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Commissions. . Short Sales UGLY COUSIN !

Another Short Sale Closed . . .

There was not anything short about this one. All short sales have their own personalty .The time required to bring them to the closing table is longer when the agent in the other side has decided that his/her best interests are above their clients.

This is about the commissions

Our local board the MRIS does not allow us to post a variable commission when we are listing a short sale.
I understand that we can not have "variable: commissions all over the place and commissions should be set by the listing broker accordingly to their listing agreement.
But
In short sales this does not work!
I wish there was a box to check when putting a short sale listing that says. .This commission could be reduced by the bank during third party negotiations. .in the event of. . .listing and Buyers brokers to split commission 50-50

How simple is that?

We all know that commissions are set in stone when it comes to conventional selling but. .when it comes to short sales, all the rules are broken
exposing the listing broker.. .

I called GCAAR our local governing body for Realtors to get some input about commissions.
They acknowledge they there is a problem and their arbitration department is getting clogged with dissatisfied buyers brokers unhappy of their commissions.

Coming with a sensible solution as simply as a check box maybe just too simple to be incorporated. . meanwhile brokers, agents and the whole public suffers because of their inability to fix a problem

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Posted by Fernando Herboso Real Estate Maryland, DC and Virginia on 05/08/2009 05:28 AM

Comments (59)

Short Sales in the Home Selling Channel

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59 Comments on Commissions. . Short Sales UGLY COUSIN !

MAY

Still havent seen short sales arriving in my marketplace. Certainly hope that we never do as they sound like a total nightmare for those of you who have to deal with them.

You wrote:

We all know that commissions are set in stone when it comes to conventional selling but. .when it comes to short sales, all the rules are broken
exposing the listing broker.. .

Actually, the rules are not broken. The listing brokers and the bank are not following the rules.

If the listing agent/broker is going to TAKE SHORT SALE LISTINGS, offer a co-op to incent buyer brokers/agents to show and sell, the buyer broker/agent has every right to believe that the co-op offered is what they will receive at closing.

If, on the other hand, the listing agent/broker is going to negotiate a lower sales commission with the seller's lender, that doesn't change the co-op.

The co-op is a % of the sale price. THERE IS NOT 50/50 RULE.

It is the listing agent/broker negotiating with the seller's lender. They are negotiating for themselves and the buyer's broker is not a party to the bank's arbitrary edicts.

The misconception in these scenarios are:

There is a 50/50 rule (except, of course, when the listing agent offers 45% and keeps 55%).

Buyer's Agents do not work for hand-outs.

Either honor the co-op or DON'T NEGOTIATE AWAY YOUR COMMISSION.

Or, don't represent home sellers in Short Sales.

FANNIE MAE recognized this problem in their ruling that lenders cannot manipulate their net through a reduction of the real estate commission.

BTW. I had no control over the font in my previous comment. I copied and pasted the quote and the system completely took over.

Fernando, It is a problem and the worst shame of all is that the controlling authorities have not addressed the situation, even though they've known about it for quite some time. BTW, I don't necessarily agree that the answer should be X% or 50/50. Rich

I have seen listing agents mention that fees will be split 50-50 based on what they receive. The buyer agent will then know in advance not to expect a fixed amount .

Lenn,

From where did the quote you copy/pasted come? Could you provide a link (assuming it is from FANNIE MAE or some other 'authoritative voice'? LOL

Our area MLS does provide for language allowing for a change in commission co-op in the event the lender insists on a lower commission HOWEVER the recent FANNIE MAE statement will hopefully put an end to this very unfair practice by lenders. We all work much harder and longer hours on short-sales for which we should be well compensated.

Commission are an agreement between brokers and have nothing to do with individual agents. If you offer 3% as a co-op commission in the MLS the language placed in the comments that say commission to be split 50/50 if reduced is not acceptable. MRIS and the various associations have clearly said so in numerous articles and yet agents keep putting it in the remarks.

I have been hit at the closing table on two different occassions by listing agents who want me to reduce my commission to finanalize a deal. My answer is NO what was offered in the MLS is the contract. If you reduce the overall commission to get the lenders net then the % difference comes out of your side of the transaction not mine.

