real estate agent Archives

Who Writes Up A FSBO Contract

A good question to ask when you’re selling your house yourself is who fills out the FSBO contract? As the seller, you do, mostly. That’s because you have the most to lose if it’s not done properly. Once you and your buyers have come to an agreement, whether it’s in person, by telephone or by email you need to get all the contracts and state disclosures in order. As the seller you need to do that.

Working With A Real Estate Agent

The buyers agent draws up the contract in a typical real estate transaction involving real estate agents. If you’re willing to work with a buyer’s agent then the agent will do all of the paperwork with legal contracts and disclosures. They will do all the work.

Working with only a buyers agent still saves you half the commission normally paid to real estate brokerages.

Working Without A Real Estate Agent

But, if you aren’t willing to work with a real estate agent, and there’s nothing wrong with that, then you, as the seller, should take on the responsibility of working through the transaction. That means making sure all the FSBO contracts and associated paperwork are completed correctly and fully. It will be your job as the seller to work through the process and keep everyone in the loop. That includes the buyer, title or escrow company and the buyer’s lender if financing.

The contract you use will likely have contingencies written in. Most real estate transactions are contingent on buyers being able to obtain financing, the appraisal, and a home inspection.

As the seller it will be your responsibility to keep the transaction moving forward.

FSBO Contract

Where does a seller get the necessary FSBO contracts and disclosures? Most tile companies or escrow services will have some form of a contract you can use. The federal required lead based paint disclosure and pamphlet you can find free from the EPA website.

A better option is to find a complete state specific real estate contract package on-line that are drawn up by legal professionals. There are several companies that provide such a service, at a small cost.

You, as the seller, will personally fill out the FSBO contract. The two parties will need to meet and go over everything. This is a good time to collect the earnest money from your buyer. Make sure you let him know to bring the earnest money upfront before the meeting. After you have sat down, gone over the contract and agreed on the terms, you both sign.

And then you’re done. As mentioned above it is in your best interest if you take the reins from here and facilitate the rest of the process through to closing.

It’s really not that difficult.

Should You Sell Your House Yourself?

by Joel Weihe

Handing over cash for house in front of beautiful new home.

When it comes time to sell your house you may wonder should you sell your house yourself? By selling your house yourself you’ll save having to pay a listing agent and possibly no agent at all. That could be a lot of money.

Sounds like an easy answer, huh. Not so fast.

Opportunity Cost

There’s a thing in economics called opportunity cost. Opportunity cost is the potential loss or gain you get from choosing one alternative over another. By doing one activity you’re giving up doing something else that you could be doing. You’re giving up an opportunity.

Specifically, the most highly valued opportunity or alternative forfeited when a choice is made therefore every time you make a choice you incur an opportunity cost.

Economists use it to figure out what activity is the most profitable. So what does the concept of opportunity cost mean to a home seller? It can help you decide should you sell your house yourself?

The average home price in America is $260,000. The average real estate commission is six percent of that, which would be $15,600. That sounds like a lot of money and to most people it is. To others it might not be. It’s all relative and depends on what one’s time is actually worth.

How To Decide If You Should

Selling your house yourself and not having to pay a real estate agent saves you money. If you only make $75,000 a year, it may be more profitable for you to sell your house yourself. $75,000 a year works out to $6,250 a month before taxes. If you own an average priced house selling your house yourself would be like earning a little more than 2 months of work. That’s substantial.

But say you make, like, three million dollars a year. That’s $250,000 a month. It might be more profitable for you to pay somebody to sell your house because you can use that time to make more money doing other things that are more profitable.

Of course, if you make 3 million dollars a year you may own a more expensive than average home but for comparison sake we’ll use that average number, $260,000. To get the point across.

What if you own your own business? And you make millions. Again, it would probably be more profitable for you to hire someone to sell your house for you because your time is worth more money than you would save.

When deciding if you should sell your house yourself you incur opportunity cost. Your giving up one thing to do another.

It all comes down to how much money you put in your pocket. For most of us average people? That’s selling your house yourself and saving thousands of dollars in real estate commissions.

Where Does A FSBO Get a Real Estate Purchase Contract

by Joel Weihe

happy young couple Counting the money saved by selling their house themsives.

The big question when selling your house yourself is where does a FSBO get a real estate purchase contract? Where do you get the paperwork?

Paperwork. A pain in the ass. Gets in the way of everything. But always necessary. If you could sell your house like you sell a car…on Craigslist, that would be nice. It’s actually almost that easy.

Real Estate Investment?

So I just got back from showing an investor a house and he asked me, would this be a good investment?

And I said, well, if you live there a while to build some equity and you sell it yourself, it could be a good investment.

He asks me,”sell it myself, what do you mean?” “What I mean is if you sell your house yourself, without hiring a real estate agent, it could be a good investment because you’ll keep your money instead of giving it away.”

