Private Real Estate Sale (No Agents) | The Boneyard

Private Real Estate Sale (No Agents)

OkaForPrez

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Any yarders experienced with selling a home without real estate agents in Connecticut? Any Lessons Learned? How were closing costs different?


Lawyers,

Is this something you can do yourself? Is this something you SHOULD do yourself? What's a reasonable price to pay in Connecticut for sellers closing costs related to legal fees?
 

BParkDog

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Did it in CT. Found an on-line service to get an MLS listing, which is key. If you are selling it yourself without an MLS listing, you're not reaching a huge number of the buyers - at least that's how it was a decade or so ago, and, whatever price savings you get from having no agent, you're likely to lose with lower price.
If you sell yourself, real estate agents will be mostly hostile, and will steer clients away from you, even if you're on the MLS.
Long story short, after being on the market for a bit, I ended up hiring a real estate agent.

I am a lawyer, btw, but I'd still hire a realtor to handle any real estate transaction if I didn't have a ready buyer. If you know the person to whom you are selling, don't hire real estate agents - they are unneeded.

In general, I've been involved with many real estate transactions for myself, and hundreds for clients. Here are the basic lessons I've learned:

Real estate agents, with some exceptions, work for the deal. If you tell them what your max or min price is, that will get leaked to the other side - use that to your advantage. Real Estate agents will hire blind, deaf, and dumb home inspectors who green-light deals. If you're selling, not your problem. If you're buying, use your own independent inspector. Use your agent as a means of getting in houses - use information they give you on neighborhood, school, and so on, but verify - don't trust them unquestioningly.

"Dual Agency" is a euphemism for unethically representing the buyer and seller at the same time so that the real estate agent can double up on the commission. It should not be allowed. Had one recently where I was representing the seller. Buyer had backed out. Agent was dual agent. Agent told buyer to fill out cancellation form, which Buyer did. But agent neglected to give Buyer the correct date by which that form needed to get back to him. Form came back a day late. When he called me, I said, "my seller keeps the deposit." He tried to argue that a good faith attempt was made to cancel. I asked, "don't you represent my client? Shouldn't you want him to get the money?" I guess not, when he realizes that his rear was on the line for the money.

Real estate contracts are almost always trash and easily voidable, particularly the one drafted by the national association of real estate agents. It's plain awful. Expect that any buyer can back out for a myriad of reasons. The deal isn't done until the check clears and/or you have physical possession of the house.

As a buyer, avoid rent-backs. Make sure the house is empty on the day you buy. Getting people out of your house can be a costly nightmare.

If you end up with a "settlement agency," and there is only lawyer at the table, you can consider yourself unrepresented. It's the same unethical scam the agents are running. There is ZERO way to represent a buyer and a seller at the same time. What if the seller tells the lawyer about a defect in the house that does not need to be disclosed by law? If you're selling, your absolutely should have your own lawyer to prepare the deed and attend the closing. If there is settlement agent and you don't hire your own lawyer when you are selling, that agent will get that fee. Hire your own, no extra cost to you, agent does not get the fee (but check the rules/laws in your jurisdiction). If you're buying, you absolutely want your own lawyer, if cash, but if you're using a bank, you're probably stuck using the bank's "settlement agent," who will likely tell you that he/she is your lawyer, but who has a massive conflict of interest because he/she gets most of his/her work through the bank. If the ca-ca hits the fan-fan, the lawyer will side with the bank.

I'm a DIY guy. I do everything I can myself, for the most part. I maintain a few exceptions, among them: 1. I don't move furniture - not my own, not my friends. 2. I don't brine/smoke/cure my own bacon/hams. 3. I don't do my own gunsmithing. 4. I don't weld. and 5. I don't sell my own real estate.

Realtors serve a needed purpose, as do real estate lawyers. My advice is to use them. Maybe we'll get to a day where we have a HouseBuy app and we can get rid of the agents and lawyers. We're not there yet.
 
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I-buying companies such as Redfin are growing extremely fast and provide a way to sell your house at a good price without having to even put it on the market. What I have read is that they pay "fair market prices" but I don't have any direct experience. Since you save all the real estate agent fees there is some wiggle room there. It can't hurt to give Redfin and Opendoor a call (I think Zillow may have entered this realm as well), see if they are active in your area and ask for a quote. It might be a relatively painless and cost-effective way to sell and there is no downside to checking with them.
 
