Return to the Buying and Selling Homes Forum | Post a Follow-Up

 o
Selling House AS IS and I need help.

Posted by thirdfrt (My Page) on
Sun, Nov 16, 08 at 3:16

I put my mothers house up for sale after her death. The city that she lives in (State of Missouri) inspected the house and wanted too many repairs done and it would have cost us money that we were never going to get back. So I put it up to sell AS IS. Their rules are no one can live in the house until all repairs are fixed and you can't rent the house either. So the only ones that could purchase the house were investors.

We got an investor that offered us $56,000 but wanted us to pay the closing costs. I didn't agree to this and the agent raised it to $58,000 and I said OK, then and (this is where the problem comes in) I was told that they had to go with a different bank and that the closing cost would go up to 3 percent and the price was raised to $58,600. I had to go to a place for them to fax me an Amendment to sale contract and I signed it and sent it back. I didn't see this until after I got home and now feel that I have been duped here and I am afraid that I can't get out of it because I signed it. Closing is on November 25, 2008.

Here is what was added onto the contract.

Seller to contribute 3.1 towards buyers closing costs, Prepaids, Points, and all other allowable bank charges 1 fees.

How much is that going to cost? I only agreed to the 3 percent not to this other stuff. That's what I get for not reading the whole thing. I am already losing a lot of money on the house as it is and now this? Is there anything that I can do about this? We haven't closed yet. How much are we talking about here?

thirdfrt!!!


Follow-Up Postings:

 o
RE: Selling House AS IS and I need help.

What a perfect example of why everyone needs to use an RE lawyer when they do deals, let alone why they also need to read everything and anything before signing!


 o
RE: Selling House AS IS and I need help.

It sounds as if they are doing a sellers concession, which is the reason they raised the price. Bumping it up to 58,000 instead of your 56k is covering that 3%, giving you what you want and giving the buyer what he needs. No one is being duped here. (The prepaids, and bank charges are all PART of the closing costs, not on top of).


 o
RE: Selling House AS IS and I need help.

The agents commission should have been cut for the bump up.

Unless it was changed the agent will get a commission based on $58,000 instead of the net price of $56,000.

You do not need a lawyer but you must ask your RE agent to explain every clause and its effect.
If they are not clear THEN go for the lawyer.


 o
RE: Selling House AS IS and I need help.

Hi Lucy, Thank you for your input.

Hello Linda117, Thank you very much for your input, that was exactly what I was trying to find out.

No one is being duped here. (The prepaids, and bank charges are all PART of the closing costs, not on top of).

Good, I just wasn't sure because she never explained that to me. Since I know that is a part of the closing cost then I am no longer concerned. I thought it was extra stuff that they had added on top of the closing cost. I guess they just put it that way as an explantion of what was involved in the closing cost. Glad to know I wasn't being duped. You have taken a major load off of my mind. Thank you very much.

Hello brickeye,

You do not need a lawyer but you must ask your RE agent to explain every clause and its effect.
If they are not clear THEN go for the lawyer.

I will certainly do that in the morning just to double check things out. She has been really good up to this point but, I have to take some responsibility for not asking what was involved in closing costs, since I have never sold a home before I just didn't think to ask that question.

Again, thanks to all who posted to my thread it is greatly appreciated.

thirdfrt!!!


 o
RE: Selling House AS IS and I need help.

Always use a good real estate attorney regardless of how small the real estate transaction. It is money well spent.

I hope it works out for you, thirdfrt.


 o
RE: Selling House AS IS and I need help.

thirdfrt just make sure the contract says a "maximum" of 3%. If the bank costs and prepaids are more than that, you dont want that taken out of your money.


 o
RE: Selling House AS IS and I need help.

I would include a "not to exceed $xxx.xx" clause.


 o
RE: Selling House AS IS and I need help.

Thank you those are all good suggestions and I will write this down and when I am faced with this again I will know what to do.

To let you know the deal on the house fell through with 8 days until closing he backed out. The realtor was surprised and she was really upset almost to the point of tears. I went through a lot because of this person, I was trying to hurry up and get rid of furniture at a cheap cost just to get it out of the house. Come to find out he never even put the money that the bank requested down. He didn't comply with the terms of the contract and therefore Loses his earnest money.


So I start over but that's OK, maybe this was a good run for me. I am a first time seller of a home with no real experience and just trusting the realtor. Now I have more questions since I found this forum and hoping that you will help me out here so that I know when to agree and not to agree to the buyers requests.

xamsx, Thank you I will look into this.

