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Should Lenders negotiate short sale commissions?

By
Real Estate Broker/Owner with LinkUp Realty

Somebody just posted this topic on a different post of mine regarding lenders negotiating commissions on Short Sales

It is true that legally speaking, a lender can't negotiate the terms of a listing agreement or sale.  They can only accept or reject it.  This would mean that they have no right to negotiate down our commission and that they also should not counter offer on a short sale offer.

However

1.) We are legally bound to act in our clients best interests, and should work to keep them from having  a foreclosure at all costs. and 2.) It is ultimately in the lenders court, as they do not have to accept anything other than the payoff from the loan terms, period.

I understand the battle, but the question is, do we as agents or brokers have the right to legally say "no, I don't work for less than 6%(or whatever you charge), and you can go ahead and foreclose or count me out of things if you aren't willing to pay me"????

I do get 6% a good percentage of the time on these things.  What is your experience, and I'd love to hear some tips on how you enforce your commission with the lender???? What can we do to stop lenders from acting illegally??

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Gene Allen
Fathom Realty - Cary, NC
Realty Consultant for Cary Real Estate

I haven't done one yet but who says you should get 6%.  What if I put in 7 or 8%?  But the thing is the bank shouldn't say what we get paid.  They should come in at a bottom line that includes the commissions.

Nov 09, 2008 03:52 AM
Marcia Kramarz
Re/Max Executive Realty - Medway, MA
CDPE,LMC,CBR

I have seen a negotiator UP the commission by 1% so that her fee (1%) would not negatively impact the agent - And the bank went for it - So I guess you can negotiate UP too!

Nov 12, 2008 09:48 PM
Tracy Miller
Canton, MS
S. S. Specialist

Mike, that's great that you're usually able to get 6% commission from these deals.  In my experiences, banks often reduce the agent's commission to 3%.  It was explained to me before by several Loss Mitigators that I was working with that they were already taking huge losses on short sales and couldn't also afford to pay the standard real estate commission.  However, I have discovered that when short sale offers are closer to the property's fair market value, lenders do seem to be more inclined to approve the 5 or 6% commission. 

Mike, I'm curious.  What has been your experience here?  Do you think the offer amount is a key determining factor in whether or not you get the 6%?

Dec 01, 2008 02:55 AM