The File Nobody Sends You an Invoice For

Everyone loves to talk about the Broker commission. Big number, easy target, feels good to say out loud.

“These guys make too much money to only open doors.”

Nobody talks about the file that’s costing us money right now, today, with no guarantee we’ll ever close and recoup the upfront costs.

Here’s the deal. Names and location changed, numbers are real.

Two years ago I sold a client, call him Mark, a house for $455,000. Good shape, good price, all the money he had in the world went into that down payment.

He was living the dream of home ownership on a mortgage that was doable, but just doable. .

Then his father died. His brother, who has special needs, needed him back home immediately. Mark relocated a couple months ago to take care of him. His income didn’t move with him. June’s mortgage payment got missed. So did July’s.

I didn’t find out about the arrears until we were already listed. Mark was embarrassed to tell me.

So here we have full price offer, $9,200 in seller concessions, a buyer who was stretching just as hard as Mark was, financing his own down payment by selling his mobile home to a wholesaler. Two people with no cushion, tied together by one closing date.

If we thread this needle, Mark gets out without bringing money to the closing.

Then I get the actual payoff number from the bank. Mark is short. Not a little short, short enough that without help he doesn’t walk away clean, and he doesn’t have any money to bring to a closing table that already has none to spare.

So, I agree to eat it. Over a couple thousand dollars, out of my own pocket, against what I’m owed if this closes. I’m already out of pocket over 1400 dollars (cash money) in cleanup and lawn work just to get the house market ready, plus my time.

I’m giving up professional fee to cover the gap between what the bank needs and what Mark has, because the alternative is a person losing his house on top of everything else he just lost.

Unfortunately, the buyer then loses his job halfway through escrow. Eight days ago as I write this.

The lender says we can still close, but only with a new job offer letter and full underwriting inside a two week window, or the numbers start moving in the wrong direction.

Did I also mention we just got a structural quote on the garage, built in 1955, for $26,000? Seller can’t fix it, buyer says he’ll absorb after closing, because none of us can afford to fix it before.

Right now, I’m somewhere around $3600 US out of pocket, some cash, some payables. To fund a deal that I don’t know if it’ll close.

I don’t know when the bank moves against Mark if it doesn’t close. We are absolutely on the clock. I don’t know when the penalties start compounding faster than they already are.

I’m not writing this because it has a tidy ending. It doesn’t have an ending yet. That’s the point.

The ‘these guys get too much money to just open doors’ conversation only ever happens in front of the deal that goes smoothly.

Or on Facebook or IG. Nobody’s counting my money against the deal that’s currently bleeding, because that file never reaches a FB or IG, let alone anyone else’s inbox.

The fee isn’t priced for the transaction that works. It’s priced so I can afford to provide you the service that gives you the best chance of ringing the register.

It’s priced how it’s priced so I can run a viable business and get you what you need to take care of your family.

The fee is priced to cover what it costs to run a business, and cover all the stuff it takes to be a professional agent.

It’s priced for this deal, the one where somebody has to absorb the marginal risk so two families don’t lose everything over a missed payment and a bad month.

I’ll tell you how it ends when I know.

I tell you this as someone who looks at life through the prism of risk and reward as a bond trader will.

I don’t go into a situation with my eyes closed.

I take on a client and act as a fiduciary to get you to where you need to be.

Sometimes its not pretty, and sometimes it doesn’t work out for anyone.

As always, unsubscribes are fine. and opinions are welcome.

But I thought you might appreciate a little honesty about what a tough deal looks like.

Peace