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One is the Most Lucrative Number

The real estate agent was advocating for my client to accept a $415,000 offer on his house.  The buyer had  2 ½ % to put down and would finance the rest.  My client asked if I thought he should follow the agent’s advice and accept this offer, in turn rejecting a cash offer for $405,000.

I didn’t hesitate, saying “Grab that cash!” However, as soon as my client tried to follow my advice, the agent called to get me to back down.  I refused to do so, saying my client was much better off accepting $10,000 less (which actually was $9,560 when you subtracted the extra $400 the agent was making and the extra $40 NYS would grab). A cash deal is mostly done by the time the contracts are signed, and that kind of semi-certainty is nothing to sneeze at.

“You’re being ridiculous,” screeched the agent. “That’s a lot of money to leave on the table.”

Of course, I second-guessed my usually good instincts. I called the seller to be sure we were on the same page, and we were. He said that since his RE agent was “so psycho” over $400 less in commission, he’d probably slip her that amount at closing, even though it galled him a bit.

I told him to hold on, because more than likely his agent wouldn’t make the whole $400. She’s have to share with her broker. And then it hit me! “Just out of curiosity,” I asked the seller, “did some other agent or agency bring the cash buyers?”

“Yes,” he said. “[His agent] sold the house by herself for $415,000. An agent from [big agency] brought the cash buyers. Ohhhhhhhhhhhhh….. I get it!”

In case the light bulb didn’t go off for you, Ms. Bigger-Offer stood to make twice the commission on the $415,000 sale, as there was no other agent and broker to split up the commission.  She was practically apoplectic over more than $4,000, not $400.

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