Have you ever thought about selling a house yourself, I asked him?

And he told me, like most people do, I would not know the first thing about all the real estate purchase contract and paperwork.

Well, two things.

Paperwork & The Purchase Contract

First, there’s a lot more paperwork involved when you hire a real estate agent. Real estate agents need a lot of paperwork to cover their ass. Secondly, when you hire a real estate agent, that’s what eats deep into your profits. That makes the purchase a not so great investment.

The paperwork is not that big of a deal.

Filling out the paperwork is not that tough. When I sold my first house as a real estate agent, nobody trained me, nobody showed me what to do and there was no one there to teach me how to fill out the paperwork.

I got the contract, read it, filled in the blanks and I figured it out. Sold my first house just like that. Granted I had access to all the real estate purchase contracts and paperwork. I am a Realtor so that made it a little more convenient for me. Today all that is available to consumers online and easily accessible. The point is do not let the paperwork scare you. You can find real estate purchase contracts drawn up by attorneys that are amazingly simple to use. Like color by numbers. They’re sold all over the internet.

Here’s a link here, for example, where you can buy a state specific real estate package including purchase contract and any required disclosures. There are others, just google it. Most title companies or escrow offices have some sort of contract you can use too. Personally, I would recommend spending a little money and getting a state specific real estate purchase contract with all the legalese taken care of.

FSBO

The rest of it leading up to a contract? Getting your house ready to sell, pricing your house correctly, marketing your for sale by owner and what to do once you find a buyer. I can show you all of it. You can sort through my blog posts or YouTube videos or you can get it all packaged up in order of steps.

Either way you and your family will be incredibly happy with all the money you’ll save by selling your house yourself.

How Much Money Does A Realtor Make

by Joel Weihe

Have you ever wondered how much money does a Realtor make?

According to the Bureau of Labor Statistics, the latest data from May of 2019, the average real estate agent makes $45,990. According to some more recent data from salary.com, the average agent makes $42,183. Notice that’s a little bit lower.

In this video I discuss how much money a Realtor makes, the realities of that and how much long it actually takes to start making money. And why it still costs so much to hire a real estate agent.

Anyone you know who is planning on selling a house now or any time soon, subscribe to this channel because I’m going to show you how you can save, or make, if you will, thousands of dollars by selling your house yourself.

Hi, my name is Joel Weihe. I’ve been making money selling real estate since 2009.

The Money A Realtor Makes

The real estate business is kind of like most other businesses in that it uses the 20/80 rule. 20 percent of the agents make 80 percent of the money. Top producers make an average of $112,000 a year. Then you’ve got your mega agents that can make a half a million or more. Some agents that work with the super-rich. They can make millions of dollars a year. In this article we’re just talking about the average agent with the average price house in the average market in the average America.

There are plenty of real estate agents out there that make a good living, 40 or 50 grand a year, which is average. The money a Realtor makes varies widely. 10% make less than $23,000 and 10% make more than $110,000

There are also a lot of agents that wash out. In fact, according to the National Association of Realtors, 80% of real estate agents wash out within the first five years. And there’s other data that says that 80% only last two years. Agents cycle in and they cycle out.

Agents

Right now, at the beginning of 2021, we have a glut of agents. It makes the salaries go down a bit. Plus, the market is so low on inventory. There are a lot more agents and a lot less houses to sell. That mostly means that more agents wash out or the lower agents make less money. Simple supply and demand.

Most of the top producers and the agents that have been around for a while are going to keep their salary about the same. Of those agents that wash out, you get agents that come in and they sell maybe one to three homes in the first couple of years. It’s just not enough money for them to make it. There are also a lot of bills and expenses, sometimes agents even end up in the hole.

There are what are called DNA agents. Those are agents that come in, get their license and they sell to their family and friends until those family and friends run out. Once the easy money is gone, their gone.

We also have part time agents. Some part time agents do really, really well. They have a full time job and a side hustle selling real estate.

It’s not easy money. The beginnings of a real estate career can be difficult. For those that hang in and survive the first few years it can be very rewarding.

My Career So Far

My first year in real estate, I made $12,000. I literally had to borrow money to make ends meet. After my second or third year, I started making a little more money, enough to get by and start paying back that money that I borrowed. By my sixth or seventh year I was making in the lower six figures and that was nice. That was pretty cool. I was getting to travel. I was getting to save some money and do some other things that I wanted to do.

As time rolled on I didn’t really start selling more real estate. I just started working less hours. Now I work between 20 and 25 hours a week and I still make in the low six figures. That’s what I want, more time. Someone else may want more money, and that’s very possible too.

Agent Expenses

To sell a house cost between five and seven percent of the contract price. And out of that five to seven percent, the agent has to pay his broker. That’s generally in the area of around 30 percent. If that broker belongs to or owns a franchise like Keller Williams or Berkshire Hathaway or something like that, they take their cut too.

