ClipArt Payday

I will not accept a job without knowing two things

  • The terms of employment and compensation
  • When the compensation will be paid

Although there are exceptions, I suspect most sales agents and brokers had some work experience before entering the real estate business.  It makes no difference if it was hourly wage, salary or commision earnings - you knew the terms of that employment when you were hired

With one specific exception it is really quite the same in the real estate business

  • The listing brokerage has their brokerage fee itemized in the listing ageement
  • The listing broker also details the brokerage fee for the selling firm in the MLS listing

You know up front what the terms are at the time of settlement.  The short sale transaction is an entirely different matter

  • The "third party" will adjust the offered brokerage fee downward - your compensation is anybody's guess
  • The listing firm will offer "X" brokerage fee to the selling firm, but then modify it elsewhere in the listing to 50/50 - your  compensation is anybody's guess
  • The "third party" (not the homeowner) may counter or reject your buyer's offer.  If your buyer walks you don't get paid
  • The "third party" may advise the seller they will be responsible for the shortfall.  If the seller walks you don't get paid
  • The "third party" may foreclose on the home during the short sale approval process - you don't get paid
  • The seller may give up and just declare bankruptcy - you don't get paid

Before I am criticized I will admit I wrote contracts on several short sales - I didn't get paid

If a client indicates they want to look at short sales I spend a good amount of time advising them why they may be shooting at an erratic target.  To date, I've been successful in finding them non-short sale listings to consider.  Those that insist on seeing short sales are referred to an agent who is willing to take the risk of working and not getting paid. There are too many "maybes" and "don'ts" in a short sale transaction.

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22 Comments on You're Hired, But We May Or May Not Pay You

NOV
02

I love reading a great post like this one. thanks for making it RAIN!!!

9:03am • #1
Outside Blog

Karen that is the truth.  I have spun wheels with Short Sales over the summer and I am over it!  last year I was able to get them closed  as quick as 3 weeks but since June it took a turn of long pending deals, not getting paid and failed contracts. In August I told my buyers no more Short sales, there are plenty of other great deals out there due to the market, let's not play the what if game!! 

9:09am • #3
Outside Blog

I agree with you.  I tend to shy away from short sales as number one, they take way too long!  I have lost clients because they didn't believe me.  Additionally, my commission is already up in the air with any client, because things happen, but when it's obvious you might not get paid, why bother?  I don't earn enough quite yet to work pro bono :o).  Good post.

9:10am • #4
1 Featured Post Outside Blog

Karen, I agree.  I have taken lots of courses on short sales and I have yet to do one.  Like you, I try to find them a great deal and counsel them on the pitfalls of short sales.  In Florida, the property probably has no air conditioning so you are buying a big mold problem from the get go.  That's for starters, and as you say the frustration for everyone is not worth it.  Just one woman's opinion! :-)

9:12am • #5
Outside Blog

There is a lot to consider when taking on a short sale. The biggest consideration, in my opinion, is the 3rd party lender. I've done short sales and had approval in two weeks. Every short sale is different.

9:13am • #6
3 Featured Posts Localism Sponsor Outside Blog Hit Router

Karen.....great post.....so far, my team members have been very fortunate and have always received full compensation for their short sale transactions.....short sales are not the major source of income for any of the team members(new construction is our focus).....lucky I guess.

9:17am • #11
Outside Blog

Karen,  I would love to have a cup of coffee with you and look forward to meeting you as well. We'll stay in touch and make it happen.  I usually go in June.   Have a great day! 

10:02am • #13
686,235 Points 72 Featured Posts Localism Sponsor Outside Blog

Karen, since so few short sale offers even reach the point of ratificaiton, the chances of getting paid is even more remote!  I've been able to avoid them so far - easier to do in DC than in Prince William County!  You guys work hard.

10:38am • #15
477,456 Points 1 Featured Post Outside Blog Hit Router

Karen

Some short sale lenders are easier to work with than others; one cannot say that real estate agents don't deserve every penny they work for these days. A lot has changed so much in this Industry.

10:49am • #16
390,963 Points 5 Featured Posts Outside Blog

Tom  That may be true, but you can't only show the easy ones - I don't show any

10:59am • #18
NOV
04
Localism Sponsor

Karen, that is a great post.  I have to agree, I will "just say NO!" to any short sale business.  After ratifying a contract in May 2009 and dealing with Bank of America on a short sale, the Buyer took a walk last week when we were two days from receiving court approval for the sale of an asset that the Seller included in his Bankruptcy filing.  Urrr....all the hours invested for naught!

11:24am • #21

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Kruschka379cropped Ambassador_large

Karen Kruschka - Fairfax Prince William Stafford County VA Real Estate Service

Woodbridge, VA

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Long & Foster America's #1 Privately Owned Real Estate Co.

Address: 5911 Kingstowne Village Parkway Suite 100, Alexandria, VA, 22315

Office Phone: (703) 690-6569

Cell Phone: (703) 819-3363

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