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I sold my first house in CT.
It was new when I bought it.
I drove by saw it being built and negotiated with the contractor and bought at 75G. Three years later bought a For Sale sign and sold the house for almost double what I paid. No agents. For Sale sign was about $8.00. Purchasing couple used my lawyer (20+yrs ago). Easy as pie. (Guess I was lucky). I'd try it again, especially in this seller's market.
 
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I've backed out of a house twice before, and the reputation stuck with us (unfairly, if you ask me) even a decade later, as I was told recently by my buyer's agent. It can get messy. The first time, the kitchen smelled like sewage during our inspection. Smell wasn't there when we saw the house. Our inspector said it was broken vent stacks behind the plaster walls, and since this was a very large Victorian house, we nixed the deal. There was much anger on that one. But nothing like the second time when the bank that approved our sale (& even the inspection) couldn't get our podunk appraiser from the sticks to realize he was in a big city and not on a pasture. There was just nothing to be done--house was appraised at under $150k of our offer, and we were already at 25% down. Similar houses next to the one we wanted to buy were assessed by the city at over our offer price! The seller's agent insisted that the earnest money of $15k therefore belonged to the seller. Our attorney worked 6 months to get the money back, charged us $0 for his work, but before it ever went to court, the President of the seller agent's agency fired the agent and sent the money back to me.

Both times we were justified, and ultimately we ended up in a house we loved. 3rd times the charm.

But 17 years later, we're downsizing, and just bought a house half the size. Our buyer's agent told me that our attempts to buy 17 years ago were still remembered in that realtor community. This, in a metro region of 1.3 million people.

Real estate is crazy.
 
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Sorry for the long history but back to the topic--in my area, people selling on their own have been dramatically underestimating the market. A home that went for $400k "by owner" stood right next door to a similar home that sold for $550k a month later.
 

Dove

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I have to endorse using an agent. Ours was an agent who knew my mom before I was born and was a life-long family friend. And she is great at it. So, we got lucky.

Helped us when we were honing in on a house that, during an inspection, saw the well water stoop flowing during a routine well yield test. That killed it for us and she handled the drama.

Then, on the house we bought, there was unapproved improvements revealed just before closing. She handled that and the approvals were in hand the next days.

As a seller, @OkaForPrez , maybe not using an agent is okay but remember you will be dealing with agents and they may know more than you re: the process.
 

Apollo

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@BParkDog thank you for taking the time to write all that out.
Not 100% accurate though. Are there scumbags who will sell their soul for a comission? Yes. Does that apply to every agent? No. Most have good intentions and the penalties are VERY strict if they don't abide by the book so the things like "leaking price points", and being shady about dual agency (which is a very common thing to happen, by the way) aren't worth the risks for 99% of the agents out there.

I work in the industry, but am not a residential agent. I work with many of them though and can speak objectively. Find a local agent who has a good reputation. Your best bet is to ask your friends and neighbors who they used and if they liked them or not. USE THEIR NETWORK OF CONTRACTORS! Do not go and hire your own inspector, stager, photographer, handyman, painter, lender if you don't have to. The good agents will have developed strong relationships with contractors they trust, and using their resources and that network is where part of that commission is earned, and they will probably be able to get you a better price on that stuff being that they are frequent customers. I have worked with dozens of "For Sale by Owners" (FSBO's), and I would venture that 80-90% of them eventually end up hiring an agent after realizing how hard selling your home can be.

That being said, if you do decide to go that route; I agree with @BParkDog that getting your home on the MLS is imperative and there are a la carte agencies who will do it for a fee. Can you save money by selling your house on your own? Maybe, if everything goes 100% smoothly. It rarely does though, and not having knowledge of certain things could end up costing you more.

Either way, now is a great time to sell in CT. Good luck!
 
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I sold my first house in CT.
It was new when I bought it.
I drove by saw it being built and negotiated with the contractor and bought at 75G. Three years later bought a For Sale sign and sold the house for almost double what I paid. No agents. For Sale sign was about $8.00. Purchasing couple used my lawyer (20+yrs ago). Easy as pie. (Guess I was lucky). I'd try it again, especially in this seller's market.
$75k for a house. Was this in 1975??
 
