Cohousing-L Mailing List: re: real estate fees

[Buzz Burrell (72253.2101]

Steve Farley asked:

>Is it standard procedure that a land deal for a coho site is accompanied by
>a real estate commission rather than a flat fee? If so, what percentage are
>we looking at?

I might be misunderstanding your question, because the answer seems pretty
simple.  Purchasing a coho site is handled the same way as purchasing a house,
condo, business, etc.  The Seller lists the property with a real estate agent.
When it sells, The Seller pays the commission (4-8%).  Thats it.  

The Buyer has nothing to do with it.  If the Buyer used another broker, they
will "co-op" split the fee.  If the Buyer contracts for a Buyers broker (which
isn't the same thing), the fee is still paid out of the Seller's proceeds.  An
exception would be if the Seller's agent kept the listing "in house", and not
part of the MLS (Multiple Listing Service), which would be unusual.

If the Seller did not list with an agent, but rather did it him/herself, then
there would be no fee involved.  If you used an agent to make the purchase, then
it would be up to you to pay your agent.

I've never heard of a flat fee for a real estate commission.  You might be
thinking of when lawyers or title companies do the work, which is often a flat
fee, but is not a real estate commission.

>And is there another commission involved when we take our final mortgages
>and move in?

There is all sorts of fees involved in buying and developing property, but the
real estate commission is a one-time fee only (by law) taken out of the proceeds
at the Closing (when the money and Deed changes hands).  You may be thinking of
"points" or loan costs, which are charged by the mortgage company.

General Tips:

1. If you know what you want, and it is not listed, you have an opportunity to
save money.  Split the commission with the owner (take 1/2 off the selling
price);  you both save.

2. Title companies do all the work anyway;  they only get paid $125 for doing a
ridiculous amount of calculations.  You can contract them to do any Closing
yourself (as long as both parties are in agreement).

3. If a property is listed, and you are not using an agent, contact the listing
agent directly.  If they recieve multiple offers, they will help yours get
accepted because they will not be splitting thier commission.

4. Remember the listing agent *always* represents the Seller.

5. Consider (ignoring #3 above and) contracting for Buyer's Agency.  Make sure
it is a person who knows you and knows what you want.  They will then know they
are guaranteed a commission if you do something, and therefor will be much more
dilligent than if you are playing the field.

6. If you are listing a property, keep in mind the commission is negotiable,
although nobody will tell you that.

Buzz Burrell
Paonia, CO