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19 Comments on The latest tactic I'm running into from lenders trying to cut my commission
That is a new one I have never heard of. Pretty simple....I would just say my agreement is not with you and I can not not breach my fiduciary responsibility with my client. Thus, this discussion has come to an end. So, what needs to be done to make this deal work?
You should check if the loan is Fannie Mae or Freddie Mac...they aren't allowed to negotiate the commission if its 6% if the loans are either Fannie Mae or Freddie Mac.
@Tim, I did get Homeq to reconsider because I have time on my side with that one. Chase says they've been that way from the beginning.
@Neal, that's one of the first things I did. I'm also having our broker place a call to the local department of finance to have them weigh in on it.
Ultimately I'll do what has to be done for the seller, but I can't say the same for the buyer's agents.
This certainly seems to have something illegal, and unethical, written all over it. The Offer to Purchase contract is between the buyer and seller. The buyer agreement and listing agreement are between the agents (agency) and their clients. No where is there anything written affecting the commission between the LENDER and the agents. Can't see how they can even ask about this.
And why would they ask about it? Do they want to lower the price of the home?
Thanks for the support Linda, it's unfortunately just the nature of the beast. They get away with it because they're holding seller's and their agent hostage.
Your post doesn't indicate that these are short sale contracts. If they are not, I can't see where the financing bank has any interest in the commissions.
However, if they are short sales, Chase is a bank that services a huge percentage of their borrowers. It's been one of their attractions over the years. So, they made the loan, they service the loan.
The question is, have they sold the paper to Fannie?? If so, Fannie guidelines says that if the commission is 6% or less, the bank can't negotiate the listing commission.
There's more to this than I can figure.
Whatever they're doing, it stinks.
Sorry Lenn, in my haste I forgot to clarify that these are short sales. No the loan is not owned by Freddie or Fannie.
They try to cut corners or save a buck any way they can.
I was glad to hear Fannie and Freddie stepping in.
Why is it that everyone is always trying to get in our wallets and take away our commission? Sheesh!
Stand your ground and say NO. Many times I believe that these negotiators will try and they will lie to you. Tell them your policy is 6% and stand firm. If as a last resort, this does not work, don't be afraid to ask the seller to make up the difference.
Brian, I'm with Jeff! Let them know this is unacceptable!
Two agents, Same office = 4%
Hi Brian,
I never heard of this one before. I hope you get ALL your money.
Makes you want to make a deal with an agent friend from another office.
I have been doing short sales for over 3 years and this has always been the case regardless of lender. What I do is have a broker friend represent my buyer and I give him a small cut and he 1099's me the rest as I hold a broker's license.
You are right. These commission demands from lenders are unbelievable. I avoid most short sale situations for this reason.
I'm confused - the lenders can control your comissions? Or are they just suggestions ~ Demands.........can they?
@Amiri - I've usually pay someone a refferral fee to handle one side when I'm representing both.
@Tom - I wish I had that luxury. They're such a huge part of our market you can't avoid them anymore.
@Liz - They refuse to approve unless your HUD matches their numbers which includes the reduction in comissions. They hold the file hostage if you don't agree to the reduced amount.
Brian - I had a agent work this with another agent in a different office, they pared up and a the selling agent referred the deal to another agent for a referral fee. It was way better for them than a pay cut! Not fair ... not right! What is these days?
Bank of America here has the exact same breakdown. I don't understand it, and I know BofA has alienated a lot of Realtors here that I work with because of their stupidity.