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net listings and options - Posted by tray giddens , Houston
Posted by tray giddens , Houston on June 15, 2004 at 13:36:41:
this message is out there for real estate agents who are also investors.
i’m in texas, more specifically houston. the local mls does not allow net listings… i don’t think that there would ever be any way for the mls to actually find out which are "net " listings versus regular commission listings as they never see a hud -1… it’s also my opinion that every listing is a “net” listing as the sellers always have a net amount that they wish to walk away with and they build the commission and expenses on top of that net amount.
the state has rules regarding net listings and although there are additional steps involved in taking a net listing, these steps are not overly cumbersom (sp) and net listings are legal…
question… do you take net listings or structure an option outside the listing agreement?
i see these as nothing more than options that investors use. just built into a listing agreement…
if you structure an option, do you sell on the mls… you do have an “interest” in the property but not fee simple interest.
am i thinking along the correct lines here… this message may seem a little disjointed or cryptic … but i’m just now fleshing this out in my mind…
your thoughts and input are greatly appreciated…
for you investors who are not realtors, do you list a property that you have an option on?
Tray Giddens
Re: net listings and options - Posted by Chuck Rosenberg
Posted by Chuck Rosenberg on September 05, 2005 at 04:45:52:
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Re: net listings and options - Posted by Wes
Posted by Wes on June 15, 2004 at 17:01:04:
a “net listings” is a little different then knowing their bottom line and adding your commission on it, that is perfectly fine. what a net listings is here is more of a decietful practice by the agent, they are illegal in my state.
what the law means by “net listing” is for example when a seller says I want $100k what ever you get over that you can keep, an agent knows that that property is worth $150k, so they sell it for that and keep the difference. the law is set up to protect the public, as an agent owes the seller disclosure of what the property is worth.
Re: net listings and options - Posted by john
Posted by john on June 15, 2004 at 17:00:25:
As an ex-agent, net listings are prohibited in some states and discouraged in others.
An agent is obligated to try to obtain the highest offer on the property for the seller. If an agent lists a property for 50k net and sells for 90K that is 40K commission.
This leaves the agent open for lawsuits. Not good for seller, agents, or buyers as court might overturne the transaction. Great for lawyers though.
it’s all in disclosure - Posted by tray giddens , Houston
Posted by tray giddens , Houston on June 16, 2004 at 24:09:47:
while legal in texas , the net listing must contain an aknowledgement of the agents true “opinion of value”.
i think that the largest objection is the amount that an agent can earn on a deal…if an owner is selling and he wants to net 100k , and the comps indicate a price range of 110-115k , then the 6% commission plus some some costs cover this amount and the seller can net his desired amount and nobody gripes… however, if the seller needs to net 100k and the comps indicate 125k, then according to texas law , as long as the seller is made aware of the comps amount and agrees to a net listing, that is perfectly fine. however , some would look at this as unethical because the realtor is making "too much " on this transaction…
so, in order to bypass this unethical charge, would it be wiser to give the owner an option for 100k and then market the home and close at 125k then do a double close/flip?
it’s all in disclosure - Posted by tray giddens , Houston
Posted by tray giddens , Houston on June 15, 2004 at 22:27:54:
while legal in texas , the net listing must contain an aknowledgement of the agents true “opinion of value”.
i think that the largest objection is the amount that an agent can earn on a deal…if an owner is selling and he wants to net 100k , and the comps indicate a price range of 110-115k , then the 6% commission plus some some costs cover this amount and the seller can net his desired amount and nobody gripes… however, if the seller needs to net 100k and the comps indicate 125k, then according to texas law , as long as the seller is made aware of the comps amount and agrees to a net listing, that is perfectly fine. however , some would look at this as unethical because the realtor is making "too much " on this transaction…
so, in order to bypass this unethical charge, would it be wiser to give the owner an option for 100k and then market the home and close at 125k then do a double close/flip?