Short Sale Commission Dispute - Listing Agent is the Seller

By
Real Estate Agent with RE/MAX Coastal Properties Destin Florida
One of my agents wrote up an offer for a buyer, which was accepted by the seller. The bank has now approved this short sale with one exception ... The listing agent is the seller and the bank (not surprisingly) will not allow the listing brokerage to receive any commission. The listing agent had agreed up front to not take any commission, and the bank was happy to agree to pay a 4% commission to the selling agent instead. The listing agent's broker is now furious. So, I am NOT going to pay the listing broker after-the-fact and under-the-table as he has suggested. In Florida (as in most all states) the commission belongs to the brokerage, not the agent. But, in the case of a short sale, the brokerage firms all acknowledge and agree that the bank may modify the commission. If the bank will NOT allow the listing brokerage to receive a commission, then the listing broker would have to pursue his agent for a commission on the basis of their listing agreement? Bizarre set of circumstances - I would appreciate any comments! Thanks, Ed

Comments (5)

Jeana Cowie
RE/MAX Real Estate Limited - Paramus, NJ
Broker Associate, ABR, CRS, GRI, SRES

Hi Ed & Terri,

Bizarre circumstances. If the listing agent agreed  not to take a commission then there is no commission due.

Hope it works out for your agent.

 

Dec 22, 2009 04:23 AM
Tiffany Torgan
Harcourts Prestige Properties of La Jolla - La Jolla, CA
Featured on HGTV's New Show! How Close Can I Beach

Hi Ed,

I agree that it is up to the Broker to go after his Agent for commission...but you would think the Broker would wave it all together since it was his Agent's personal home. One thing for sure, the Agent should have cleared it with the Broker before hand....it sounds like the Agent knew ahead of time that they were not going to get a commission. Good luck! Tiffany

Dec 22, 2009 04:24 AM
Sandy Wagner
RE/MAX Professionals 253.225.8322 - Gig Harbor, WA
Short Sale Specialist Tacoma, WA, and Gig Harbor,

I would be curious to know the answer to this as well. I do know the broker should have been better informed and had another agent handle the listing. My experience has been if the seller is a licensed agent the lender only would pay 4% total commission. It looks like you made out much better in the long run.

Dec 22, 2009 04:26 AM
Jim Dunlap
Roberts Realty - Yucca Valley, CA

It sounds like the bank has cheated the listing broker out of any commission.  Since the listing actually belongs to the broker, and the agent, represtenting the broker, agrees to no commission, then so be it.  This is why its important for borkers to supervise their agents.

Dec 22, 2009 05:09 AM
Ed & Terri Smith
RE/MAX Coastal Properties Destin Florida - Destin, FL

Thanks for the comments ... Unfortunately, many agents/brokers out there are still in the dark as to how to conduct and structure short sales. The listing agent should have never listed this for herself. And I certainly agree that her broker should have been in the loop.  Education is almost always the key.  

But, the listing broker claims that he has spent (get this) "thousands of dollars" advertising this property for his agent. He is pretty adamant about getting paid, even though his agent waived any commission in writing.  Apparently, she has the right to execute listing and sales agreements on his behalf, but cannot negotiate a commission on her own property.  He is threatening to "stop" the closing over this. His closing attorney (very clearly in the tank for the listing broker) has called me to communicate his own personal diatribe.

It will be interesting to see how this all plays out.

Dec 22, 2009 05:17 AM