If you think the commission is an issue then offer a lower split to begin with and if the lender doesn't cut it then give the buyers agent a surprise with a higher commission instead of the other way around.

Fernando...

I'm with Lenn on this one. The banks are not playing by the rules. They don't understand that once a commission has been offered, a contract is in place that they should not violate.

I think that if every listing agent held the line, the problem would not exist, but I don't want my commission to be a crap-shoot.

The whole thing seems like a "power grab" by the lenders. They want to dictate our earnings when all they should really be concerned with is the net they require on the sale. If the buyer's offer doesn't net them the amount they require then all they have to do is counter the offer with an amount that will WHILE still honoring the listing agreement.

That amount, in our experience, is usually only 1% or less of the sales price... so on a $200,000 sale we are only talking about $2000. If the offer is $2000 lower than the lender can/will accept all they need to do is counter at $2000 higher and the deal is done.

Why penalize the agents who have worked hard and long hours to help everyone involved?

This is a slippery slope.

If the banks succeed with the listing agent/brokers falling in line to reduce our commission by fiat, it will be far too easy for Seller, listing agents/broker, buyers, etc. to condition their contracts on a reduction of real estate commissions in exchange for their cooperation.

That's in my opinion, is extortion.

I will NOT let a buyer, seller, bank, listing agent or any entity dictate my fee. I'm in business and have a right to set my own fees. I see a co-op, I agree to work for that co-op and I expect that co-op at settlement.

I do not work for hand-outs.

I am 100 percent with Lennon this. But I willl point out that in my mls the term varialbe rate of commission relates to the commision the listing agent takes. I.E. if the seller pays less commission if the listing agent is both sides of a transaction then that is a variable rate of commission

This is a new world and the conventional business is all but gone for now. If the listing agent has to take the hit on the commission so should the co-op agent. Remember, every short sale sold is one lest foreclosure later.

Mike Sher,

(248) 548-9100 x127

CDPE (Certified Distress Property Expert)

MCAR, Short Sale Trainer

Max Brook and Real Estate One Short Sale Specialist.

The Mike Realtor Team Blog - Metro Detroit/Oakland County

Servicing in Southeast Oakland County, Birmingham, Bloomfield, Berkley, Beverly Hills, Clawson, Ferndale, Huntington Woods, Pleasant Ridge, Royal Oak, Rochester, Troy, etc.

Fernando, how simple is this; you put in your MLS a 2.5% or 2% split in anticipation of the lending institution making this adjustment on commission. O' that's right you will not get as many showings on your listing if you do that but putting the commission in at what is the norm you do get the showings. Why do you believe the selling agent should split the cost of your business decision? Give it up and take the hickey or do not list them.

"The time required to bring them to the closing table is longer when the agent in the other side has decided that his/her best interests are above their clients."

Fernando, it sounds like you are the other side and placing your interests above your clients when you make the commission to the selling agent a bone of contention .

Lenn has said it perfectly and perhaps the large font wasn't such a bad idea! Listing agents have been negotiating away the commissions even before the short sales. This is just more pronounced with the short sales. It is unfortuate for the sellers and the buyers. When agents/sellers offer reduced commissions, buyers simply move to those properties where agents/lenders have not done so...

It seems like the banks are setting their own rules. I just closed a deal. It took an extra week to close. Why? Great post

What a mess. Just as I have said before I do not work with short sales ever. Life is too short. If this was all my market had to offer I would pack up and find another one.

Fernando - It appears as if as a collective group of agents (Listing and Buyers) we should stand firm and demand that our commission structures are non-negotiable. A Buyer agent who brought a ready willing and able buyer to the only available property in the MRIS system that suits their clients needs should never be compensateded for less than they expected.

I don't know who's "bright" idea it was in our area to start preaching the "50/50 split of whatever the bank feels like paying" mantra. But I for one am NOT drinking the Kool-AID.

We have a responsibility to our clients and our industry to stand firm , we DO NOT have to become collateral damage for their folly.

Why should the Buyers Agent take the hit on the commission? The so called 50/50 rule is only justification for the Listing Agent to save their side of the fee. If you aren't going to live up to the co-op fee, then don't list Short Sales.