Hi Linda117,

thirdfrt just make sure the contract says a "maximum" of 3%. If the bank costs and prepaids are more than that, you dont want that taken out of your money.

That was what I was thinking but really didn't know for sure. It started out with him wanting 2 Percent and I bulked and that is when she raised the price, then towards the end that was when he wanted to raise it 3 percent but the paper work showed 3.1 percent and the price was raised to $600.00. A total of $58,600.00

Hi terriks,

I would include a "not to exceed $xxx.xx" clause.

I'm sorry I don't understand, not to exceed what dollars clause? Are you talking about the closing costs?

What I am going to do is send this and then post again so that this page won't be so large. I will post again on this thread the questions that I am going to ask and this will give me something to go on when I am faced with this again. Thanks to all who have posted.

thirdfrt!!!


 o
RE: Selling House AS IS and I need help..1

Hi everyone,

I need a lesson in what to do as the seller selling a house as is.

Starting over: Based on the amount of $56,000.00

1. The commission how much is to much?

2. Do I have to help pay for any of the closing costs and if so how much is to much?

3. When do I contact a RE Attorney?

4. What is the RE Attorneys Job?

5. Who is responsible for paying the Title Company?

6. If house is sold let's say in February who pays the rest of the Real Estate taxes? The seller or the buyer?

7. In the contract that I had there was a lot mentioned on the buyers responsibility and things mentioned about the sellers responsibility. It seemed to me that it was more to protect the buyer but what about the seller, how is the seller protected?

8. What is required of the realtor? Should my realtor be an agent only for the seller? In other words not a dual agent for both buyer and seller? She became a dual agent in the middle of the deal and I signed accepting that. Should I have objected? I didn't know what to do when that happened.

9. Should I have it put in the new contract that she can not be a dual agent? Isn't that a conflict of interest?

10. Are there any other things as a seller that I should look out for that would help me to accept or reject the deal before I sign a contract?

That is all I can think of at the moment. Any help that you can give me here will be greatly appreciated. Thank you soooo much.

thirdfrt!!!


 o
RE: Selling House AS IS and I need help.

Many of things things very by state, but very generally:

1. The commission how much is to much? * 6% is the norm

2. Do I have to help pay for any of the closing costs and if so how much is to much? *Here, yes. You would have fees to the title & escrow company. You should confirm what, if applicable, these would be for you there.

3. When do I contact a RE Attorney? We don't really use them here, but i would think as soon as you have an offer, BEFORE you accept it.

4. What is the RE Attorneys Job? *As your attorney, to advise you on the pros/cons of the offer

5. Who is responsible for paying the Title Company? *Varies by state

6. If house is sold let's say in February who pays the rest of the Real Estate taxes? The seller or the buyer? *Taxes would be prorated - if you have paid for an entire year the buyer would reimburse you through closing from that date until the year's end.

7. In the contract that I had there was a lot mentioned on the buyers responsibility and things mentioned about the sellers responsibility. It seemed to me that it was more to protect the buyer but what about the seller, how is the seller protected? *Varies by state as well. Seller's disclosures can be important protection, but as this was not your house they will not be as complete. In my experience, a sales contract should be party neutral.

8. What is required of the realtor? Should my realtor be an agent only for the seller? In other words not a dual agent for both buyer and seller? She became a dual agent in the middle of the deal and I signed accepting that. Should I have objected? I didn't know what to do when that happened. *I am not a fan of dual agency, and I say this though I allowed it on my last sale - and my agent is my best friend!

9. Should I have it put in the new contract that she can not be a dual agent? Isn't that a conflict of interest? *not if they act in both their client's best interest. It does limit how far they can 'push' for you though.

FWIW, identifying what the 3% credit was to go to (prepaids and such) is a standard lender requirement. There can not be a credit in excess of the amount of fees charged - this verbiage limits the credit to truly covering fees.


 o
RE: Selling House AS IS and I need help.

Thank you justnotmartha,

FWIW, identifying what the 3% credit was to go to (prepaids and such) is a standard lender requirement. There can not be a credit in excess of the amount of fees charged - this verbiage limits the credit to truly covering fees.

You lost me on this one a 3% credit? Are you talking about closing costs here? There can not be a credit in excess of the amount of fees charged. If you are referring to closing costs then how can it be considered a credit, I don't understand. Sorry!
thirdfrt!!!


 o
RE: Selling House AS IS and I need help.