And then there’s dues. Real estate agents pay dues on the local level, the state level and the national level. There’s expenses like gas and websites and maybe office space. Some brokers charge you when you print and they charge you for all the little extras that may be used.

Another big expense these days are so called entrepreneurs using the Internet to steal business that would otherwise go directly to agents. These “entrepreneurs” start a company, go online and they advertise for to consumers looking for realtors. It works like, if you need a realtor click here, you click on that button and then they sell your information to a real estate agent. A real estate agent pays for those leads, is what we call them. That can get costly.

Most new agents must buy those leads to survive. After you’ve been a real estate awhile you develop a database from all your past clients and you try to work mostly on referrals. But those early years can get expensive. Sometimes real estate agents actually end up in the hole. Those are the ones that are more likely to wash out.

Realtors Are Expensive

That’s why it still costs you so much money to sell a house. I mean, even with the advent of internet sites like Zillow, Realtor.com and all these websites that make real estate so much easier these days. Despite the money a realtor makes the buyer is actually doing a lot of the work by finding houses on their own on Zillow and sites like that. Still, that five to seven percent commission is cut up into many smaller pieces keeping prices high to satisfy all that greed. That pie now has a lot more pieces than it used to.

Some agents are barely making any money at all. And on top of that, you have real estate teams, which is a new phenomenon. That’s an agent, not a broker, just an agent that has less experienced agents working underneath them. They also take a cut of those agents pay and plus they take credit for all the homes that those agents sell.

On average a real estate agent can make about 50 grand a year, the ones that have been around for a while. Agents can work their way up to six figures, but it’s still going to take time.

Whatever a Realtor does make it comes out of your pocket. To avoid that expense considering selling your house yourself. You’ll save thousands of dollars and be happy you did.

I’ll show you how

Watch the video, like it and subscribe to this channel.

Why It’s Easy To Sell A House

by Joel Weihe

House with a For sale By owner sign in the front yard — Sell your house yourself

I will tell you why it’s easy to sell a house in this real estate market. In a nutshell, it’s because there are not enough homes for sale to satisfy buyer demand. There are a lot more buyers than there are homes for sale, therefore buyers are battling over homes for.

How it Works To Sell A House

For example.

I listed a house last week, and it sold in 4 hours. The amazing part is I sold that house exactly one year and 4 months ago for $175,000 to this guy. We listed it for $190,000 and got an offer, a full price offer, in the first 4 hours. The guy made $14,000 in a year, minus the $10,800 he paid me and the other real estate agent to act as middlemen for him.

What does that tell you about this real estate market?

One thing it tells you is he could have easily sold that house himself and kept that $10,800. It’s easy to sell a house yourself.

Houses are getting listed on the internet sites like Zillow and Trulia and that’s where consumers are looking.

Consumers are finding those houses on their own. Then they call their realtor and asking to see it.

Step by Step

In this section I will lay it out for you step-by-step.

When you sell a house, the first reaction is to call a real estate agent. The agent comes and meets with you for 45 minutes. They fill out some paperwork and list your house on the multiple listing service for $320,000. The Multiple Listing Servise, or MLS, is the proprietary service where Realtors list homes for sale.

The MLS then distributes that listing to all the different internet real estate sites like Zillow, Trulia, Realtor.com and dozens of others.

There’s someone out there that has decided they want to buy a home. They open up the internet, search Zillow and see the house that your real estate agent listed, yours. They call their real estate agent who writes an offer for them and sends that offer to your agent.

Your agent calls and tells you about it. You either accept it or send a counter offer. Eventually you come to an agreement with the buyer. You both sign a contract. 30 days later you go to closing and the real estate agents collects $19,200.

Wow, $19,200 that you could have had to spend, or save. Think about what you could do with $19,200.

This Market is Different

A seller can sell their home themselves in any market it doesn’t matter if it’s a seller’s market or buyer’s market.

What’s particular about this current real estate market and why it’s easy to sell a house? I’ll tell you that this is the most active, fast-moving Market I’ve seen in my 11-year career. In fact, before I became a realtor I was a project manager for residential builders for 20-plus years. So in all my 30-plus Years Around real estate I have never seen a market like this. For instance even the great housing bubble of the early 2000s was not this crazy.

All around the United States, the housing market is super low on inventory. Simple supply and demand metrics are driving prices up making homes sell fast. As a result people are putting their houses on the market and if they’re priced right and presentable they’re selling in one, two or maybe three days.

Realtors are making thousands and thousands of dollars to sell a house that sells itself. Home sellers could easily keep that money.

I’m not complaining, I’m one of them, I’m a real estate agent, and the money is good. I like it. But it’s unnecessary for you to be spending that money.

Sell your house yourself. Keep your money. Put it to better use.