Real estate is an ever evolving industry where there is always something new to think about.
Here's a listing that was offered for sale the usual way for just over a month, with the original price right at market, or so the agent thought. There was no interest until the price was reduced $50K. At the new price, however, the homeowner is in a severe financial predicament in that she cannot cover the costs of selling and pay off her mortgage.
Seller applied to have the property sold as a short sale. But before the property was approved as a short sale, she received an offer for $90K less than what she paid for the house, and below the list price.
If she accepts the offer, she wants to make it subject to the short sale which hasn't been approved yet. At the same time, the listing agent wants to revise the listing agreement to show a higher commission rate since before the short sale scenario came about, the listing agent agreed to a greatly reduced commission rate to help out the client who was waging an uphill financial battle. If it is sold as a short sale, the bank would pay the commissions (or negotiate the rate --- so why negotiate at the very low end?). And we all know the work involved in a short sale....it's a lengthy, time-consuming, nerve-wracking process.
How would you address this situation?
I would redo the front page of the listing agreement changing the commission. The fee is more than fair for the amount of work involved. We raised all our fees on short sales because the lender is going to discount it by 1 point from wherever you have it. We put a higher fee and then the lender gets it down to what we our regular fee is. I can not discuss specific amounts here on AR.
Here in Florida, we are a deed state, unlike CA which is a trust deed state. Here we have to have an offer first before the short sale is even looked at. No BPO, no package, nada, until short sale offer is signed by seller. Here we have a board approved short sale addendum that is added to all our listing agreements in short sale and must accompany all offers. Katerina