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Is giving up $300 in commission worth it? You bet!

I had a situation early in 2007 where I was doing my first short sale and I was learning on the fly! I have to say, I wish I knew then what I know now! It was a very difficult transaction, but it didn't have to be a short sale, that is what was so interesting about it.

You see, the bank made an error in their calculations. They estimated the amount due at closing to be more than actually was required, so this was going to be a short sale by some $2,500. Since this was a divorce situation and we were two days from auction, the bank was more than willing to take an offer that was only going to cost them $2,500.

So, we show up at closing thinking all my seller had to do was to sign and the problem was going to go away and she was going to avoid foreclosure. But, the bank wasn't going to show this as a satisfaction of mortgage on the seller's credit report. They just weren't going to do it, but they were willing to sign a small loan with her for the $2,500 and have her pay it over time.

My seller was more than fine with this, just to show that satisfaction of loan on his credit. Now after reading the HUD, I noticed there was a math error and the banks calculations were wrong, my seller's payoff amount was $2,200 less than they had quoted. I told my seller this and that we didn't have to do a short sale and we could just pay the $300 today and this could all be over.

That is when my seller started crying and saying, I don't want to delay closing by renegotiating the $2,500 loan they are offering me and during that time the amount owed will go up anyway. It turns out she didn't have the $300, she had nothing left and her 1^st check from her new job was still 3 weeks away.

I couldn't see her cry and I also couldn't see her paying an extra $2,200 over a bank error. I put my arm around her and said, "It will be alright". Then looked at the escrow officer and told her to lower my commission by $300 and zero this account out!

Personally, this was the best $300 I've spent in my life and I have to ask you, would you have done the same in this situation? Too often I hear agents say they will never lower their commission for any reason!

Todd Clark - broker
Kastings & Associates
Phone: (503)524-9494
Fax: (503)622-8739

Posted by Todd Clark (Broker) (503)524-9494 (Beaverton, Oregon Real Estate Expert) on 10/11/2008 10:50 AM

Comments (24)

Short Sales in the Home Selling Channel

giving, commission question, caring, making a difference, short sales, divorce

Originally posted at: Living Beaverton - Your guide to everything Beaverton: Is giving up $300 in commission worth it? You bet!

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24 Comments on Is giving up $300 in commission worth it? You bet!

OCT

2008

I would totally have done the same... and now you're the hero!

Todd~ I don't have a problem lowering my commission if it is MY IDEA and I have done it for my clients in certain situations where I felt it was appropriate and my heart told me to do it.

You are right it IS the best feeling in the world knowing you HELPED someone that really needed it and they didn't expect it!

In the case you describe, you did the right thing. As the comment above says, if it is YOUR idea to do something with your commission then it is a good idea -- but it is when some other entity tells you to that is not a good idea. Our 2 cents.

Nice post. Hopefully the value of that $300 has been returned by referrals from your grateful client.

Been there, done that and more - It is not always an easy decision but if the client is made whole then it is worth every nickle because they are not only your client for this transaction but for life.

Hi Todd... this is a great example of creating good real estate karma. I have voluntarily reduced my already reduced commission on short sales for clients on many occassions... and I have never regretted it. If they are within a few weeks of foreclosure sale by the lienholder I would do whatever I had to in order to seal a deal and spare my clients the pain and hassles associated with foreclosure.

Todd - Wow, an agent with a heart! Absolutely I would have done the same! But, as Vickie said if I am ever going to lower my commission it's because I decided to do it and nobody suggested I do it.

I would totally have done that and been more than happy to! I am so happy to see agents with heart and realizing that in the long run $300 was worth so much more.

I am sure she has not forgotten you!

Sometimes you have to do what you have to do in order to close a deal. I know I would have!

I would have done the same thing and have in the past. You made your clients day and they will always remember you for that.

These are the stories that should be in the media about Realtors! The public at large does not understand that there are agents out there everywhere and every day that go above and beyond for our clients! Congratulations on being that kind of Realtor! I hope you client sings your praises to everyone she knows; you deserve it!

Todd- That's a cool story. I normally will not reduce my fee, especially when the buyer are seller are just being stubborn and stuckon a mental number. But you were a true "problem-solver"! Congrats.

Alan - That is what I thought when I did it!

Vickie - That is why I did it, she didn't ask me too and she was willing to pay the $2,220 extra to make the deal work. It just wasn't right, since it was a math error on the banks part.

OCT

2008

I've heard agents say they would never lower their commission also, but in this type of market, that's a bit unrealistic. I have "kicked in" and lowered mine when it would keep things moving ahead and assist a situation like the one you described.

Bob or Carolin - If this had been the title officer's idea or the client's idea, there would have been no way I would have done it!

Ellie - I did receive one referral from her before she moved to Montana, I do actually miss here, she was a great person.

You did the right thing. In the long run whats 3 tanks of gas?

I understand your concern and it is noble to do just that. .

except:

You don't have the authority to lower your commision . . your broker does.

Judy - It was just stupid that the bank made such a gross error and she was forced to have to either pay or renegotiate which would have in time made the payoff the $2500 anyway by the time it was all done.

Steve - I agree, I couldn't imagine having to find a new place to live because of a 24 hour notice put on my door.

Carol - If someone suggests it, I will pretend I didn't hear a thing and ask them if their boss asks them to take a $500 cut on their paycheck this week would they do it?

George - I think more and more people need to realize that this is a people business and sometimes money isn't the decision that should be made at the closing table.

Jeannette - I didn't have to do this to close the deal, but I only thought it was right, since she clearly was being taken advantage of by the bank on this one.

Tammy or Terry - I hope she does and I hope she decides to pass on that good will to someone else in need in the future.

Samantha - I don't think we will ever hear something like this in the news, you always hear the story of an agent helping a bank take a home. The media loves to portray us as the bad guys.

Wendy - I have been in the situation of the stubborn seller or buyer and I just sit their with my mouth shut and wait for them to figure out what one more months worth of mortgage payments really means to them.

Fran - I don't think you can ever say never in this business! Just to many variables and in a situation like the one I was in, sometimes you just have to go with your heart!

Fernando - In our state we decide our commission and we can lower it if we choose.

A few years ago we had good friends for whom we were selling their house and helping them purchase another. Both deals were to close back-to-back, but the buyers of their first house were being completely unbearable. To make a long story short, we put out $1500 of our commission to help get both deals done on time. And we'd d it again if we had to.

OCT

2008

Hi Todd,
You old softie! That's one of the reason we love you.

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