Malibu Ransom: Half a million for a buyer

This one comes out of left field: A $10.5 million listing in Malibu with a 7.5% commission, including 5% for the buyer's agent. From Michael Gardner's Malibu Real Estate blog:

"Most agents go into a listing appointment hoping for a 6% commission but will often get the contract signed at 5%. In areas like Malibu and other expensive communities, it’s not unusual for the commission to be 4% on homes that are $6,000,000 or more. This home on Broad Beach (pictured) not only offers an exclusive address right on the sand but a whopping 7.5% commission with the buyer’s agent receiving 5%! If the house closes at the asking price the agent who brings the buyer will walk away with close to $250,000 AFTER the split (based on a 50/50 split) with their brokerage! This is one motivated seller!"

You can see the house here.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: Michael Gardner

Comments

[Calc]

The MLS is about marketing to other agents who then market to their buyers/sellers. A large commission ensures that every agent with a buyer in the Malibu will bring their buyers by for a look see.

A buyer should always ask their agent on every listing what the selling agent commission is so they know two things, 1- How desperate the sellers are and 2- If your agent might have other motivations for showing you the property. 2.5% is average for selling agents (the person representing the buyer) on most regular listings, on new homes you can see between 3-6% nowadays.

A buyer should also ask for the CDOM history on a listing from their agent and get the public records printout for a house. This will give you a complete picture of what is going on for a particular house. Then do the same thing for nearby listings and closed sales and see what it took for sellers to get sold. If you are going to buy in a declining market at least try to lessen the mistake and making an informed purchase.

If looking at a short sale find out who is servicing the note and if a short sale package is already submitted and approved. Both pieces of information should change your bidding strategy. An approved short sale package will be responded to much more quickly than an unprepared seller. Some servicers are much faster than others in responding to such requests as well.

[E]

Why do Realtards hide the address in their listings?

Is it so we can't Zillow it to see what they paid?

Why isn't the last sales price in the Redfin listing?

Zillow has it.

The address is 31310 Broad Beach Rd. 90265

The owner is Mel Gibson.

[TakeFive]

Talk about fishing with the wrong bait.

That incentive is structured to attract an agent. Perhaps lowering the price would attract a BUYER.

[PotsNPans]

about the bidding strategy with short sales --the price really does not matter (this is why you see so many with low prices --they intice you to call the agent and maybe he/she can sell you something else). Submit an offer--the bank will repsond with a price they are willing to accept. If they even respond. Another important piece of info is how many loans are on the property and who owns the loans, if they are different banks kiss your chances goodbye.

Stay away from short sales except to look at them before they become "bank owned."

[Cal]

PotsNPans,

I agree and disagree on short sales.. you see so many low prices on short sales because they are trying to entice an offer. These are dumb agents going about short sales the wrong way and it has a lowered probability of success. For the ones that go through and get a short sale package approved the response times are much quicker, the other route the buyer has to go through the process with the seller and all the negotiations have to be done.

If an agent is telling you "don't bid on short sales you are wasting your time" as a blanket statement, that is an uninformed agent. I think some of the best "deals" (deals relative to the current market) I've seen closing lately were short sales. I've seen short sales close in under 2 weeks from contingent to close (it was all cash so that took financing out of the equation). It all depends on the listing agents competence and who is servicing the note as to the buying experience.

If you simply "must" buy now, take a gander at short sales and learn what is working and what isn't. I think they are offering the best deals because agents and buyers are shunning them and swarming after the foreclosures.

I also think significant changes are coming to the short sale arena because of some decisions by MI companies and the new HOPE NOW language. The lenders know they are going to get the homes and they know the market is declining (therefore the sooner they sell the less money they lose) so the short sales are going to become a bigger part of the market.

[sfvrealestate]

Right now, in L.A., it can take Countrywide over 12 weeks to approve a short sale. They're just overwhelmed. So, if you're a buyer, patience is an important strategical component. Make sure your agent asks the listing agent how far along the property is in the approval process. BTW, Cal, the seller still has to accept the offer regardless of whether or not the short sale has been approved.

[Cal]

sfvrealestate:"BTW, Cal, the seller still has to accept the offer regardless of whether or not the short sale has been approved."

Once they are in the realm of losing the banks money instead of their own do you think they will say no?

Yeah, didn't think so.

[Cal]

Any agent telling a buyer to not waste time on short sales is saying "I don't know how to tell the difference between a good find and a time waster and I am not going to do the work to try". Ditch 'em.

[E]

Why are you guys talking about short-sales on this house?

Mel owns plenty of property (including the house next door) much of which I'm sure was bought early-bubble or with bubble proceeds.

Last time I checked he was still pretty popular too and probably making dumpsters of money.

Sorry Uber-Bears...you're not gonna be getting in this place for pennies on the dollar.

[MyLessThanPrimeBeef]

How about if we sacrifice this house for the redemption of all other houses?

You know, give it away for nothing so others may be saved, so the gods of real estate may be appeased. That would be good news worthy of spreading.

Is that too much of a miracle to expect? What if this is the only way to resurrect the housing market?