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[cornercamping]

Sorry, I missed all of this.  More or less, I just want them to cut me a deal on the house and knock whatever % they would have to pay to my agent, if I had one, off the price of the house.  For instance, if I had an agent, and his commision was $12K for example, then I want them to knock the $12K off the purchase price.  I want to save the money that they would have to pay to my agent, if I had one.  Instead of getting an agent, I brought on an attorney, who is only charging a flat fee.  

[cornercamping]

Well you cannot get another "agent" at this time as you were shown the house by the selling agent so they(selling agent) are acting as both(buyer/seller) and you are now listed with the buying agent as being a customer of theirs. I think they can hold you as a customer for 90 days. Bad position to be in, they are legally obligated by their contract to get the highest price for the home for the seller they have no legal obligation to you. You should have you own buyer agent that is working in your best interest (lowest price) for real estate.  

You can neogitiate fees with the agent to a great deal. I bought my house and the home was being sold furnished as the owners were moving into a retirement complex and only taking their bed. I arranged a deal with selling agent since her daughter was going to school to take the furniture in leiu of a commision, saved a few thusand that way.

I never signed anything.  I just went to see the house, with a preapproval letter in hand.  Other than that, I haven't submitted an offer or anything yet.  That's why I'm trying to get enough information to put a solid offer on the table.   My attorney will write up the offer, and I'll include a deposit for good faith if needed.  I just don't know what to offer.  My attornery is having a market analysis done of the house, and surrounding houses to see what the value of similar homes in the area are.  This house is new construction and they've been sitting on it for nearly 4 months. I figure that I could come in where I start off on a postive note.  I don't want to save $3-$4k on a house compared to the asking price.  Buy low, sell high  ;) :D

[cornercamping]

This is a quick synopsis of the home:

$325,000.00 is their asking price

Homes equiv. to this house fall in between $340-$360k

The house has been "finished" for nearly 4 months, and has not sold yet.  We saw the house originally when it was just a frame and some studs, so nobody's jumped on it.   The house is ready for move in minus appliances and lighting.  That is still up to us based on their allowance standards.  The house is new construction.

So, what I'm thinking is offering $320K and then asking for whatever commission they would have to pay to my agent, if I actually had one, be knocked off the price of the house upfront.  So, if let's say a "buyers agent" gets 3% of the purhcase price, I want $320K minus the 3% to be my offer price.   Then, I'll have my attorney put it in writing as a offer, and attach a $10K check for good faith.  
I already have approval for a 10 year interest only loan on the house for the full amount from my bank. My attorney will be there from start to finish to handle all legalities to make sure I don't get screwed.

What do you think?  Shoot for 3%  ???

[cornercamping]

also, they've been asking $325K from day one, since it was just a foundation.  So, they haven't come down at all since then.

[tstruyk]

3% with no agent commissions is a wash for them, they would be foolish not to take it... the only difference is the listing agent would loose 3% commission on the $9,750...roughly 292.50.  If they wont deal on that they arent right in the head.  Maybe start at 4-5% reduction and let them counter to 3%... I prefer just to give them a bottom line myself, thats just how I negotiate.

this is all assuming a 6% commission standard 3 to each side.  even if they reduce 2.5% your saving $$.  What is your lawyer's fee?  will that be paid from the proceeds of the sale or by you privately.  A little mathematical gymnastics and its a wash for them regardless.

tim

[cornercamping]

3% with no agent commissions is a wash for them, they would be foolish not to take it... the only difference is the listing agent would loose 3% commission on the $9,750...roughly 292.50.  If they wont deal on that they arent right in the head.  Maybe start at 4-5% reduction and let them counter to 3%... I prefer just to give them a bottom line myself, thats just how I negotiate.

this is all assuming a 6% commission standard 3 to each side.  even if they reduce 2.5% your saving $$.  What is your lawyer's fee?  will that be paid from the proceeds of the sale or by you privately.  A little mathematical gymnastics and its a wash for them regardless.

tim

Actually, my attorney isn't costing me anything than a nice dinner and a few drinks.  He's also the corporate attorney for the company I work for, and it's in the companies best interest to make sure that I don't get screwed because I'm an officer of the company.  So, they always make sure whatever I do can't scare investors or be problematic for the company itself. My actions reflect on the company, even in my personal life.

Hmm... I may just ask for the 6% then.   My position is to get as much equity out of the house upfront, because I only intend to keep it less then 10 years and build a custom home.   That being said, since the economy is screwy anyways, I want to get as much upfront as I can.  I'm only paying closing costs to buy the house.  Everything else is in the loan.  I'm not putting anything down twards the principle of the house.  I'll use the banks money instead  ;)

[tstruyk]

might as well swing for the fences!!!  What kind of loan program are you doing?  I have some pretty aggressive programs with no $$ down.  I'd like to take a crack at your financing if your interested.  What state are you in?

[cornercamping]

6.394 % 30 year, 10 year fixed interest only

[Dawn]

6.394 % 30 year, 10 year fixed interest only

This strategy will only work in a stable or rising housing market.  If the market would become depressed due to ecomomic, social, or geographical changes, you could be left owing more for your home than what you have paid for it.

It's the same with people taking out home equity loans to invest in the market, while you may make 8, 10, or 14% in the market and pay from 5 - 6% on the loan, this only works as long as the market is rising (bull market).  If the market falls (bear market) you could lose everything with this strategy and end up paying more than you're receiving.

Be careful.

Dawn  

[Sunny]

Dan, once someone with a realtor license showed you the house, he/she is entitled to the agent fee from the buyer's portion.  Even if you get an agent now, the person who showed you the house is the one getting paid, not the one you find (in this case, the seller's agent).  Be aware, since he/she is the seller's agent to begin with, he/she is only looking at the best interest of the seller, not you.  Anyway, either way, you're still looking at an average 6% in the total price you paid (3% each; seller/buyer agent).  

[tstruyk]

thats a good point dawn, but the only real negative to an I/O payment is if you make the I/O payment for over 2 years.  The amount of principle paid in the first 2 years is minimal and even a decling market wouldnt matter.  The numbers still wouldnt match up regardless of I/O payments if the area deteriotrates that much.  Sounds like there is enough equity in the house already to sustain a substantial delcine in the market.  As for using equity to invest... I dont like it and financial planners are not allowed by law to recommend it for just the reasons Dawn set forth.  NOW, I always recommend to my refinance clients that are saving 6-700 per month to get with a financial planner to discuss a long term investment for retirement, most of the poeple I deal with that carry significant debt have no 401k or pension set up.

btw CC.... sounds like a good program!  That is 0 down correct and I am assuming no PMI through a wholesale bank?  if its not let me know, there are programs out there that are competitive to that loan.  Even if you are in a state that I am not liscensed in I can help you get a fair deal.

let me know

[251am]

  What is the assessed value? What is the proposed tax rate/mill rate? Being a new home you'll have to find "comps", comparables to the property. Asking price is for people with FRS-Full retail syndrome. Find a comp., get the ASSESSED value of that property and offer %5-10 above the assessed value, unless they are asking less than assessed.

  Being that you are not represented by a buying agent you have the upper hand. The selling agent is going to get the whole commision, anywhere from %3-7 of the sale price, depending on their office policies, ie C21, ReMax, etc.. Get the selling agent aside and say, "Hey look, you're getting the full commission on this one. Are there other offers? Here's my best offer." In writing, they are legally obligated to present your offer to the sellers. Then walk. Wait for a counter offer. Do NOT call them. It's a "buyers market" right now.
   But, then again, if money is no object make an offer for full asking price.