After we settled into the house, life’s problems got in our way. My husband and I were not getting along and seemingly growing apart. Unfortunately, real estate was put on hold as life began to happen. Instead of getting into a drawn out story on how my marriage fell apart, let’s just say we separated. He moved out of the house in November of 2004. I continued to live in the property for awhile. Once the decision was made to get a divorce, we decided to sell the house. Throughout that year, I really didn’t think about real estate investing. It almost became a forgotten dream.

We decided to put a “for sale by owner” sign out to see what would happen. This was in the middle of the marketing boom so we figured it would sell quickly. A couple of Keller Williams Realty agents stopped by to tell me about a program they have for owners who want to sell their home without agents. After thinking about it for a few days and discussing with my soon to be ex, we decided to work with them. The program seemed beneficial and our main goal was to get rid of the property. Also we were not generating a lot of leads by having the sign out on the yard for a month or so. The program the Keller Williams agents presented to me would help you sell your home without paying the commission. They said it was a program they offered to generate company awareness in the community and to get referrals. Agents outside Keller Williams could not bring a buyer and the house did not go on the MLS. Under this no commission program, they advertised the house in the real estate magazines, flyers and throughout their Keller Williams offices. They also put a sign in the yard and held open houses.

In my opinion, they used this program to get connected with you so they can convince you to do the full listing. I’m not mad at their tactics, as long as the net to homeowners is what they want or need from the sale of the home. In any case, that is exactly what happened in our situation. They increased the sales price a little and lowered the commission from the usual 6% and “Wa-La”, we have a full listing where both parties are happy; The seller and the agent. They already had buyers lined up from other agents and the only way they would connect us with the agents’ buyers was to do the full listing. The house sold approximately 30 days after agreeing to list it on the MLS. We sold the house for $250,000.

Based on my previous post, The Fix Up, here is an analysis of the first house I bought.

Purchase Price: $180,000
Repairs: $10,150
Realtor’s Commission (4%): $10,000

Sold Price: $250,000
Net Profit: $49,850

Not bad for the first home I ever bought.

Note: When calculating expenses on rehabs, you should always include the mortgage payments and any holding costs (utilities, sewer, water expense, etc). But, since we actually lived in the home, it was our living expense and not credited to the rehab.