Let me bring you all back to the real world. . . my post was an attempt for a SOLUTION not a way to vent your frustrations . . the sames one I have.

Yes, Lenn the banks should honor a system already in place and they are the bad guys for messing it up for us. . but the fact remains that they are above the Realtor's Association power to change this for us. The leadership they are providing on this matter in non-existent and we have to suck it up.

As far why list short sales?

Because I'm morally obligated to help families. .the same ones that made me thousands of dollars a few years back are calling back now. I can't turn my back to them, I have to help them.

If I'm a buyer agent for a short sale and it requires a little flexibility from my end,. .I will give. . after all, I'm working for my clients best interests FIRST!

As a listing agent , I had banks tried to lower commisssions below the unaceptable and I was able to bring them back to reality.

If you are a buyers agent. . why should I the listing agent be forced to take the hit and YOU DON'T?

After all, I'm the one putting this transaction all together. . and you the buyers agent only job is to call me every week and ask me . ."How is the short sale going buddy ?" and pick up your check at the end.

HOW FAIR IS THAT?

"the same ones that made me thousands of dollars a few years back" This sums it up why you should take the hit and not the selling agent.

Fernando, 95% of my business right now is listing and selling short sales. I offer a fair co-broke in the MLS and I do NOT change it. REALTORS(R) who show and sell my listings are guaranteed their co-broke. It's the only fair way to handle my business.

Rarely has the lender altered my commission. As Lenn poin ted out of it is a Fannie Mae loan the commission will be 6%. This is probably 50% or more of the short sales. Most of the other lenders are following suit.

I have had lenders try to reduce the commission and I said "No". They said 'OK". it was no big deal.

Also, before a short sale listing goes into the MLS you should have already called and asked them the question about commissions. Most companies will tell you right up front what their "guidelines" are.

I am STRONGLY against changing co-brokes. it's not fair to the selling agent and it's bad business. If I have to take a hit on my side then so be it. It's why I charge an upfront fee.

This is not a Lender issue it's a REALTOR(R) issue.

Hi Fernando, We have pretty much the exact wording you mentioned in our contracts. It clarifies the risks but does not address the underlying problems associated with short sale commissions.

Bryant,

Tell us about your up front fee and how you present it to the seller. I've been batting that idea around for awhile myself but haven't implemented it as yet.

Tim

Fernando, to imply the buyers agent sits around and does nothing but call you once a week while you are negotiating a short sale is a little short sighted. The last short sale where I represented the buyer, I had to deal with more than one phone call a week, The buyers are constantly calling, getting frustrated (no matter how you tell them it could take months and they need patience) and often want to walk away before approval. It takes work on both sides to keep the transaction together. Yes, the listing agent has to deal with the bank, but when you listed the property, you accepted that as part of your duties as listing agent. I have also been listing agent on a number of short sales, yes, it is a lot of work, but it is part of the business.

This shouldn't be us against us, friends. I think we should all be working TOGETHER to get the transactions completed and in our Jacksonville market that has meant both sides taking the 'hit' on commissions at times. Fortunately we haven't encountered any resistence since most of us work both sides... very few agents in our market work exclusively with just buyers or just sellers.

If I could add another problem to short sales, on the listor side, it is get your estimated HUD right, and pad it. The banks are also taking out of the listing side commission any short fall that is different from the original estimate and the final numbers. Short sales on either side are not for the faint at heart. I will say that we see an easing on the part of banks about commissions. We have also found that in some cases we have been able to get transaction fees through.

I list my short sales with a little lower BB commission split. Of course that might kill some agents motivation to show.

This varies state to state as to how it can be reflected in the MLS systems.

Our MLS requires us to put in the 50/50 language for ALL short sales. Because, we do still see the banks lowering the commission on some short sales.

Would you rather take a lower commission, or have the bank say no to the deal and be back at square one? Especially for the listing agent who will lose the deal when it becomes an REO. The buyer agent can try to buy it again as an REO, but the listing agent is long gone.

Take whatever commission is offered (as long as it's at least 1.5% +) and close the deal and move on. Would I hate to accept that low of a commission? Hell yes. But do I want to start showing homes all over again and writing 20 offers all over again, not really.

