I got contacted a couple of weeks ago by fellow Patch.com writer Andrew Tavani about blogging (specifically, how I make money off this blog). I have never gotten paid to write a blog post or tried to monetize this site, but it sure does bring in the marketing clients. Complete article featuring quotes from me at http://bit.ly/cYGZ2M.
I’ve visited four zoos near Hoboken over the past four years, all of them have petting zoos. Newspaper column w/reviews & cost analysis at http://patch.com/A-22H.
Made a list of our needs and potential vacation spots within driving distance, then did online research and financial analysis. Where to go and stay, w/financial analysis, @ http://patch.com/A-22W
Hi Kathy,
I’ve seen your blog and have found it very interesting reading. Is there any chance you might be able to offer advice from a realtor’s point of view so that my husband and I don’t unintentionally behave inappropriately and become nightmare clients for our realtor. What I mean is that we have a history with our realtor. When we bought our previous little 1 bedroom in Hoboken in 2000 our realtor represented the seller. Then we found out she lived in our building. So, we were neighbors for the six years we lived there and then we used her to sell our condo before we moved to London. I meant no disrespect to her when I posted a message on the Yahoo Hoboken Moms site. I simply thought I’d take advantage of all avenues available that might help us find a condo we really like. I’ve had two responses from people who were planning to put their condo up for sale but have not yet listed with an agent, and whose condos sound like a potential match for us, and who have invited us to come view them. This is where I want to make sure we do the right thing and not disrespect our agent who is working for us trying to find us the right place. Is it inappropriate to now go and view a condo without our agent? Should we contact her and ask her to accompany us to the viewings? Are we likely to annoy her by telling her we’ve found places we’d like to view without her? I don’t know how to proceed from here and have a feeling like I might have done something “wrong” from a realtor’s point of view. From our point of view, we’re just desperate to find a condo to settle in and call home and want to do anything we can to find it without behaving unethically or offensively.
Any advice would be greatly, greatly appreciated!
Best wishes,
G.
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My answer:
Hi, G.,
Hoo boy, that is a really sensitive area. First of all, let me be clear that I am not a realtor. I am coming at this from a buyer’s standpoint, the same as you. That said, I know a fair amount about MLS rules. Not anywhere as much as a realtor knows, but more than most people. So glad to hear you find my blog useful, it’s always great to get feedback from other moms so I know I’m not just talking to myself!
You didn’t do anything wrong by posting your notice on HobokenMoms. You are legally allowed to view ANY apartment with a different realtor. You could see five apartments with five different realtors and it would be totally legit. The only obligation you have to your realtor is that you have to place an offer on a unit that she showed you through her. If you make an offer either on your own or through another realtor, that would be a definite MLS violation and she would have grounds to sue you and the other realtor.
That being said, there is kind of an unspoken agreement that you owe something to the realtor who got you up to speed on the market. If you have a relationship with a realtor and she is the only one who is showing you properties, then 99.9% of realtors would feel that you owe them the commission in exchange for the time they invested in you. That ONLY applies to MLS listings, however. In a FSBO transaction, such as the two owners who contacted you, the seller has no obligation to pay a realtor fee. You can tell your realtor about the FSBO sales but legally the seller does not have to pay a fee and most likely will refuse to do so.
What can happen in situations like this is that the buyer independently pays a fee to their realtor. That is very, very rare, but I have spoken to realtors who have seen it happen. The other problem is pricing. Typically FSBO sellers are looking to sell their property at the same price as they would have through the MLS, which means they get to keep the commission they would have paid to the realtor. It is highly unlikely they will drop the sale price enough to compensate for the fee (typically 5%; on a $700k sale that works out to $35k). That means that you will have to pay the market price PLUS a voluntary fee to your realtor.
You can certainly try to bargain down the sellers to make them drop the price enough. However, I have found that sellers are FSBO for a reason; because they don’t have a gun to their heads to sell and want to try to sell on their own first before going with a realtor. That lack of urgency almost invariably means they price their units too high and are unrealistic about the true market value of their property. Every single owner I know, including me, thinks their property is worth the absolute maximum possible. It usually takes a few months of dealing with showings to make owners get realistic and drop their price two or three times down to fair market value.
When you make it easy for them by appearing out of nowhere and want to buy their unit, they haven’t had a chance to experience the true grinding ordeal of listing their unit and so are almost always very difficult to negotiate with (ie. you make a low offer, they get insulted and refuse to counteroffer).
The flip side of the realtor compensation structure is that it’s like hitting the lottery. 99% of their clients wind up not buying, so they waste a lot of time on people who don’t pay off. It’s buyers like you and me, who only look when we are truly serious, who are their fantasy. In the three times I have bought properties, I spent exactly one day each time going to showings, so I estimate my realtors have gotten compensated at well over $1k/hour. That’s just crazy, you don’t owe anyone that kind of payoff.
What I suggest if you do buy FSBO is calculate roughly how many hours your realtor has spent on you, both on showings and doing research on your behalf. Multiply that times $50, and then make sure your final sales price is low enough that you can pay that amount to your realtor. The MLS contracts I have signed that allow me to sell FSBO include an addendum allowing for $2k payment to the realtor if I sell on my own to compensate them for the time spent marketing my unit. That is usually more than fair on an hourly basis.
If your realtor agrees to this structure, definitely bring her along to the FSBO showings to help you negotiate. She can prove her worth by giving you comparables of recent sales to help support your offer, and give you advice about the contract details and closing docs (ie. flood insurance). That is where a good realtor can really shine. I can’t promise you that she won’t be pissed that you are pursuing FSBO sales, but if you are upfront with her about your plan, then any reasonable realtor will be okay with it. She won’t be happy, but she won’t be furious.
Kathy
Since their favorite foods vary from week to week. I try to offer each food group once a day and have spent the summer experimenting with packing lunch for my older child, soon to start Abbott pre-k. Column @http://patch.com/A-1Kw
My two toddlers have been chopping, whisking & stirring since they could stand on a stepstool. Cooking almost all our meals helps our family’s health and budget, but it also helps my kids learn about gardening and personal finance (ie. broccoli costs $2!) Newspaper column at http://patch.com/A-0Kq
The harvest is in for the balcony garden my toddlers helped me grow! Now if only I could get them to understand that tomatoes & raspberries need to be RED before you pick them. Column at http://patch.com/A-zFf
Summertime means toddler beach day trips to Rockaway beaches (Coney Island, Jones Beach, etc). Column at http://patch.com/A-ySG
My kids and I frequently take the Light Rail to Jersey City to shop and visit friends who love living there. When it came time to buy a large home, we opted for Hoboken because of the walkability and small town feel. Newspaper column at http://patch.com/A-xVg
But in the end, it was the only logical choice. Large condos at much lower prices than in Brooklyn, a second bathroom and easy access to transportation were important elements in our decision, but the deciding factor was the 21% difference in income taxes.
Newspaper column at http://patch.com/A-xmm
