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ANR1211
My loves
Member since 2/11 2131 total posts
Name:
A
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BEYOND angry with REA
DH & I agreed to sell our house for a certain amount. Then, we were told that the price would be elevated to cover the buyer's closing costs, so she would pay x amount above the asking and we would pay her closing (x amount).
Well, closing is a few days away and I just found out when the contracts were drawn up, we wind up getting a few hundred less for the house than we originally agreed upon because we're paying more in closing costs for the buyers than the price was inflated! I am LIVID with my real estate agent because she drew up all the numbers. My lawyer seems to think she should drop her commission the amount (~$250) so we walk away with our agreed upon price, but I don't know if I have any legal right to make her do that.
I know $250 isn't A LOT of money, but we have a lot to do in the house when we get in there and we have a baby on the way.
What do I do?
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Posted 8/23/12 5:13 PM  |
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Prudential Douglas Elliman Real Estate
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Karen
Just chillin'!!
Member since 1/06 9690 total posts
Name:
Karen
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Re: BEYOND angry with REA
Honestly, for $250 I would let it go. That is probably a very small fraction of the overall purchase price.
Closing costs is a constantly changing number - how would they even know at contract time what the exact closing costs would be?? $250 could merely be the difference in property taxes for a few days.
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| Posted 8/23/12 5:21 PM |
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Mrs213
????????
Member since 2/09 18986 total posts
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Re: BEYOND angry with REA
Posted by Karen
Honestly, for $250 I would let it go. That is probably a very small fraction of the overall purchase price.
Closing costs is a constantly changing number - how would they even know at contract time what the exact closing costs would be?? $250 could merely be the difference in property taxes for a few days.
I agree, I would let it go 
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| Posted 8/23/12 6:33 PM |
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Re: BEYOND angry with REA
It sounds like what you are talking about is a seller's concession, which allows the buyers to roll their closing costs into their loan instead of paying cash out of pocket for them.
There are limitations -- set by banking rules -- on how much can be rolled in. So an FHA buyer can do up to 6%, for example, and for a buyer getting a conventional loan, it depends on how much money they are putting down. So it's not usually calculated as what the exact closing costs will be -- it's usually in the contract as a maximum percentage to make sure costs are covered.
But regardless of the amount, the seller isn't paying for it - the buyer is adding it to their loan amount. The parties usually negotiate the price of the home, and the seller is then told that the buyer will be adding an x% seller's concession on top of the net price to the seller. So if the seller agrees to sell the house for $300K with the undertstanding that the buyer is adding 6% for a seller's concession, then the contract price will be $318K (and the house must appraise for $318K, the down payment is based on $318K, etc., because there can only be one purchase price).
When I negotiate a sale like this, I then give all of the relevant info to attorney for my client, who then prepares the contract and handles the closing. I make it clear that the seller is supposed to get x amount without the seller's concession being factored in. Then, as an agent, it's really out of my hands once it is handed to the attorneys for contract.
So if there was confusion about what you were going to walk away with, based on the numbers that were in the contract, it sounds like your attorney may have been the one to make the oversight (or at least maybe he/she didn't explain how the contract would play out), assuming you are on Long Island/metro NY (I know it other areas, real estate agents take a more active role in prepping the contract). Even if your agent somehow presented slightly off numbers to you (was it her buyer, too, or did the buyer have their own agent), it seems the attorneys would have worked it out at contract and your attorney would have explained to you what you would net at the time you signed the contract.
But I don't know all the facts and you said your attorney agrees the agent was at fault, so maybe I am missing something.
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| Posted 8/23/12 6:57 PM |
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ANR1211
My loves
Member since 2/11 2131 total posts
Name:
A
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BEYOND angry with REA
I understand some people just saying let it go, but if you were told you had to pay an extra $250 for something (anything really) that you weren't supposed to, wouldn't you be mad?
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| Posted 8/23/12 7:01 PM |
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Karen
Just chillin'!!
Member since 1/06 9690 total posts
Name:
Karen
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Re: BEYOND angry with REA
Posted by ANR1211
I understand some people just saying let it go, but if you were told you had to pay an extra $250 for something (anything really) that you weren't supposed to, wouldn't you be mad?
