{"id":2198,"date":"2007-11-09T10:46:23","date_gmt":"2007-11-09T17:46:23","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=2198"},"modified":"2007-11-10T23:03:36","modified_gmt":"2007-11-11T06:03:36","slug":"a-consumers-guide-to-the-divorced-real-estate-commission-were-just-sitting-here-at-the-closing-table-watching-the-money-flow","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2198\/a-consumers-guide-to-the-divorced-real-estate-commission-were-just-sitting-here-at-the-closing-table-watching-the-money-flow\/","title":{"rendered":"A consumer’s guide to the divorced real estate commission: We’re just sitting here at the closing table, watching the money flow"},"content":{"rendered":"

Part III: The who-pays-whom of real estate is not as simple as you might have thought…<\/b><\/p>\n

All right, let’s go buy a house. I want to talk about the flow of money in a real estate transaction, and there is no better way of understanding that flow than wading right out into the middle of it all.<\/p>\n

So let’s buy a house for $100,000. Where I live, in Phoenix, a hundred grand will get you a grungy dump. Where I grew up, in downstate Illinois, a hundred-thousand dollar house will put you among the diamond-crusted elite. Either way, it doesn’t matter. We’re not buying this house to live in it, but just so we can see who gets paid and how.<\/p>\n

I want for us to buy this house with 100% financing — nothing down! — even though that kind of loan isn’t as easy to get as it used to be. Even better, I want you to take 3% of the purchase price as a concession from the seller to defray your closing costs. You’re going to have to put down an earnest deposit to show that you’re serious, but I like $500 for a house this cheap. Not only that, but, since there is going to be money left over from the closing costs concession, you’re actually going to get your $500 back at Close of Escrow.<\/p>\n

Isn’t that cool? You just took possession of a $100,000 asset for not one red cent out-of-pocket. You bought a house for nothing.<\/i> This is not a fantasy. I’ve done this for dozens of clients. But before you get on the phone to all your friends, telling them about your amazing financial skills, stop and think for a minute.<\/p>\n

Did you just buy a house for nothing, or did you buy it by promising to make monthly payments for up to thirty — or forty — or fifty — years for principle, interest, taxes, insurance, HOA fees and private mortgage insurance?<\/p>\n

Your lender pushed $100,000 onto the closing table, but he did it on the strength of your promise to pay all that money back and then some. Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Part III: The who-pays-whom of real estate is not as simple as you might have thought… All right, let’s go buy a house. I want to talk about the flow of money in a real estate transaction, and there is no better way of understanding that flow than wading right out into the middle of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[6,5,30],"tags":[],"class_list":{"0":"post-2198","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-marketing","7":"category-real-estate","8":"category-supplanting-the-nar","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":155,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/155\/how-to-turn-100-into-27000-in-eight-years\/","url_meta":{"origin":2198,"position":0},"title":"How to turn $1.00 into $27,000 in eight years . . .","author":"Greg Swann","date":"July 29, 2006","format":false,"excerpt":"That sounds like a late-night TV pitch, but it's actually possible in residential real estate. Housing is distinct from other investment vehicles in important respects. Unlike securities, real estate is a hard asset with an enduring intrinsic value. There are huge tax benefits accruing from owning real property, either as\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":821,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/821\/the-s-p-is-up-over-16-in-2006\/","url_meta":{"origin":2198,"position":1},"title":"The S & P Is Up Over 16% In 2006!","author":"Jeff Brown","date":"December 31, 2006","format":false,"excerpt":"Over the last half century or so the S & P has averaged, give or take, about 8% growth annually. Pretty impressive. A lot of folks are very impressed, especially those who've invested into vehicles tied to the S & P index. They did better than ok this year, don't\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7491,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/7491\/after-the-great-recession-what-will-real-estate-be-like\/","url_meta":{"origin":2198,"position":2},"title":"After the Great Recession: What Will Real Estate Be Like","author":"Glenn Kelman","date":"March 16, 2009","format":false,"excerpt":"Over at Redfin, we've been wondering plenty what the world will look like after the Great Recession. It feels as though we're falling and falling, like Alice in Wonderland, with no idea what strange new world awaits us at the bottom of this very deep downturn. What will the Internet\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1972,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1972\/looking-for-a-bargain-priced-home-if-you-dont-flinch-the-seller-will\/","url_meta":{"origin":2198,"position":3},"title":"Looking for a bargain-priced home? If you don’t Flinch!, the seller will","author":"Greg Swann","date":"September 28, 2007","format":false,"excerpt":"This is my column this week from the Arizona Republic (permanent link): \u00a0Looking for a bargain-priced home? If you don't Flinch!, the seller will Let's talk a little bit about buying strategies. Last week's rate adjustments by the Federal Reserve Bank may have scared up a few buyers. I'm taking\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10766,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10766\/are-the-uninformed-chatterboxes-in-your-area-insisting-that-the-real-estate-market-has-recovered-you-may-want-to-defer-the-celebration-even-so-this-could-be-the-golden-moment-for-investors-in-phoen\/","url_meta":{"origin":2198,"position":4},"title":"Are the uninformed chatterboxes in your area insisting that the real estate market has recovered? You may want to defer the celebration. Even so, this could be the golden moment for investors in Phoenix.","author":"Greg Swann","date":"January 5, 2010","format":false,"excerpt":"I've known for six months or more that there was a sweet spot on the horizon for investors and other highly-solvent buyers. That event was delayed by the first-time home-buyer's tax credit. Today's news about declines in the number of pending purchase contracts is a symptom of the market returning\u2026","rel":"","context":"In "Flourishing"","block_context":{"text":"Flourishing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/flourishing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2793,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2793\/your-rental-home-in-phoenix-will-generate-positive-cash-flow-but-will-it-appreciate-significantly-in-the-coming-years\/","url_meta":{"origin":2198,"position":5},"title":"Your rental home in Phoenix will generate positive cash flow — but will it appreciate significantly in the coming years?","author":"Greg Swann","date":"March 18, 2008","format":false,"excerpt":"This is my column for this week from the Arizona Republic (permanent link): \u00a0Your rental home in Phoenix will generate positive cash flow -- but will it appreciate significantly in the coming years? It's still a buyer's market out there, but is it an investor's market? 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