I think people sometimes forget that the bank "ownes" the house and can really choose to do what they want with it. Sell it, not sell it, do nothing, or sell for 6%, 5% or 1% or whatever. It's their money, their house etc.

The housing market is different now. The days when anyone could get financing for a home are a distant memory. People who unknowingly over extended themselves now need our help. This creates a tremendous opportunity and responsibility for all of us who understand the "in's and out's" of the short sale process and are willing to understand that the way you do business changes every day. .

. .and the way you do business in a short sale is by collaboration between BOTH BROKERS to get the bank's approval. You may choose to close your eyes while this SHORT SALE NIGHTMARE IS OVER. . . . but we are not even half way finish yet.

Just understand this: REAL ESTATE is not the SAME ANYMORE. . and it will never come back to what was once before.

I don't think the co-op should be changed. And here in Phoenix whatever the co-op offered is what is due the agent. I'm with BB....just say NO to a redution in commission. Many agents are doing just that and they are closing deals.

As long as the selling agent has no control over the competence of the listing agent, there is no reason to accept their lack of competence in the form of a reneged offer of compensation. There are too many agents able to provide the selling side's fee without this nonsense of reductions. If you can't get the full amount from the bank, as many clearly can, that deficiency should come out of your pocket (not YOU specifically, but listing brokers that choose to engage in short sales). Too many inexperienced short sale agents are involved in a process for which they don't have the neccessary negotiating skills, making this dangerous territory for any buyers agent.

One comment above said that his short sale banks "rarely" reduce the commission. I'd love to know what banks he is dealing with. We have some banks that pay 6%, some end up saying 5% or nothing and others are commonly saying they will only pay out 4% if the listing and selling company are the same, even if two different agents are involved! Often, the seller's attorney (Yes, I am in NY, and attorneys handle contracts and closings) is doing the negotiating of the shortage. They get an approval and it is really just a net letter stating that the bank will accept x dollars after backing out the HUD1 expenses. When the letter arrives, then it is realized what commission they were willing to pay. Even though Fannie has stated that the commission up to 6% in a listing contract is NOT to be changed by the bank, I have heard them say TOUGH, take it or they will kill the deal and foreclose instead!

Thank God Fannie Mae has stepped up and said the lender connot reduce our commissions anymore. Now everyone needs to hang together.

After more than two months, I just got word that we will ratify our offer with a reduced commission to yours truly.

This has got to stop, it's 3 times the amount of work and people say were over paid. My ass!

I can't beleive there are no short sales in Cananda like Robert said.

Tap

www.TeamTapper.com

Our MLS rules state the following:

Compensation offered through the MLS to cooperating

brokers on listings which require lender approval (commonly referred to as "short sale" listings) is

for the amount published therein unless the listing broker indicates on the MLS the following: (a.)

the fact that the sale and gross commission are subject to lender approval; and (b.) the amount or

method by which the compensation offered through the MLS will be reduced if the lender reduces

the gross commission.

Theoretically, if that wording is not put in the mls, and the agent puts 3% commission to the selling office, the selling agent could go after the listing agent if they get paid less than that. I don't know anyone that has, but we could!

In our MLS you must identify variable commission situations BEFORE they happen.

I agree with Lenn Harley's enormous font posting. It is the responsibility of the listing agent/broker negotiating the deficiency sale to maintain a 6% commission. The banks pay a 6% commission on the REO side and are prepared to pay it on the short sale side.

I'm primarily a listing agent and I have always provided the cooperative agent with an equal if not greater split of the brokering commission. Why should the selling agent suffer the consequences of my inability to negotiate an appropriate fee?

We need to put the NAR to work (considering all the dues we pay) and make them fight harder to protect our short sale commissions, and our commissions across the board.

Fernado,

I agree with Lenn it is up to the listing agent to maintain the prevailing commission standards. Both listing agent & dellers agent work hard for their $$$!!

MAY

Short sales are a complete nightmare to begin with, but I have also been hit at the closing table with a request (actually closer to a demand) to lower my commission. In our local mls the fact that the listing is a short sale must be stated right up front, theoretically that eliminates some of the surprises that routinely occur with short sales. However, it does nothing to protect a buyer's agent from an attempt at having their commission slashed at the last minute.

