(Also Known as “Serendipitous Showings”)
Teresa Boardman (St. Paul Real Estate Blog) has a nice post giving the agent’s side of why, just maybe, you may not be able to show a prospective Buyer you’ve never met a home on the other side of town at 4 p.m. when they call at 3:10 p.m.
The only thing Teresa is perhaps too kind to to say explicitly is that the home’s list price and legal status can also be factors affecting the Realtor’s response time — or whether they respond at all.
“Thanks, But No Thanks”
So, if the home is a foreclosure listed at $40,000, the Realtor knows — even if the prospective Buyer doesn’t — the following:
–The commission offered to the Buyer’s agent (called the “pay-out”) on such a home is usually about $1,000. And that’s before the Buyer’s agent gives their broker their cut, leaving them as little as half, or $500. Pre-tax.
–Handling a $40,000 sale involves all the steps associated with a $400,000 sale — or a $4 million one.
In fact, because the home is bank-owned, there will be some additional ones as well.
Extra Steps for Foreclosures
For example, most banks dispense with the standard Minnesota real estate forms and substitute their own, sui generis (“one of a kind”) version.
Simply parsing all the undefined or novel terms (see, “Chinese Dry Wall in Minnesota?”) can take a conscientious Realtor with a legal background (like this one) several hours.
–Inspection issues. Foreclosed homes listed for $40k usually aren’t in tip-top condition (surprise, surprise). Even if the sale is “As Is,” getting your arms around the “As Is” part is time-consuming.
So, it may be appropriate to get input from an electrician, plumber, carpenter, roofer, foundation expert, etc. — or all of them.
That’s in addition to navigating the expense and logistical challenges of getting the water turned on — and then back off (such homes are almost always “winterized,” for both expense and liability reasons).
–Response time. In contrast to a traditional sale, representing a Buyer interested in a foreclosure takes three times the effort, because banks are not exactly known for getting back to Buyer’s agents quickly.
Or at all.
For all those reasons, a busy Realtor trying to make a living can balk at jumping in their car to show a stranger a $40k foreclosed home.
Rather than blowing off a such a call, though, a veteran agent will try to hook the Buyer up with a colleague who has the time and interest to work with them.