My buyer wants the fee disclosure clause out, so now I'm rethinking the close

Question from the cheap seats. If the seller agreed to 132 and got 132, what is he renegotiating? Is the argument that he'd feel cheated, or that he has an actual right to something?

@anchor it's feelings, mostly. He signed at 132 and 132 is what he gets. But sellers do walk when they feel played, and a walk at day 12 costs everybody. That's why the buyer wants it invisible.

Still, a seller who sees the number and stays is a seller who won't call you three months later saying he didn't understand the deal. I've come around to preferring the awkward conversation.

9k on a 132k purchase is close to 7 percent. That's the number the seller reacts to, not the dollars.

In the small rural stuff I look at, a 9k fee on a 132 purchase would absolutely blow up at the closing table. Everybody knows everybody and the seller's cousin works at the title office. Different in a metro.

Set the threshold by math, not by feel. Double closing costs you roughly X in points plus Y in fixed fees. Solve for the fee level where paying X plus Y is cheaper than the probability of a blown deal times your spread. If a double close costs you 3,800 all in and you think disclosure kills one deal in six at a 9k average, disclosure costs you 1,500 in expectation. Disclose.

At 25k the arithmetic flips, which is the opposite of what you said in your post. Go check it.

@ledger the one in six is invented though. Warrant has no data on how often disclosure kills a deal because he hasn't closed one yet.

@wren right, and that's the actual answer for a first deal. Disclose, close it, and find out what your real kill rate is. Buy the information with the first three deals rather than guessing at the structure now.

What does the buyer do if you say no? Four to six a year and he found you, so presumably he has some incentive to stay. Have you tested that at all?

The thing that would decide it for me is which transaction the fee sits inside. If you disclose and the seller renegotiates, you're negotiating against your own contract with a signed price. Legally you're usually fine holding him to it, though whether specific performance is realistic depends on your state and on how much you want to sue a homeowner, which is never.

So the real exposure isn't the clause. It's that a distressed seller who feels burned has a lot of ways to make the closing slip past your inspection window and leave you choosing between canceling and pushing.

Separately, on transactional funding, some lenders in that space want the end buyer's funds confirmed before they'll wire the first leg. If your buyer is genuinely all cash with proof, fine. If he's borrowing, ask early, because the timing between the two legs is where these break.

I'd keep the clause and tell the buyer why, in writing. If he leaves over it you've learned something about him for the price of a deal you haven't found yet.