In another aspect of my life, maybe. But this is home ownership and $250 is so little compared to the overall proceeds of a home sale.
Did you ask specifically what the discrepancy is?
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| Posted 8/23/12 7:15 PM |
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ANR1211
My loves
Member since 2/11 2131 total posts
Name:
A
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Re: BEYOND angry with REA
Posted by Karen
Posted by ANR1211
I understand some people just saying let it go, but if you were told you had to pay an extra $250 for something (anything really) that you weren't supposed to, wouldn't you be mad?
In another aspect of my life, maybe. But this is home ownership and $250 is so little compared to the overall proceeds of a home sale.
Did you ask specifically what the discrepancy is?
Yes, for a house, it is a small fraction, but imagine paying a small fraction in everything you buy -- an extra dollar for dinner, two dollars when you shop for groceries...it adds up. I don't think we should pay anything over what we are supposed to.
This is not normal closing payments -- we have plenty of those that came up at the last minute -- this is our first time selling a house. We recently found out that the selling price for our house was incorrectly written up for $250 less than we agreed to. It's just a ridiculous thing to have to deal with. If I let every instance of being charged the wrong amount, it would add up.
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| Posted 8/23/12 8:09 PM |
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Karen
Just chillin'!!
Member since 1/06 9690 total posts
Name:
Karen
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BEYOND angry with REA
If the selling price is listed incorrectly in your contract, you should be mad at your attorney, not your REA. It's the attorney that drafts and reviews the contract, no? What price is on the binder that your REA gave you?
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| Posted 8/23/12 8:17 PM |
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ElizaRags35
My 2 Girls
Member since 2/09 20494 total posts
Name:
Me
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Re: BEYOND angry with REA
Posted by ANR1211
I understand some people just saying let it go, but if you were told you had to pay an extra $250 for something (anything really) that you weren't supposed to, wouldn't you be mad?
Annoyed, yes. But livid? Unlikely.
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| Posted 8/23/12 9:12 PM |
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Domino
Always My Miracle
Member since 9/05 9923 total posts
Name:
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Re: BEYOND angry with REA
Posted by Karen
If the selling price is listed incorrectly in your contract, you should be mad at your attorney, not your REA. It's the attorney that drafts and reviews the contract, no? What price is on the binder that your REA gave you?
This. If you have a beef, then I would tell your attorney to eat the $250 from the legal fee. However, an argument could be made that you reviewed the contract and signed it.
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| Posted 8/23/12 9:15 PM |
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SecretTTCer
LIF Adult
Member since 6/08 2284 total posts
Name:
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Re: BEYOND angry with REA
Wow! You should be happy that you sold your house in this market. $250 is nothing in the grand scheme of life. It is not worth the rise in blood pressure it is causing you.
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| Posted 8/23/12 10:42 PM |
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Tine73
Member since 3/06 22093 total posts
Name:
*********
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Re: BEYOND angry with REA
Posted by Karen
Honestly, for $250 I would let it go. That is probably a very small fraction of the overall purchase price.
Closing costs is a constantly changing number - how would they even know at contract time what the exact closing costs would be?? $250 could merely be the difference in property taxes for a few days.
I agree.
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| Posted 8/24/12 12:25 AM |
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KLSbear
LIF Adult
Member since 1/06 1908 total posts
Name:
Karen
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Re: BEYOND angry with REA
Posted by ElizaRags35
Posted by ANR1211
I understand some people just saying let it go, but if you were told you had to pay an extra $250 for something (anything really) that you weren't supposed to, wouldn't you be mad?
Annoyed, yes. But livid? Unlikely.
$250 isn't worth the aggrevation. We had our final walkthrough and things affixed to the walls are part of the sale unless excluded. When we got in after closing we found decorative curtain rods and a large bathroom mirror had been removed. They also took the chandelier in the dining room leaving a crappy little replacement although we had advance warning on that - after we signed the papers the RE agent told us that the seller forgot to include that on the paperwork. Annoying and at least $250 to replace them all, if not more but as someone pointed out, on a percentage basis compared to the selling price, not enough to stress over.
