Los Angeles Sweet Digs

August 15, 2008

Why My Sale Price Wasn’t Really My Sale Price

21592111 Why My Sale Price Wasnt Really My Sale Price

Last time I wrote about my home sale, I mentioned a few scenarios that could have cost me thousands and thousands of dollars if I had done things differently.

Well, this time around, I’m going to wrap things up with why my sale price wasn’t really my sales price. There are two main reasons why my sales price doesn’t really reflect the true amount of money that exchanged hands. (You can guess how much, but I won’t tell.)

1. The buyers sweetened the deal with a cash sum on top of the sales price that went into escrow. Why did they do this? The only explanation that I got was that one of the buyers (out of the couple) wanted to spend more than the other buyer. Regardless, the commission paid out to the buyer’s agent was slightly less, so who was I to complain?

2. The buyer’s agent only charged a commission of 1.5% and not 3%. Somehow, during the course of the negotiations, the agent dropped his commission from 3% to 1.5% in order to get the deal to happen. That’s quite a drop. Incidentally, the realty company has a mortgage company component to it and I wonder if somehow he got some kickbacks.

If anyone has any theories on why he was able to conduct business with such a low commission (other than desperation), feel free to drop a line.

Posted by Christina Chan on August 15, 2008 7:30 AM | del.icio.us | Digg

  • Thanks for sharing your thoughts, Jan.
  • jan brick
    the reason the buyers paid cash sum on top of the sale price was to reduce their property taxes, which are ca. 1.25% of sale price. not sure that is ethical, and probably borderline legal.

    which is why seller/developers advertising that they are including a car in the deal etc. must be thinking buyers are stupid. the buyer would then be obligated to pay property taxes on that dumb little perk as long as they live in the house. much better to reduce the sale price--but agents and developers want to keep the sales stats artificially high.
  • Yes, the buyer's agent was hired by the buyers. The buyer's agent commission was paid for by myself, the seller.
  • Jean
    Question for you about "the buyer's agent" you mention -- was this an agent hired by the buyers specifically, and whose commission was paid for by the buyers? Thanks in advance.
  • Hannah-

    Thanks for your comment. Although I appreciate your perspective, I wrote what my personal experience was selling the home. The sale is over. It's closed, and I'm moving on to the next phase.

    The point to this post was not to show how much money I made. It was to show that when you look at sales stats, they might not show the true picture. It's something to keep in mind for those who are researching for themselves.
  • Hannah
    This is probably going to sound rude, but can you get off this topic already. You've been writing far too many posts on this same topic.

    Write about the home seller's psychology. Write about how sellers feel their equity is cash and the I-deserve-top-dollar mentality. Write about why from a seller's perspective this "could have cost [you] thousands and thousands of dollars" rather than made you thousands of dollars less.

    From what you've wrote, it sounds like you made good money, even if you would have done things differently and it "cost" you thousands, you still would have made money, just less of it.
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