6 Money-Saving Lessons in Buying and Selling Real Estate

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Real Estate

Lesson 1: Don’t be afraid to negotiate the commission with your realtor.

Commissions, by law, cannot be fixed by the real estate industry, even though almost every realtor will quote virtually the same percentage. Fees are negotiable to the extent the realtor is willing to do so. If you hire a realtor to help you find a home and also list your current home with that realtor, then they will often negotiate their fees. I’ve also had realtors reduce their commission to help close a deal that was not quite coming together.

Lesson 2: Always obtain a home inspection by a licensed, experienced, highly recommended inspector.

Inspections can save buyers from making costly mistakes. A home inspection once saved me from untold headaches when I made an offer on a home to be sold “as is.” The inspector found that there was an old heating oil tank crammed into a narrow dirt crawl space adjacent to a small basement. Removing the tank could have been a financial nightmare. It contained unused fuel oil and would have likely caused hazardous contamination of the soil when it was cut to be removed. That bit of information was a legitimate deal breaker since it was a “material fact” that the seller or realtor should have known and disclosed, even in an “as is” sale.

Lesson 3: You can sell your own home and save substantial money, if you do your research and follow the rules.

For Sale By Owner, FSBOs as realtors refer to them, are another route to selling a home. You can absolutely sell your home yourself. Selling the home yourself will eliminate the realtor fee, often as high 6%. Be willing to discuss honestly your potential buyers’ questions and concerns. A buyer should do their due diligence by checking with the county and city for any zoning questions or other issues involving the neighborhood. If a deal is made, then the lender will require a termite/pest inspection and probably an appraisal. Hire a real estate attorney to finalize the closing paperwork.

Lesson 4: Never get in a hurry to list your FSBO with a realtor just on a flimsy promise that they have an “eager” buyer.

Several years ago, I advertised my home as for-sale-by-owner, hoping to save some money by not hiring a realtor. Almost immediately, I got a call from a realtor who told me that she had a potential buyer who was very interested in the house but that she wouldn’t show it unless I signed a listing agreement with her. It’s funny that the “very interested buyer” never materialized. When the house was sold by another real estate company, she got her easy listing commission.

Lesson 5: Always do your own zoning research prior to making any offer to purchase a property.

In one case, I made an offer to purchase a property through an established realtor who had sold many properties in the area and who was also representing the seller. By calling the county zoning board myself, I learned that the property was located in a critical watershed area and would require almost twice as much acreage as was in the original listing in order to obtain permits to build a house and install a septic system.

Lesson 6 : Make sure there is deeded ingress and egress – a driveway.

After I purchased a small farm and started clearing the land, an adjacent landowner decided to enforce his right to block the road that ran through the edge of his property to mine. Even though there had been an unwritten agreement for many, many years that there was ingress and egress by way of a gravel road to my land, the current (more recent) owner decided to enforce his right to refuse passage through his property, even extending his pig farming operation across the gravel road so that it was impossible to cross it. The road had never been officially deeded as an easement into the property, essentially rendering my farm useless, without a court fight.

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