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Still irks the hell out of me that agents work on commission and get the same 2.5-3% on a 200,000 house as they get on a $2M house.
I’m in the process of selling our house and buying a new one. We’re using Houwzer, but they’re not in all markets. Not sure if they’re in CT. Their agents are salaried so they don’t operate on a commission. I’m just paying our selling agent 2.5k, not a percentage. They just take a flat rate. We’re saving 10’s of thousands using them.
 

temery

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Did it in CT. Found an on-line service to get an MLS listing, which is key. If you are selling it yourself without an MLS listing, you're not reaching a huge number of the buyers - at least that's how it was a decade or so ago, and, whatever price savings you get from having no agent, you're likely to lose with lower price.
If you sell yourself, real estate agents will be mostly hostile, and will steer clients away from you, even if you're on the MLS.
Long story short, after being on the market for a bit, I ended up hiring a real estate agent.

I am a lawyer, btw, but I'd still hire a realtor to handle any real estate transaction if I didn't have a ready buyer. If you know the person to whom you are selling, don't hire real estate agents - they are unneeded.

In general, I've been involved with many real estate transactions for myself, and hundreds for clients. Here are the basic lessons I've learned:

Real estate agents, with some exceptions, work for the deal. If you tell them what your max or min price is, that will get leaked to the other side - use that to your advantage. Real Estate agents will hire blind, deaf, and dumb home inspectors who green-light deals. If you're selling, not your problem. If you're buying, use your own independent inspector. Use your agent as a means of getting in houses - use information they give you on neighborhood, school, and so on, but verify - don't trust them unquestioningly.

"Dual Agency" is a euphemism for unethically representing the buyer and seller at the same time so that the real estate agent can double up on the commission. It should not be allowed. Had one recently where I was representing the seller. Buyer had backed out. Agent was dual agent. Agent told buyer to fill out cancellation form, which Buyer did. But agent neglected to give Buyer the correct date by which that form needed to get back to him. Form came back a day late. When he called me, I said, "my seller keeps the deposit." He tried to argue that a good faith attempt was made to cancel. I asked, "don't you represent my client? Shouldn't you want him to get the money?" I guess not, when he realizes that his rear was on the line for the money.

Real estate contracts are almost always trash and easily voidable, particularly the one drafted by the national association of real estate agents. It's plain awful. Expect that any buyer can back out for a myriad of reasons. The deal isn't done until the check clears and/or you have physical possession of the house.

As a buyer, avoid rent-backs. Make sure the house is empty on the day you buy. Getting people out of your house can be a costly nightmare.

If you end up with a "settlement agency," and there is only lawyer at the table, you can consider yourself unrepresented. It's the same unethical scam the agents are running. There is ZERO way to represent a buyer and a seller at the same time. What if the seller tells the lawyer about a defect in the house that does not need to be disclosed by law? If you're selling, your absolutely should have your own lawyer to prepare the deed and attend the closing. If there is settlement agent and you don't hire your own lawyer when you are selling, that agent will get that fee. Hire your own, no extra cost to you, agent does not get the fee (but check the rules/laws in your jurisdiction). If you're buying, you absolutely want your own lawyer, if cash, but if you're using a bank, you're probably stuck using the bank's "settlement agent," who will likely tell you that he/she is your lawyer, but who has a massive conflict of interest because he/she gets most of his/her work through the bank. If the ca-ca hits the fan-fan, the lawyer will side with the bank.

I'm a DIY guy. I do everything I can myself, for the most part. I maintain a few exceptions, among them: 1. I don't move furniture - not my own, not my friends. 2. I don't brine/smoke/cure my own bacon/hams. 3. I don't do my own gunsmithing. 4. I don't weld. and 5. I don't sell my own real estate.

Realtors serve a needed purpose, as do real estate lawyers. My advice is to use them. Maybe we'll get to a day where we have a HouseBuy app and we can get rid of the agents and lawyers. We're not there yet.

Great stuff there. Probably. Didn't read the whole thing.

If you are selling your own house, how do you handle a realtor bringing you a possible buyer? Do they negotiate a commission before bringing the buyers for a visit?
 