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| Posted 8/24/12 12:31 AM |
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Cheeks24
Living a dream
Member since 1/08 8589 total posts
Name:
Cheeks
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Re: BEYOND angry with REA
Posted by Domino
Posted by Karen
If the selling price is listed incorrectly in your contract, you should be mad at your attorney, not your REA. It's the attorney that drafts and reviews the contract, no? What price is on the binder that your REA gave you?
This. If you have a beef, then I would tell your attorney to eat the $250 from the legal fee. However, an argument could be made that you reviewed the contract and signed it.
Agreed. Didn't you look at the numbers when you signed the contracts?
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| Posted 8/24/12 9:06 AM |
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Bearcat
Love my little girls!!! <3
Member since 6/10 10818 total posts
Name:
E
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Re: BEYOND angry with REA
Honestly, didn't you sign the contract? If there was a mistake in the contract, and yet you signed it (which indicates that you reviewed it and approved), you really have no leg to stand on.
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| Posted 8/24/12 9:56 AM |
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MrsDrMatt
Live and RUN like a Ninja!
Member since 5/06 3104 total posts
Name:
MrsDrMatt
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Re: BEYOND angry with REA
Posted by Bearcat
Honestly, didn't you sign the contract? If there was a mistake in the contract, and yet you signed it (which indicates that you reviewed it and approved), you really have no leg to stand on.
I agree
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| Posted 8/24/12 11:55 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: BEYOND angry with REA
Posted by Karen
Honestly, for $250 I would let it go. That is probably a very small fraction of the overall purchase price.
Closing costs is a constantly changing number - how would they even know at contract time what the exact closing costs would be?? $250 could merely be the difference in property taxes for a few days.
Seller closing costs are usually pretty static and don't change. You have a 1% transfer tax and a very small state transfer tax.
The attorney should have had the buyers increase their offer by a few hundred to cover the costs of these added closing costs.
If I agree to sell a house for 400k, I know I am paying about 4,000 (give or take) in closing costs. If they then want a seller's consession of 20k added that's another $200 in closing costs the seller now has to pay.
Why should the seller have to eat this $200 when the buyer simply doesn't have enough money to bring to the table (causing the seller's concession in the first place).
Either the RE or the Seller's attorney should have increased the contract offer to 400,250 to cover the added costs. Somebody dropped the ball on this and yes I would be pissed at somebody, even over $200 bucks.
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| Posted 8/24/12 1:13 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: BEYOND angry with REA
Posted by Century 21 Dallow - Christine Braun
But regardless of the amount, the seller isn't paying for it - the buyer is adding it to their loan amount. The parties usually negotiate the price of the home, and the seller is then told that the buyer will be adding an x% seller's concession on top of the net price to the seller. So if the seller agrees to sell the house for $300K with the undertstanding that the buyer is adding 6% for a seller's concession, then the contract price will be $318K (and the house must appraise for $318K, the down payment is based on $318K, etc., because there can only be one purchase price).
As a RE i am not sure why you are saying this when you should know that the seller is paying closing costs based on the purchase price of the house. The seller most definitely pays for added closing costs on a seller's concession.
And technically on a seller's concession, the RE might even make more money as the purchase price increased... thus more commission for the RE. I would think the RE would base their commission on the real price and not the concession added, but the seller still pays for the added transfer tax.
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| Posted 8/24/12 1:16 PM |
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computergirl
LIF Adult
Member since 5/05 3118 total posts
Name:
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Re: BEYOND angry with REA
Posted by ave1024
Seller closing costs are usually pretty static and don't change. You have a 1% transfer tax and a very small state transfer tax.
The attorney should have had the buyers increase their offer by a few hundred to cover the costs of these added closing costs.
If I agree to sell a house for 400k, I know I am paying about 4,000 (give or take) in closing costs. If they then want a seller's consession of 20k added that's another $200 in closing costs the seller now has to pay.
Why should the seller have to eat this $200 when the buyer simply doesn't have enough money to bring to the table (causing the seller's concession in the first place).
