We all know that working with short sale listings can be a tremendous amount of work. Banks and sellers can be uncooperative while buyers often become impatient. Sometimes I just want to pull my hair out when dealing with banks!
Of course, agent commissions are also often reduced by the bank(s) involved in the short sale transaction and sometimes even more if an agent is working as a Transaction Broker.
On February 24, 2009 Fannie Mae sent out an announcement to servicers. Part of the announcement highlighted the negotiation of agent commissions:
No Negotiation of Preforeclosure Sales Commission
Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers
Effective March 1, 2009, closing of preforeclosure sales may not be conditioned upon a reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales price of the property in aggregate. Servicers are reminded that they must continue to obtain any approvals that may be required by interested third parties in connection with preforeclosure sales.
It is good to see some action is being taken on behalf of real estate agents but this announcement is not law and servicers can still negotiate commissions. There are many short sale properties on the market right now in Colorado Springs (and everywhere else) and Realtors® play an integral role in the sale of these properties, which in turn assists the real estate market as a whole.
If Realtors® are so important in the short sale process, why are banks negotiating commissions and why is no one standing up for Realtors'® rights? Realtors® have no support when it comes to dealing with banks and I have a problem with that. Of course an agent has the right to reject the bank's decision about reducing his/her commissions but that would result in the buyer and seller being negatively affected. My goal is to assist sellers in eliminating the burden of a mortgage which they can no longer afford and to avoid foreclosure but I also need to make a living. Many homes for sale right now are comprised of short sales and avoiding them is not the answer.
Where is the National Association of Realtors® when we need them? What are they doing about this issue if anything? Maybe I missing something, but I don't see anything being done to protect Realtors® when it comes to short sale negotiations with banks.
I spoke with the Colorado Association of Realtors and they gave me some phone numbers to call but they didn't have any information for me either. It seems as though no one really knows the rules when it comes to short sales and that Congress is protecting and assisting banks while overlooking Realtors®.
Providing real estate information and services for Colorado Springs home buyers and sellers.
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Patricia,
I can understand. I hear the same thing from our customers nationwide. Although, we have no influence over NAR, we do all we can to support our customers. I encourage all Realtors to contact their local board and NAR to put some pressure on them. The more pressure NAR recieves, they will have to eventually step up to the plate regarding short sales and the commission from short sales. Short sales are the new real estate right now and just like you said, you want to help clients avoid foreclose but at the same time you have to make a living too.
We are partners with Distressed Properties Institute which I'm sure that you're familiar with if you deal in short sales. If not, check out their site. They train and certify agents in short sales and foreclosures. http://www.distressedpropertyinstitute.com/index.htm
We have continuously supported and been the #1 virtual tour provided for a large number of Realtors who deal in short sales.
I wish you luck and I do hope that NAR will come around and put something in stone for the protection of all Realtors nationwide who deal with short sales.