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I’m currently buying a house in Glastonbury through a private sale. We don’t have a realtor representing us but so far it’s been pretty seamless. Our lawyers have handled everything with the contract. Went through the inspection yesterday and have the appraiser going through within the week.
 

CL82

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I've backed out of a house twice before, and the reputation stuck with us (unfairly, if you ask me) even a decade later, as I was told recently by my buyer's agent. It can get messy. The first time, the kitchen smelled like sewage during our inspection. Smell wasn't there when we saw the house. Our inspector said it was broken vent stacks behind the plaster walls, and since this was a very large Victorian house, we nixed the deal. There was much anger on that one. But nothing like the second time when the bank that approved our sale (& even the inspection) couldn't get our podunk appraiser from the sticks to realize he was in a big city and not on a pasture. There was just nothing to be done--house was appraised at under $150k of our offer, and we were already at 25% down. Similar houses next to the one we wanted to buy were assessed by the city at over our offer price! The seller's agent insisted that the earnest money of $15k therefore belonged to the seller. Our attorney worked 6 months to get the money back, charged us $0 for his work, but before it ever went to court, the President of the seller agent's agency fired the agent and sent the money back to me.

Both times we were justified, and ultimately we ended up in a house we loved. 3rd times the charm.

But 17 years later, we're downsizing, and just bought a house half the size. Our buyer's agent told me that our attempts to buy 17 years ago were still remembered in that realtor community. This, in a metro region of 1.3 million people.

Real estate is crazy.
This reminds me a bit of the process getting into my current house.

House #1. We found a house in a town on the train lines into the city that we liked. We had made a verbal offer with our realtor. The brokers and the seller decided that we would have a meeting together and fill out a formal written offer. My wife and I arrived a little early so we decided to drive by the house which was located on a steep hill. To our surprise, the property next to us had been subdivided and a new house was going up that in the sub-decided lot covered virtually the whole lot. The owner/builder had gotten around the two story limitation by making the “basement“ 10 feet high. So, wedged up against my lot, I had a 30 foot monstrosity being framed out. Additionally the new house was on the uphill side of us on a fairly steep hill. The effect of it would have been like living next to a drive-in movie screen. I looked at my wife and said I’m not even sure we’ll get enough sunlight to grow grass. We decided that we no longer wanted the property.

We went to meeting and told everyone we had just driving by the property. They immediately all got concerned looks on their faces. I said that we weren’t interested in the property anymore. The buyer says to me “look tell me a dollar amount that you would make you interested.” I said “there isn’t one.” I wished the seller well and walked out. He looked like he was going to be sick. I probably would’ve felt a little more bad
for him if it wasn’t for the fact he did not disclose that the adjoining lot was subdivided and that he had opposed the application for the zoning waivers for building of the new house on it.

House #2. We had been in the middle of a back-and-forth negotiation on a House that we liked when the realtor called up and said that the seller has decided to end the negotiations. I asked her “so there’s no deal? No possibility for negotiation?” She assured me there was not.

I hung up the phone and called the seller who are confirmed that she terminated negotiations because she felt like we were too far apart. I said that I completely understood and that I just wanted to tell her how much we enjoyed meeting her and wish her the very best of luck selling the property. She seemed a little taken aback. I told her that I also wanted to say it’s not that we didn’t think the house was lovely and worth what she was asking, it was just that we were young couple and at the top of our budget. I mentioned again that I knew that property had been on the market for a while so they really wished her the best of luck and I hope she found a buyer soon. By the end of the call the negotiation was re-opened.

My realtor called me up in a panic and said “you can’t talk to the seller, only I can talk to the seller.” I pointed out to her that I can talk to whomever I wanted and that until I did the deal has fallen through. I told her not to worry that I was still keeping her as my realtor, but she should just get out of the way and let me close the deal.

The seller came down and we went up but we were still a little far apart. The listing realtor called me and asked me if there was anything they could do. I said yes the seller has come down and I have come up, but the only one who’s holding fast is you. If you really want to make the sale reduce your commission, which they did.