Either the RE or the Seller's attorney should have increased the contract offer to 400,250 to cover the added costs. Somebody dropped the ball on this and yes I would be pissed at somebody, even over $200 bucks.
Agree with every word of this. However, I wouldn't let it eat away at you as much as it seems to be. Home ownership ends up being one unexpected expense after another... $200 is like one trip to Home Depot, lol.
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| Posted 8/24/12 1:27 PM |
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ANR1211
My loves
Member since 2/11 2131 total posts
Name:
A
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BEYOND angry with REA
I probably shouldn't have been as mad as I was. It's just one thing after another with this RE. SOMEONE dropped the ball and my lawyer is working on it as we speak. Yes, $250 is not a huge deal in the overall scheme of things, but it's still $250! The RE originally did the math (her commission is based upon the price selling, not with the added concession) and submitted it to lawyers. The problem is that the original price was a few thousand over what they wound up negotiating down to, but the percent of closing was based on the first number. It's just annoying.
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| Posted 8/24/12 1:50 PM |
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Re: BEYOND angry with REA
Posted by ave1024
Posted by Century 21 Dallow - Christine Braun
But regardless of the amount, the seller isn't paying for it - the buyer is adding it to their loan amount. The parties usually negotiate the price of the home, and the seller is then told that the buyer will be adding an x% seller's concession on top of the net price to the seller. So if the seller agrees to sell the house for $300K with the undertstanding that the buyer is adding 6% for a seller's concession, then the contract price will be $318K (and the house must appraise for $318K, the down payment is based on $318K, etc., because there can only be one purchase price).
As a RE i am not sure why you are saying this when you should know that the seller is paying closing costs based on the purchase price of the house. The seller most definitely pays for added closing costs on a seller's concession.
And technically on a seller's concession, the RE might even make more money as the purchase price increased... thus more commission for the RE. I would think the RE would base their commission on the real price and not the concession added, but the seller still pays for the added transfer tax.
I am sorry, but that's not correct, based on my experiences. Maybe you have personal experience to the contrary, but I have experience in selling homes where a seller's concession is part of the transaction - as recently as a coule of weeks ago. And that's what I based my statements on.
The majority of the time, the seller's attorney will pay the real estate agents' commissions based on the NET price that the seller is getting. So if the contract price is $318K to include the closing costs, but the seller is getting $300K of that, and the real estate agent's is getting 2%, the commission is $6000 (based on $300K) not $6360 (based on $318K). Arguably, the real estate agent should be entitled to the higher amount, since the negotiated service fee is off of the sale price of the home, not the seller's net. But the seller's attorney pays the real estate fees out of proceeds, they hand over the check to the real estate agent at the closing table. And in all of my experiences, the attorneys use the lower number. And really, it's such a small difference, it's not worth anyone fighting over.
Same with the transfer tax -- YES, the seller traditionally pays the NYS transfer tax ($4 per every $1K of the sale price), but in my experience, the seller's attorney will often negotiate an adjustment with the buyer's attorney so that the buyer pays the overage (so if the closing costs are $20,000 of the purchase price, the buyer will pay $80 to cover that portion of it). But again, it's a de minimis amount.
In reality, a lot of buyers today do FHA loans with the minimum 3.5% down and they take a seller's concession. I am not saying there are no downsides to a seller accepting an offer from such a buyer -- the appraisal is often a concern, for example, given the price is inflated to incorporate the closing costs. But it doesn't usually cost the seller anything in closing costs.
And in my view, the buyer IS paying for it. The seller knows, through negotiations, what they are going to get for the house. If the buyer is willing to pay the seller $300K, the seller will get $300K. If the buyer then chooses to add $15K onto that in order to roll the closing costs into their own mortgage loan, which they will be paying, then how is the seller paying for it? The seller is getting the same $300K either way. It's not as if the parties agree on $300K as a purchase price, and then the seller agrees to take $15K of that to pay for the buyer's closing costs, so that the seller winds up with $285K.