I've also been on the other side of a short sale - it's no "prettier" from that side. I've had lenders demand a reduced commission at the last minute. Fortunately I've been able to persuade them this is not the way to go, but every lender is different and some are fairer than others. But we work hard for our money, especially in the current markets many of us find ourselves in...it just is not fair that it's even a remote possibility we should have to cut our commissions.

Really the entire short sale scenario is rife with problems, there seem to be no hard and fast rules to play by and everyone seems to be at the mercy of the lender's whims. What's really hard for me to swallow with this is that many of these properties are now short sales in part because the lenders did not property underwrite their loans in the first place. At least that is the situation in my area.

Since early March Fannie and freddie have not allowed banks to negotiate lower than a 6% commision, FHA is the same. For the last 2 years I have resisted the request to lower my commission and have not lost a SS because of a commission dispute with the bank. THe loss mitigator is trained to ask. They are also trained to ask for a higher price too.

Stick to your guns, the banks need cash now and I now of a major bank that approved a SS in 3 weeks and only asked for a authoruzation to release and a executed contract. Not even a hud-1.

Good luck

Agents in Colorado can refer their SS to me and I will guarantee a 3% commission to them.

Contact me at joe@joeheffley.com or 303+598+3930

Joe Heffley

Real estate agents are amazing. You still think your efforts are worth 6%--as if you really had to work for it. You never had it so good; short sales are dripping from the trees. You can farm out the negotiating for oh, say, 1%, and all you have to do is keep the new buyer content until the short sale is concluded. Yes, Fannie Mae stepped in and said, "No negotiation of real estate agents' commission." BTW, here, for Tim and Susan Fennell, is the "authoritative voice" you seek.

http://tinyurl.com/dcu9ar

No Negotiation of Preforeclosure Sales Commission

Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers

Effective March 1, 2009, closing of preforeclosure sales may not be conditioned upon a reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales price of the property in aggregate. Servicers are reminded that they must continue to obtain any approvals that may be required by interested third parties in connection with preforeclosure sales.

How about this gang?

Say you've started with a list price that would allow the seller a few bucks in their pockets and without showings or very little - you must reduce the price as you know your seller is upside down and unable to continue with payments or upkeep in the home - sellers want to do the right thing and get it closed. Knowing they are going into a short sale and knowing they signed an exclusive right to sell with a 5% or higher commission - and you are the only agent on the transaction - [which by the way, we wait all year to be on both sides to recoup some of the losses from walk aways and prices reduced due to buyer having no money for closings, a loss is a loss in a transaction] Your by contract, entitled to the commission. Where do we send OUR bailout requests?

Even when you get to the closing table and the banks see only one agent, who isn't in a dual agency situation, they say 'Sorry, since you are the only one agent - only 1/2 of the contracted commission will be paid out - uh....no, that's not how the contract reads.

What if I told buyers that they didn't have to honor their contract with the loan they have with the bank - only pay them 1/2 - the banks wouldn't be very happy now would they?

The banks need to play by the rules and stop negotiating our commission.

Is there a general site that shows the rules for ALL banks or are sub-primes not included in banks that have to follow the rules or are there just NO rules? If not, we should start one.

Perhaps this is something that our lobbyist might touch on while pitching our NAR stimulUS to the Congress.

There are short sale companies out there that are doing a 'Double Close and Flip' that are taking more from the banks than our commission, what's ethical about that? When the short sale company controls the BPO and doesn't disclose that there IS a much higher offer on the table - instead convinces the bank that their cash offer can close within 10 days and make sometimes 100K and turn around and give the listing/selling agent - 6 percent - maybe we should consider letting the short sale companies take the business resulting in yet another tsunami for the financial industry waiting for us to bail them out again! aargh.

BTW - Fannie, Freddie and FHA may not negotiate the commission but aren't the sub-primes a major part of this troubled state of affairs? Like....a huge part? They don't subscribe to the same set of rules.