Fast forward to the closing. Everyone was sitting around the table when the broker who had agreed to the reduced commission got up and said “there’s been some talk about reducing commission, on principal I’m not going to do that.” I said “Jim, I understand, I’m a man of principle myself. I see you have a calculator in front of you. Just so we all understand the math, can you do a quick computation for me?“ He said absolutely. I thanked him and said “can you take 6% and multiply it times zero, because on principal I won’t do business with someone who doesn’t keep their word.” You could’ve heard a pin drop in the room. I said that I’m sorry that Jim wasted everyone’s time and got up to leave. Jim said “ wait a minute, wait a minute, we can figure something out after we close.“ I said “well actually we can’t Jim since we’ve already established that you aren’t a man of your word, but what we can do is you can write me a check right now, in the amount that I tell you, and as long as you’re willing to do that I am willing to go forward in deference to everyone else in the room.” I came up with a new number that exceeded what he would’ve had to give me had we kept the original deal. As he went to write the check his hands were shaking so badly he had to excuse himself and run out in the hallway to be able to do it.

I’ve been living here for almost 40 years now and have socialized with both of the listing realtor and my realtor, but never the broker, oddly enough.

Bottom line is, if you’ve got a good listing, brokers will rush to list it and to sell it as long as you were using local agents. If, however, you use an out-of-town agent, the locals will never take anyone to look at it.
 
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XLCenterFan

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Yes, we need to do more to help people who are selling their $2M houses.

They are suffering.

Ok captain obvious. I agree with you here, but that’s not the angle I was thinking of.

I was just thinking that selling a house is selling a house, and that you shouldn’t necessarily garner 2.5-3% of every transaction, regardless of the price. I always thought the percent commission was a bad way to charge and needed to be rethought.
 
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XLCenterFan

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Everyone hates it when someone in another profession has the gall to actually make money for their work.

No one said that pal. What are you in the commission game!? I’m just saying that the percentage commission is a weird and antiquated way to operate in real estate. 2.5-3% of a median value home is about $8,000. For a home that is $2M, it’s about $50k. The marginal amount of work it took to sell the higher valued home doesn’t justify the extra $42k. It’s not even debatable.
 
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No one said that pal. What are you in the commission game!? I’m just saying that the percentage commission is a weird and antiquated way to operate in real estate. 2.5-3% of a median value home is about $8,000. For a home that is $2M, it’s about $50k. The marginal amount of work it took to sell the higher valued home doesn’t justify the extra $42k. It’s not even debatable.

It is debatable. You basically conceded the point already. A lot more is expected of an agent selling a $2 Million home.
 

BParkDog

I will see number 5.
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No one said that pal. What are you in the commission game!? I’m just saying that the percentage commission is a weird and antiquated way to operate in real estate. 2.5-3% of a median value home is about $8,000. For a home that is $2M, it’s about $50k. The marginal amount of work it took to sell the higher valued home doesn’t justify the extra $42k. It’s not even debatable.
After fishy and the other guy took you to task, I really thought twice about responding to you, but . . . the Guinness has kicked in, and I'm feeling a twee bit ornery.
So, here goes . . .
Your opening line was, essentially, a statement that there "should be a cap" on what an agent can charge a client.
Agents are hired by clients through a device we call a "contract."
Agents do not use force, induce duress, threaten, blackmail, or otherwise coerce clients to execute said contract.

Ergo, the Agent/Client relationship is a contractual relationship freely entered into by two or more individuals exhibiting free will. Within a democracy. Wherein said right to contract is guaranteed by the constitution.

Your suggestion is, essentially, one that supposes that the government would be better able than the home sellers themselves to determine what people above your putative cap should pay for an agent. That sort of government control of prices is . . . socialistic. Socialism is not here yet young fella - slow your role.

As Fishy pointed out, your suggestion, which is paternalistic and economically unsophisticated, outs itself as goat turd because the obvious impact would be to artificially restrict the agent supply at the high end and save commission for all the rich bozos who own homes valued above your cap, which would save them money but reduce their choices.

Finally, the difference between a great realtor and a so-so realtor on a 2 million dollar house will easily be more than the 3% they're making.

In sum, you're underqualified to run a Christmas Club account at your local bank.
Also, change your avatar. When I see your avatar
1609290505610.png
it makes me think of my avatar
1609290529852.png
, and I'd guess that Fishy thinks that your visage is "throat punchable."

YOU LOSE SIR.
YLGDS.jpg
Good day.
 
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