Yes, I mean the closing costs, or the fees. The seller basically agrees to pay the costs the buyer would incur up to 3% of the sales price - so $3000 of costs on a $100k home. The seller would then pay their regular fees on top of this. If you agree to pay up to 3% and the buyer's fees only total $2500, they can not receive more than $2500. This is why the language is used to specify what the credit goes toward.

It's worded as a credit because at closing the 3% will be subtracted from the seller's proceeds and added toward the buyer's costs - a true debit and credit situation.


 o
RE: Selling House AS IS and I need help.

Just one note. Just because you're selling it as is, don't assume you don't have to do anything to make it look better. Spend a little to clean, paint a few key areas, etc. You might get a couple who wants to do the work and fix it up, but everything you can do inexpensively to make it shine will help.


 o
RE: Selling House AS IS and I need help.

In your first post you stated: "...no one can live in the house until all repairs are fixed and you can't rent the house either. So the only ones that could purchase the house were investors."

I think your assumption about investors is wrong. An end user(someone to live in the home) can buy this home, they would just need to have repairs done prior to moving in. This is very doable. They just stay in their current place for a few weeks (or how long the repairs take) while the needed repairs are done.

What kind or repairs are needed before someone can move in? I am sure there are other repairs needed too, that don't prevent someone from moving in.


 o
RE: Selling House AS IS and I need help.

1. The commission how much is to much?

Commissions usually are 5 to 7% - depending on where you are. What I've always looked for when trying to find an agent is one that splits the commission in 1/2, or in addition will lower the commission for an "in house" sale, when one of their agents bring the buyer.

8. What is required of the realtor? Should my realtor be an agent only for the seller? In other words not a dual agent for both buyer and seller? She became a dual agent in the middle of the deal and I signed accepting that. Should I have objected? I didn't know what to do when that happened. *I am not a fan of dual agency, and I say this though I allowed it on my last sale - and my agent is my best friend!

You had the right to say no. Had you said no, they could have found the buyer their own agent within the firm or else where. You have to figure out what is right for you.

Things to think of - in this market with nothing selling in most places, you have to ask yourself if you think your agent will "take sides" just to get a sale. When we sold in May, the buyer had their own agent that was a grandfather to one of the buyers, he was also retired & not acting in his MLS area.

When the inspection came, we were sitting & waiting. Our agent said, well, that's good, they know they get 7 days to list demands and haven't. We didn't feel right, we knew the other agent probably didn't know this, so after the time limit our agent called them, of course they had no clue & immediately faxed the demands.

I always held firm we had no intention of repairing, nor crediting unless something was safety related & we fixed the flu.. There was another issue we were going to attempt to get estimates for but not fix. At some point our agent appeared to change sides, us getting estimates was then us fixing it.

We ended up hiring someone, gave them a deposit and made a deal that we would pay for it but the buyer would have it done after moving in; our agent knew this but when push came to shove in the end he said he had no clue why we'd give a deposit. He then wanted us to eat the deposit ($300) and pay them the full amount at closing.. I told him to eat it out of his commission, he laughed.

Had he been a dual agent, I don't think we'd have closed because we would have told everyone to stick it. We were so stressed, feeling that the agent wasn't looking out for our interests but theirs. I actually don't know how I'd do it when the time comes to sell this house.

9. Should I have it put in the new contract that she can not be a dual agent? Isn't that a conflict of interest? *not if they act in both their client's best interest. It does limit how far they can 'push' for you though.

IMO, it's best for each to have their own agent.

Joyce,
I have a few posts that might be of interest to you -
Agent Interview Questions for sellers if you decide to look for another agent
Sellers, what are you doing to prep? - if you have time to read through it, you might get some ideas on dressing up the house a little. Things like grass seed, a few plants, even changing light switches and lighting help.

Do you feel the house is priced right?
When was the last time the agent did a market analysis?


 o Post a Follow-Up

Please Note: Only registered members are able to post messages to this forum.

    If you are a member, please log in.

    If you aren't yet a member, join now!


Return to the Buying and Selling Homes Forum

Information about Posting

  • You must be logged in to post a message. Once you are logged in, a posting window will appear at the bottom of the messages. If you are not a member, please register for an account.
  • Posting is a two-step process. Once you have composed your message, you will be taken to the preview page. You will then have a chance to review your post, make changes and upload photos.
  • After posting your message, you may need to refresh the forum page in order to see it.
  • Before posting copyrighted material, please read about Copyright and Fair Use.
  • We have a strict no-advertising policy!
  • If you would like to practice posting or uploading photos, please visit our Test forum.
  • If you need assistance, please Contact Us and we will be happy to help.


Learn more about in-text links on this page here