Remax discussed on Red Hot Real Estate Show


With this from the license fees are licensed realtor from remax results and remind everybody the initial how to get a hold of you as well meaning but let's stop down for a second time out get a hold of you yeah absolutely you can always reach us at AM and red hot real estate dot com but I phone six five one five seven eight two two one eight and we remind people that they should go to your page because there are these ongoing resources for people as they are starting the process of either buying or selling a home absolutely and if you're looking for free market analysis that something that we do offer to all of our listeners so be sure and and reach out to us for that but we're very fortunate to have our general manager Mike manner hiding in studio with us talking a little bit about his wealth of knowledge for the whole I buyer ugly house guaranteed offer all of those things that we're hearing about in the market place now Mike guaranteed offer that's been around for years and years that's not a new thing in the last several years correct no it's not in fact many years ago back in the nineteen eighties a lot of real estate companies used to offer was called a guaranteed sale program and they come out and effectively provide sellers on offer to say okay if you can't sell in the market place in you need to go here's an offer that you can accept if you choose to do so and so it's been around a long time yeah even when I first got my real estate license that there are lots of coaches that talk about the guaranteed sale and so a lot of times are you the person that's offering that guaranteed sale will put a limit on how high a price home that they would do the guarantee for and also they would also offer a certain percentage less than what's the retail price out in the market correct to be able to do that and then possibly also charge a higher fee for doing so so that has always been out there and so I think a lot of people think that this I buyer thing is is just similar to that but no it's it's very simple it is yeah I but I think historically the way the program has operated is been Maura Mandt Pasha level kind of experience in cell wall street's now coming in saying look we can do this in a much more efficient way and therefore we can cut a lot of cost out the at least from our perspective wall street's perspective which means that the money goes in their pocket okay yes rather than necessarily to the consumer's pocket yes so let's talk a little bit about how getting in I buyer offer actually works sure well as we said you can certainly go online and request one we don't believe that that's the best way to do it we really believe that having a real estate professional work with you in obtaining those offers is the best way to do it because they are basically fiduciary they will objectively be able to review but it looks like going down one tracking the retail track and then if you do want to examine an I. buyer offered they'll be able to counsel you on what that looks like everyone's well we want to prise down explain what a fiduciary like how that is is that you're going to have an intermediary this working on your behalf and has your best interests in mind yes and so as a real estate professional when we're working with the consumer we do owe them certain find you sherry duties whereas if they went directly to the I. buyer company what would be the situation well they're working directly with the buyers so they have no one watching out for their interests obviously the IVR companies are watching out for their own interests correct right and so because it is a huge corporate conglomerate you can expect that you know you there's gonna be dollars there it they're very concerned about the the money piece of it yeah from my experience the consumers that I've been talking to their biggest concern is that they're being told that they can keep their house you know just living it like you do and get the best money for possible and no problem no inconvenience but I don't really see it like that the way I see it is that a and and I visited with folks where their houses in perfectly fine condition it's going to require little or no work and so why would you give up all of that difference in what the offer is to retail offer well because the I. bear companies used to words of for what they provide to consumers you're gonna hear this a lot from them that is they offer convenience and they offer a guarantee their offers our our cash there's no financing involved so that makes it easy correct okay convenience and a guarantee perfect so let's talk a little bit about what an offer actually might look like sure so the realistically are are four five parts to the offer depending on the eyewear company that said coming to you with an offer but obviously is the price and as we've mentioned earlier the price can be high it can be low typically what we see are the prices are coming in below retail and I would say anywhere from about five to ten percent of all retail is a fairly common number that we see in the marketplace today so that would be item number one for the benefit of Ann Arbor company bringing an offer to you as a consumer they charge a service fee and that service fee changes depending on the market place that you are in in the country right now locally here in the Twin Cities of companies like open door we know that their fees are anywhere from six and a half to nine percent still offers their fees anywhere from eight to ten percent today currently thanks so that's that's item number two let's talk a little bit more about that yeah so where as in a traditional real estate transaction you don't typically see service fees you see a certain percentage for commission you see like the listing company will have a certain pay out to the buying company and typically you don't see a service fee so when your listing your property with an eye by our company you are chart being charged a commission correct and servicing hi well it's plus backups because they do two different things here all right so when you're selling your home when I bear company your selling directly to a buyer in so effectively there's no real estate intermediary involved okay so the American please simply charging a fee for the benefit of getting their offer in place with you and you accepted their offer okay makes sense a commission from our perspective is look we work for that fee right we're here to help you were a fiduciary for you we provide marketing services and we provide counseling services regarding the transaction okay so there's a difference in what that fee does depending on whether or not a realistic professionals involved or not if you're dealing directly with the I. by our company correct all right okay so the third area is in the inspection and typically day it's very common for all home buyers to get an inspection done prior to ultimately committing to buying the hall we recommend it to obviously to all of our buying clients right correct we think it's a great thing and so I buyer companies do it as well and so we begin to see a little bit of a change in the market place in this is what's happening over time if the I bear company speak developed a reputation for always providing low offers to a consumer all consumers would lose interest okay eventually and say yeah I I know that they offer low prices and so I don't want to deal with them and so what I've companies have begun to do now is they'll give you the retail rate number I'll say okay of this house is worth four hundred thousand dollars will give you four hundred thousand dollars and the buyers jazz cellar just as my goodness that's fantastic well guess what yeah there is no free lunch in this market okay okay and so what they do is now they're going to increase their fees somewhere else in the transaction as we said there's a service fee and in the inspection area what they do is once the inspection is done they monetize everything that's in the inspection that came back to say Hey these are the items that need to be fixed repaired replaced whatever does and they not only monetize the wide at those items but they add a fee on top of that and so this is where the I. bear companies have really become very astute to say look we want to have a reputation in the market place that shows that we pay retail with me because I'm the only thing the only thing the public sees the CRB value right certificate a real estate value once a transaction sold was reported to the county it's the C. R. V. value right right what they don't see is the net the final numbers of the solar walked away with all right in so with the hardware companies are doing is they're padding of course that service fee number there patting the inspection number to a substantial amount of money and then depending on closing cost that's the next item right now closing cost you can't really get away from him no matter which side of the table you're on you're gonna pay those no matter what the last item is with still offer specifically they charge sellers a five thousand dollar what's called hold back okay so this is all cumulative this is All cumulative so this is like one fee for this that and the other thing so the whole back feel let's talk a little bit about that yeah so what happens is that money is placed into an escrow account of the time closing of the buyer A. K. easel has complete control of that money the seller has nothing to say about it and the purpose supposedly of why that money is held in escrow is a solo checks the property to make sure that it's been delivered to them in the condition that they expected it to be delivered to the man and if they find that it has not then whatever money they need to spend to get it to that condition comes out of the escrow account and so how do they calculate the whole back fee is strictly a five thousand dollar flat fee okay so let's just say you have the inspection that's done typically after the offer before the offer it's done after the offer just like any other transaction okay so Zillow chooses the home inspector is that correct are they do but they use a local inspector yeah so the inspector goes and they inspect the property they come up with these things need to be repaired and so then that gets presented to who thank is presented to the seller okay right so they'll come back and say okay now so just like any other transaction that were involved with in the market place there's typically that second round of negotiations takes place yes because okay now we found these things in the inspection report and because of that we want to either have you sell or make these repairs or let's monetize what these involve and let's reduce the price let's do something else let's get a credit back to the buyer let's do something right for the other things that need to be fixed.

Coming up next