Highlands County Talk

FOR RENT - Buyers turning into Renters

I can't help but notice that we are being swamped with requests for rentals. While our MLS does have a rental section, there is not much available. It gets especially tough when the prospective renters have pets or need more than your average and much available 3/2/2.

It's good to have friends but it's not good to have your friend or best buddy market your most valuable possession for various reasons:

We are currently working with a seller who's property was previously listed with another brokerage and unfortunately, it expired. The seller told us that the previous agent was "a friend".

1. Your friend might have a hard time telling you what he/she believes the real market value of your home is. "Why wouldn't he/she tell me? After all he/she is my friend!" you ask. It's very simply, he/she is your friend - that's why. They wouldn't insult you with a price suggestion lower than what you expect.

2. Your friend should ask you if you are current with your mortgage payments. Your friend might not feel comfortable asking you about your financial situation. Why? Because he/she is your friend - that's why. You might not feel comfortable talking to your friend about your finances because you don't want your entire circle of friends to know that you missed a mortgage payment.

3. Your friend might find it hard to tell you that your home needs a top to bottom cleaning and a garage sale might help removing the clutter. "But my friend always commented on how nice our home is!" Can you guess where this is going? Exactly: they like your home because they are your friend - that's why.

We tend to form close relationships with our friends and the last thing we want to do is hurt them in any way. A good Realtor, which whom you are not "friends", will have no problem being completely honest with you about the market value of your home and what needs to be done to make your home more marketable - two key ingredients in getting your home SOLD.

Disclaimer: In referrence to a valid comment make within this discussion, this topic is NOT intended to discuss anyone's commission rates. Numbers used in the above blog post are examples only.

Imagine you wrote a contract on a home and during the course of negotiations, the seller makes your commission part of the contract terms. Under "Additional Clauses" it reads: Listing Agent to receive 3% commission to be split 50/50 with the selling agent."

Your listing agreement says x% and that the selling agent receives x%. Being a good agent, you know that the contract for sale and purchase doesn't govern the commission as YOU, the agent, are not party to the contract.

Don't fret, banks do it all the time! If you submit a short sale packet, the bank is free to renegotiate your commission and chances are, you don't get your contract accepted unless you lower your commission and buy the selling agent a big box of expensive chocolates to make sure he/she will still work for half the commission you promised as co-broke.

Let's be honest, the reason why so many agents shy away from showing short sales or going through with writing an offer is the fact that the bank will re-negotiate commissions and the selling agent might find themselves having to work for a lot less even if the short sale requires more work.

Are the banks short cutting themselves with this practice? You betcha! Reduced paychecks mean less agents are willing to show short sales - equals less showings - equals less offers. In my area, the average short sales goes for around $100K. Cutting the commission is going to net the bank $1000 more per 1 percent of commission they refuse pay. So, per short sale they are saving let's say $3000 (x% commission cut in half). That's great for the bank, but how many offers do they never receive  and they end up foreclosing and spend much more money in doing so then giving a real estate agent what they deserve - a paycheck for services rendered.

The only reason why the banks are re-negotiating our commission outside of the listing agreement is because nobody has sued them......yet.

And just in case, I did consider that the bank is doing the seller a favor by accepting less as a payoff. I'm fully aware that the bank is taking a loss. So should the homeowner that didn't live up to his/her promise.

However, I can't see why the real estate agent that's doing the bank AND the homeowner a favor should take a loss.

Like I said, nobody has sued them.............yet:)