Consumer Education | Virginia's Family Realtor | Jeff Shearer

Jeff Shearer

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"Jeff did an excellent job and I would refer him to others in need of a great Realtor."

Bernadette and Andrei

Virginia Real Estate
Consumer Education

Two As Is Conditions

One of the first documents I recommend clients read is Understanding Your Rights and Responsibilities Under the Virginia Residential Property Disclosure Act. One matter that I often get questions about is the as is statement under the caption CONDITION. This is one of two as is statements used in Virginia residential real estate. In this case, buyers are advised to exercise their due diligence to determine the condition of the property and by extension their decision to or not to buy and how much to offer including requests for the seller to make repairs.

The other time buyers may see an "as is" statement is in a listing to sell real estate. In this case, the inference is that the seller will not enter into negotiations for repairs. A buyer may offer a different price than what is stated in the listing. But no matter what price is accepted, the seller will not do anything to repair the property. This does not mean the property is necessarily in tear down condition.

Understanding Commissions, Fees, and Marketing Costs

Surprisingly to me, even experienced home buyers and sellers are sometimes not well versed in the workings of commissions, fees, and marketing costs. Let's start with a reminder that everything is negotiable. Then let's add that there are often more than 2 parties splitting the commission, fees, and costs. One of the "hidden" parties is none other than Uncle Sam who gets as much as 50 percent of the total commissions paid.

Often, both the listing broker and the selling broker get a cut of the commission. One common commission structure charges the home owner 6 percent commission splitting the commission equally among the listing and selling brokers. Agent's are paid based on a contract separate from the listing agreement. It is not unusual for agents to receive as little as 50 percent of their broker's share.

Let's look at the numbers. For a $500,000 house with a 6 percent commission, the seller pays $30,000. Each broker in this example receives $15,000. Often new agents receive as little as 50 percent of their broker's share or $7,500. Out of this, agents pay marketing expenses. Let's say this agent paid $1,000 for marketing costs. New agents are often required to pay a coach or mentor who may charge as much as 40 percent. Another $3,000 deducted from your agent's inflow leaving the agent with $3,500. We will not discuss indirect costs such as association and MLS fees, signs, gas, automobile maintenance, etc. But we will deduct Uncle Sam's portion, lets' use 25 percent, leaving the agent $2,625.

Oh buy the way, I charge 4.5 percent to sellers splitting the commission 2.0 percent to my broker and 2.5% to the selling broker. That saves the seller of our $500,000 home $7,500 from the six percent program previously discussed.

I decided to become a Senior Real Estate Specialist® to help ease the challenges faced by other seniors when they want to downsize or no longer want to be a homeowner.

The challenges can become crippling right at the time when we most need to make important decisions in our life. For example, I have a customer who previously put her home on the market and then withdrew it two years in a row. Then she started to try again, but changed her mind before listing her home.

The challenges can be different for each of us, but I have found the emotional attachment to our homes to be the most significant. Our homes provide us shelter, hold our treasure of memories, and were acquired often through many years of blood, sweat, and sacrifice. Our homes become intimently tied to our identities.

The challenges may also include the need for trusted partners to hold an estate sale, complete repairs, carefully move our belongings, and provide the options to finance our change.

I can provide solutions to these challenges and more when you decide to downsize or you no longer want to be a homeowner.