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| Posted 8/24/12 1:51 PM |
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Re: BEYOND angry with REA
Posted by ANR1211
I probably shouldn't have been as mad as I was. It's just one thing after another with this RE. SOMEONE dropped the ball and my lawyer is working on it as we speak. Yes, $250 is not a huge deal in the overall scheme of things, but it's still $250! The RE originally did the math (her commission is based upon the price selling, not with the added concession) and submitted it to lawyers. The problem is that the original price was a few thousand over what they wound up negotiating down to, but the percent of closing was based on the first number. It's just annoying.
I can understand why you are venting... selling and buying homes is stressful! If it's really bothering you, you can always talk to the real estate agent. Usually we like to have repeat customers and referral business, so she may be willing to work something out with you if she truly was at fault. So again - I don't know all of the facts, but if it's bothering you, I would let her know and try to see if you can work it out -- maybe you will feel better for trying!
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| Posted 8/24/12 2:00 PM |
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Serendipity
Summer!
Member since 4/07 7631 total posts
Name:
PrayingWishingHopingALOT
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Re: BEYOND angry with REA
Posted by ave1024
Posted by Century 21 Dallow - Christine Braun
But regardless of the amount, the seller isn't paying for it - the buyer is adding it to their loan amount. The parties usually negotiate the price of the home, and the seller is then told that the buyer will be adding an x% seller's concession on top of the net price to the seller. So if the seller agrees to sell the house for $300K with the undertstanding that the buyer is adding 6% for a seller's concession, then the contract price will be $318K (and the house must appraise for $318K, the down payment is based on $318K, etc., because there can only be one purchase price).
As a RE i am not sure why you are saying this when you should know that the seller is paying closing costs based on the purchase price of the house. The seller most definitely pays for added closing costs on a seller's concession.
And technically on a seller's concession, the RE might even make more money as the purchase price increased... thus more commission for the RE. I would think the RE would base their commission on the real price and not the concession added, but the seller still pays for the added transfer tax.
See for us we did a sellers concession whenw e were buyers. We added X amt of closing costs to the purchase price but the sellers were still just getting the agreed upon sale price (this did not include closing costs). We just did it as a sellers concession so we could finance then rather than pay it up front at closing. We also had to pay the difference in the tranfer tax(which is the tax paid by the seller at closing based upon the SALE price) but bc we technically "inflated" the sale price to do the concession we had to pay that difference in the transfer tax.
But I do know for a fact the closing costs - even though added to the price of the house we paid by US the buyer.
ETA and yes like christine said, the house had to appraise for this new amount now which is why sometimes sellers dont like to do it.
Message edited 8/24/2012 8:09:06 PM.
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| Posted 8/24/12 8:06 PM |
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Serendipity
Summer!
Member since 4/07 7631 total posts
Name:
PrayingWishingHopingALOT
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Re: BEYOND angry with REA
Posted by ANR1211
DH & I agreed to sell our house for a certain amount. Then, we were told that the price would be elevated to cover the buyer's closing costs, so she would pay x amount above the asking and we would pay her closing (x amount).
Well, closing is a few days away and I just found out when the contracts were drawn up, we wind up getting a few hundred less for the house than we originally agreed upon because we're paying more in closing costs for the buyers than the price was inflated! I am LIVID with my real estate agent because she drew up all the numbers. My lawyer seems to think she should drop her commission the amount (~$250) so we walk away with our agreed upon price, but I don't know if I have any legal right to make her do that.
I know $250 isn't A LOT of money, but we have a lot to do in the house when we get in there and we have a baby on the way.
What do I do?
Its sucks to pay more BUT and I mean this nicely....BE HAPPY YOU SOLD!!
If we sold our house and had to pay an extra 250 bucks...I would have been ECSTATIC!! lol
For real ...We couldnt sell so congrats that you DID sell.
Message edited 8/24/2012 8:10:39 PM.
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| Posted 8/24/12 8:10 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: BEYOND angry with REA
at every closing I have even sat thru with a sellers concession- they make an adjustment at the table to cover the difference in closing cost - namley the transfer tax
are you using a real estate attorney who doesn't only real estate transactions?
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| Posted 8/24/12 8:33 PM |
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