Buying or Selling a Home/Agent compensation, contract issues
Dear Sir, Thank you very much for volunteering on this site!
I have a few questions. Background: We are selling a house in Louisiana as a FSBO. (We are doing FSBO mostly due to major financial challenges we are about to face).
We have paid an agent $400 to give our home an MLS number for 6 months. As part of the listing, we have agreed to compensate a buyer’s agent some amount. And sure enough, whenever we are contacted by an agent, one of the first things they wish to reconfirm, is if we are indeed willing to pay them a (usually specified amount of) commission.
We just recently received an offer from an agent. (She has the same last name as the buyer and we learned, she is the ex-wife of the buyer).
In conversations with the agent there has not been any mention of compensation for her, nor is there anything in the contract. We are a bit puzzled about this. If it is not in the contract, would she have any legal basis for asking us for anything later?
The offer stipulated – among other things – the following: the buyer wants to rent my house from June 1 till September 1 and then buying it. Buyer doesn’t have a house to sell but we learned he is the Air National Guard and will deploy sometimes in September. (We wonder if maybe the increased pay then is factored in and is the reason, or if he doesn’t want to break his apt lease).
Should I be concerned about the terms of this contract?
How could I make sure the buyer will be able to buy after two months of already living in my house?
What should I put in the contract to protect my interest?
I am thinking about proposing a rental agreement for $40/day – starting on 1 June - until the closing.
But while hoping for the best, would like to prepare for the worst and would like to also propose them an agreement that would state that if by 1 September the buyer cannot buy the home then the agreement will convert to a conventional rental of $1900/month w/ a $5000 security deposit?
Also, should I be concerned that the buyer's agent – as of yet - has not asked for any compensation from me? Could this come up later if it is not in the contract?
Once again, thank you VERY MUCH in advance.
Since I don't have my licenses in your state I will just answer the best I can.
The agent may or may not be getting a commission. She could just be nice and doing it for free, but I would definitely ask. That may set you up to pay a commission, but it is better than the wrong assumption.
I would be concerned about the contract. Once someone moves into the home it is really hard to get them out. I could see maybe a week or 2, but 4 months is a long time.
I would just write a 4 month rental agreement and then once the buyer is ready to buy I would write the contract.
Also, you have to consider your real estate market. If the market is good you may want to just wait for a better offer. It has taken a long time to sell you may just consider this offer.
If you do go the rental way I would get as much money down as they can come to the table with.
I would then tell them that once they buy that money would be put towards closing costs minus and rental fees your have incurred.
I would like to get more specific, but I don't want you to go in the wrong direction.
I would talk to your Realtor. Even though they only listed the home for a few hundred dollars they should have a fiduciary right to help you with the contract and help you at closing.
That is the way it is in Texas. Brokers just can't list your home then ignore you and expect to get paid.
Let me know if you need any other help.