Catherine Coy - Have you ever been a RE Agent? RE agents work very hard, I'm not sure which agents you know that DO NOT, but nothing comes easy. I chose my career because my income can be directly related to the amount of work that I do and I work nearly 24/7 netting a larger than 6 figure salary. As far as I'm concerned, if it's not in a contract or somewhere in writing - I'm not doing it. Again, banks should be greatful that agents are keeping the transactions above board and honest - otherwise the short sale companies that pay you cash to close - are flipping to a much higher offer KNOWINGLY, the banks are not blinking - the short sale company is enriching themselves in the process to a much higher tune than the agents but their key was waiving the cash in front of the bank - fair market value had nothing to do with it.

RE Agents have a responsibility and a duty to conduct sales in a manner consistant with rules while keeping their markets stable. We have a duty to our communities - but Catherine, if we should have no rules - real estate wouldn't be the same. Think about the fall out for a moment. Please.

I forgive you.

Just a point of clarification that many people aren't getting here. The only person really working "harder" because it's a short sale is the listing agent. People are sounding like the short sale causes Everyone more work.

The buyers agent does the exact same work whether it's a short sale or not. Maybe they make an extra phone call or two to the listing agent for status, but since most agents don't seem to answer their phones anymore anyway, it's really not that much "exrra" work for the buyers.

We happen to work on both sides of the short sale process (selling and buying). Most of the listings in our market are shortsales so we're doing a fair share of them from both sides.

I tend to agree with Andrew somewhat. If you are an agent who is dedicated to providing top notch service and working cooperatively with fellow agents then the selling side definitely requires more work and a heck of a lot more time.

That said, when working with buyers we have found that too many of the listing agents do not take time to keep us informed, nor do they take the initiative to stay in contact with the lenders. We recently worked with a buyer for nearly SIX months on a short sale. The buyer really wanted that house and was first in line with his offer. Unfortunately the listing agent never called us to update us on the status, never knew anything when we called him (which was weekly) but always said not to worry because our buyer's offer was the best on the table.

Last week we called for the update as usual and he informs us that the lender accepted another offer - too bad! We asked when he had planned to call us and let us know and he said that he was under no obligation to communicate with us whatsoever. UNBELIEVABLE!

So... we have been out with our buyers almost every evening this week and are going out with them again today. Hopefully we'll find something that is NOT a short sale.

If we all work together in this difficult market we should be able to get through it without too much colateral damage. LOL Yes... we are having to work harder and longer hours than ever before, for less money BUT I AM NOT COMPLAINING.

I LOVE MY PROFESSION and look at each day as a new opportunity.

We have closed over 50 short sales and have rarely seen the lenders attempt to reduce the commission below 5% on any of them. I would estimate that almost 80% of the time the lenders will pay 5% (especially Countrywide) and the other 18% we collect 6%. On all of our listings, the commission is always set at 2.5% and is not variable. That way the buyer's agent knows exactly what they are getting paid regardless or what the lender agrees to. By taking on the short sale, we take the risk of the lender cutting commissions and we are the ones in control of it. If they do pay 6%, then we receive a higher commission for the extra 20 or 30 hours we have into the transaction. Up to this point (knock on wood), everyone has been very happy with this policy.

I looked at some of the replies on here and people have said that we need to "stand strong" with the lenders and need to fight for our commissions. That sounds great in theory, but the reality of it is they have the final word and that does not work. As soon as you negotiate a few, you'll realize that. We also have the responsibility to our client to close these transactions and know that this is an inherent risk of taking a short sale listing. If you don't want to risk it, don't take the listing.

It seems like a lot of people have lost sight of what this really is... This is about helping people that are in a bad situation, not just about fattening our pockets. Do right for people and you'll be rewarded down the road. It amazes me how many people will sit here and say that there is no way that they will reduce their commission, etc... If we had to take 1% on one of the listings we're working, we would do it in a second in order to help that family avoid foreclosure. The reason myself and our team is in this field is to help people and get paid along the way.

I don't have the link right now, but there is a great article about this and the fact that we can actually be held liable and sued buy our clients if a short sale does not go through because we did not agree to the reduced commission as the listing agent.

