Are you the buyer of a Short Sale or REO property? Although Fannie Mae and Freddie Mac have done their best to set a precedent, there are still companies that cut Realtor commissions as a standard practice.
What does this mean to you? If you are dealing with a professional Realtor, you may not even know or notice.
Why am I writing this, you ask? Because I believe that buyers who have been given a high level of service and appreciate their Realtor should know that the Realtor is being shorted by Lenders and / or short sale negotiators.
When you get your preliminary HUD statement, review what is usually page two, section "L". Take a look at line 701 or 702 and see what your agents' company commission is. Is there a deduction for a third party? When reviewing commission, keep in mind, that is not the amount your Realtor will receive. Most Real Estate Brokerages take a fee of 6 to 8 percent for the National company and 20 to 40 percent for the local brokerage.
To give an example, with a purchase price of $160K, a 3% commission would be $4,800. with $384. going to corporate, $1104. to the Local Brokerage, leaving a commission to the Agent of $3,312. From that amount they have to pay for their gas, car, taxes, education etc.
I am currently working a deal with that same $160K purchase price where .75% of the 3% commission is going to a third party, 8% to National and 20% to my Broker. Out of the $4800 commission, I will get $2649.60. Bummer! That $662.40 can pay my car payment and electric bill for a month!
Keep in mind, Mr & Mrs Buyer, you can be the champion! Kick in something to bring YOUR special agent close to or at 3% commission. Simply tell the Title Company what you would like to contribute. They will make the proper adjustments to the HUD statement.
The Realtor does not have any control over the thieves taking money out of their pocket. Unlike some, I don't believe that short sale negotiators or banks should have the right to reduce commissions that your Realtor has earned.
This is especially true when a property is shown to you as a standard sale and some how morphs into a short sale. When your agent showed it, it was with the belief that the commission was 3 percent. Now comes a short sale and commission can get cut to 2.5% or worse (sometimes MUCH worse).
The other unfair thing are these so called short sale negotiators. If the Seller wants to hire a short sale negotiator, or the listing agent wants to send business to a short sale negotiator, great. They hired them, they should pay for them.
It is unfair for a Realtor who works hard for their buyer, does all the additional work that is required during a short sale and then gets hit in the pocketbook.
YOU Mr & Mrs Buyer, can hit back on their behalf. You can sign an agreement with your agent stating that you will make up the difference should you purchase a short sale, REO or any property that does not pay 3%.
Imagine your Agents diligence in finding you the perfect property if, NO MATTER WHAT, they knew their commission was secure!
Now, I am not taking about agents that do the bare minimum, and I am not talking about agents that treat you like you were a number.
I am talking about the agent that would rather walk through fire than sell you the wrong property. I am talking about the agent that has maintained contact with you and has shown you every property you wanted to see. I am talking about the Realtor who CARES.
Be the champion! Care about your Realtor!
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