Did you get the MEMO?

By
Real Estate Agent with HomeSmart International

...you know,....the one about real estate agents getting bailed-out by the government? .......you didn't? ....neither did I! 

But the banks did! ....to the tune of $350 billion and counting!  So why are the banks asking the realtors for a handout?

I grow increasingly appalled by the attitude that the banks have adopted, that the entire world owes them something.

Nobody knows where the $350 billion went, ... the banks are not answering any questions about it, ...there were no strings attached, ...AIG blew over $400,000 on an extravagant week-end party as soon as they got our money, ... B of A just got another $45 billion and so did Citicorp, ...9 out of 10 of the senior executives of these banks, who got us into this mess are still employed commanding better salaries and bonuses, ...the list goes on.

It's not enough for the banks to stand on the shoulders of realtors who are barely keeping their noses above water, by asking them to foot the bill on maintaining their listed REOs, but now, they also want to take part of the realtors' income.

Short Sales and REOs listed on MLS are peppered with ...."2% commission" ...."commissions based on final sales price" "3% total commission if listing and selling broker are one and the same" "bank to decide on commission after sale".....this is just plain wrong!

When did realtors get so weak?  When did we decide to give the banks so much power? why are the local and national realtor's associations sitting on the bleachers?

I don't know about you, but my local association of realtors' listing agreement clearly states that "the compensation payable for the sale of a property is negotiated between the listing Broker and the Seller".

So , since when did we all buy into the concept that the banks decide how much the commission should be?  since when do normal business practices dictate that the price of the services is determined after the fact?

My uncle, in his infinite wisdom, used to refer to this business blunder as "The prostitute principle".....simply stated, "The value of the goods quickly diminishes after the services have been rendered."....and he used to caution me, that once we embark on this road and begin to indiscriminately discount our services, and/or set the price after the fact, we are well on the way to bankruptcy.

This is like going to my accountant and telling him that this year I lost money, so I am only going to pay him half of his fees ..... or going to my doctor and asking him to amputate my gangrened leg but I am only going to pay him half of his normal fees because I now have less body parts....

....if you had somebody build you a house, would you tell him that the amount you will pay him would depend on how much money you had left over at the end of the project?

The fact is, that in every case, the services rendered solves or alleviates the subject's problems....and the problem is the bank's....kind of along that old cliche that reminds us .... owe the bank $100, you have a problem, ...owe the bank $100,000, and the bank has a problem.

Well, the banks' problem is in the billions of dollars!! and they need us more than we need them!! ...and they need us more than ever!!!...short sales and foreclosures are a dime a dozen and more and more realtors are shying away form them because of the confusion, extra work and just plain "it's not worth the trouble"

In 3 out of 4 short sales, you loose the buyer and have to start all over again, the process drags over several months, it's like being in realtor's limbo, unless you decide to sub-contract with a "negotiating" entity to deal with the bank, and then, they take their cut of the commission as well.

So by the time the commission is split between the listing, selling and negotiating offices, and then split again between your broker and you, and then you add up all the hours you put into it, you might as well be working at McDonald's.

Even if the listing and selling offices are one and the same, there is no broker in her right mind that will allow the same agent to run both ends of the deal .... so there again, you have to split commissions between 2 agents.

Maybe the banks cannot afford to solve their problem.....maybe they should just contract with flat fee companies, that will just put a "For Sale" sign on the yard and do nothing more ....if they want to go cheap....but you know what they say about cheap.....you get what you pay for...cheap is expensive!

But we are professionals, and we don't need to apologize for being realtors!! ...not to the banks, not to anybody!  We take pride in what we do  and we do it well.  Out here in the west, we are licensed to do the work of a lawyer when it comes to real estate ..... so if the banks don't want to pay our fees, that is their problem.

Maybe the "Loss Mitigation Officer" should contribute his salary to sweeten the pot.  Maybe if the bank is acting as the seller in these transactions, they should sign an addendum to the listing agreement as well, and agree to the fees at the beginning, not the end. 

Commissions are decided by each individual brokerage.  I am not telling anybody what to charge or what to do ..... I am just saying it is something to ponder.....my commissions have increased and are on a sliding scale when it comes to Short Sales....take it or leave it.

 

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Rainer
138,818
Paul Silver
Tiverton, RI
Rhode Island full service real estate firm

Bravo: The Justice Dept worries that there is collusion between and among Realtors, but then does not have anything to say about contract interference on the part of banks...

Love this post... keep them coming...

Jan 27, 2009 03:44 AM #1
Rainmaker
672,218
Jim & Maria Hart
Brand Name Real Estate - Charleston, SC
Charleston, SC Real Estate

First, wonderful post and I would have to say one of the best that I have read in a long while. I agree with you 100% and I don't every short sale myself. Thanks and take care, Jim

Jan 27, 2009 04:02 AM #2
Rainer
126,444
Tony Grego, 317-663-4173 #1 Trade Association for Alternative Inv
REISA - 317-663-4173 - Indianapolis, IN

Great Post!

Hey, Citibank bought a jet with 50 million. They are using the money wisely

Tony

Jan 27, 2009 04:06 AM #3
Ambassador
2,509,518
Steve Hoffacker
Steve Hoffacker LLC - West Palm Beach, FL
Certified Aging In Place Specialist-Instructor

Federico,

If you could read the fine print on the bottom of the memo the banks got, it said "here's another check but keep it to yourself." :)

Steve

Jan 27, 2009 04:16 AM #4
Rainer
5,149
Tracy Hunter
Virtual Real Estate & Marketing Assistant - Pearl River, NY

Well written Federico, and great points.

Jan 27, 2009 04:27 AM #5
Rainer
56,808
LYDIA LAMOREUX
ZipRealty - Volente, TX

Unbelievable and appalling what they're doing with the tax payers' money.

Is NAR doing anything to combat this trend of banks setting our commission on REO/short sale?

Jan 27, 2009 04:27 AM #6
Rainer
19,543
Federico Astiz
HomeSmart International - Tucson, AZ

Lydia,

I would like to know that as well....what is NAR doing aboutall this? 

let me know if you find out..... but my  personal feeling is don't wait for Godot, each person must take it upon themselves and become the change they seek.

Thank you for the feedback.

Jan 27, 2009 04:35 AM #7
Anonymous
B. Foreman

I totally agree with you and your uncle was a wise man! LOL

:)

Jan 27, 2009 07:02 AM #8
Rainmaker
288,571
Kent Simpson
Realty One Group Mountain Desert - Tucson, AZ
Real Estate Is About People

You and I have had this discussion in the office, Federico - and I applaud putting it out in the public eye.  What about RESPA and the insistence by banks to choose the escrow company--isn't that a violation of neutrality?  I may be wrong, but it surely can be looked at with collusion in mind.

Jan 27, 2009 11:39 AM #9
Rainer
19,543
Federico Astiz
HomeSmart International - Tucson, AZ

I totally agreee.  It feels as if the banks are practicing real estate without a licence....they are calling the shots with complete and total disregard for real estate law.

They really do not know what they are doing and a lot of legal violations are beginning to surface....they are not above the law..... ignorance is no excuse....they must and will be held accountable...

...what really concerns me, is that the Real Estate community is allowing them to do it....we are all living witneses as to what these scoundrels have done and continue to do to the financial health of this country.

Their wings must be clipped ...will NAR ever stand up for what is right?

Jan 27, 2009 12:33 PM #10
Rainer
9,191
Shelley Kreutzer
Community One Realty - French Valley, CA

Great Post! I have to agree with you.

Jan 28, 2009 11:11 AM #11
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Rainer
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Federico Astiz

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