split it however yall decide after closing. Seller still clears 90K. Only loser is listing agent.

I did this on my house. Listing agent refused to budge on fees, but we knew about what seller wanted out of the house via mutual friends. Fine. Called a friend and used her as my agent. Listing agent was pissed because she was counting on keeping the entire commission.

Oh well, got greedy and therefore got burned.


Pretty much, this.

You don't need the sellers agent, and you are going to get absolutely nothing out of accepting the seller's agent as a dual agent.

If you know an agent you can trust, then it's a no brainer to invite them into the deal. They split the commission with you (more or less). I'm not sure what that kickback should be called (rebate-finders fee-whatever..), and I'm not sure if it's entirely legal- but it is very common. I prefer it to be paid a few weeks after closing, and off the books, and as I said, it should be someone you know and trust.

No buyer's agent can be relied upon to look after your interest. They want to close the deal to get their commission. A lawyer is the only one who is going to give you impartial advice. Opinions vary on whether or not you need one, every situation is different. Some people say you absolutely need one, but I've closed 3 large deals without one, and they all were just fine.

You do need to get title insurance.
Top Top