(All of my references are towards the listing side of the transaction for the most part. I don't feel that the buyer's agent should have to take a large cut in their commissions because they are the ones bring the buyers to us and are selling our properties. We have the choice up front when we take the listing, but as a buyer's agent, there's little choice if your client falls in love with a property. But I do feel that we should all be working together and should be willing to take 2.5% vs 3% if it gets our client into a home.)

Glen

San Diego Short Sale Experts

This is why I have avoided Short Sales. Actually, it is just one of the reasons.

All of our short sales in Vero Beach FL are required to say ' Sales Price & Commission subject to 3rd Party Approval'. Also, if we're worried about it, we have the buyer commit to picking up the difference if the commision is slashed by the bank...

Also, say Hi to Maureen for me...

I was going to site Lenn word for word from her post of a few months ago. Don't let them bully you, you've got THEIR rules standing behind you regarding your commission. This post should be a mandatory lesson on what WE SHOULDN'T BE DOING. Keep their hands off your commision and stay informed here on AR. I know that my broker, etc. didn't know bupkiss about this stuff - I had to tell him and pass along the guidelines.

Find Lenn's previous posts on this AND GET EDUCATED. It's like money in the bank protecting your own commission.

MAY

If the agent lists the commission lower than typical from the start and then states that the bank may lower the commission again, I'm really in a pickle. My client determines which properties they want to see - I don't screen them out by commission offered. Yesterday, my client saw a house we'll br writing an offer on today, listed at 2.25% commission, with the added language about 50/50 reductions. I don't see the logic in setting it so low to begin with, only to let the bank lower it further.

We just put in an offer on an OCWEN serviced shortsale - our experiences with OCWEN have all been pretty negative and this may turn out to be no exception. The listing agent seems to be an excellent agent so we feel very good about working with him even though we are cautious about OCWEN.

OCWEN has already stated, up front, that they will pay no more than 4% commission and no more than 2% buyer's closing costs. Fortunately the listing agent is going to bat for everyone concerned on these stipulations.

What sense does it make to set these limitations? As long as the lender nets what they require what does it matter if they help the buyer out with closing costs over the 2%? In our market it is very common for the buyer to need this assistance... they have the required downpayment but need about 3% CC assistance.

After all the time and work we've already invested, I'm not thrilled with the small commission amount but my major concern it the CC assistance amount. This just doesn't make any sense to me. I see no reason to set arbitrary pre-conditions like this when all that should really matter is the net amount received by the lender.

Perhaps someone can help me understand OCWEN's reasoning in this???

It is obvious this problem will not get solved by the governing bodies. .is up to us THE REALTORS to work together. . is a s simple as that.

I'm amazed at some of these responses, I can't judge some Realtors for feeling that way because their local market maybe different. . but when it comes to service . .on my book. . the CLIENT COMES FIRST BEFORE THE COMMISSIONS !!!

Great topic. Of course I'm on the side of leave my commish alone.

MAY

All the more reason to have a signed buyers agreement

Too bad the banks are not a party to your buyer agency contract. If they say no to your commission then the whole deal will not go through. Just make sure that the negotiator for the SS knows what they are doing, that there isn't over charging for the buyers or sellers part and that the BPO is reasonable .... DO NOT TELL YOUR BUYER THEY WILL GET 50% OFF THE ASKING PRICE. Common sense will prevail.

This commission could be reduced by the bank during third party negotiations ... in the event of ... listing and Buyers brokers to split commission 50-50.

We simply put that in the comment section.

Alvin, I don't get what a buyers agreement has to do with any of this. If the bank lowers the commission, are you going to tell your buyers to make up the difference? Or are you going to make them back out of the deal.

Although the way many of you have responded to the post, I bet many of you would force the buyers to pay the difference.

I think Fernando put it the best, the CLIENT COMES FIRST BEFORE THE COMMISSIONS !!!

What is so hard to understand about the concept that the bank ownes the house and is agreeing to the short sale or not, and can do whatever the heck they want with the house. 6% 5% 0% whatever. IT'S THEIR HOUSE!!!

Sorry for screaming, but I just get so fired up when Realtors act like victims. Hey Realtors, it's all about our clients, not about us!!!!!!!