“On February 24, 2009, Fannie Mae sent Announcement 09-03 to its servicers instructing them not to negotiate commissions on short sales below the amount negotiated by the listing agent (unless the commission exceeds 6 percent). The requirement takes effect March 1, 2009. Fannie Mae recognizes that (a) negotiating commissions for short sales is unfair because getting a short sale to closing requires intensive work over many months, often requiring working with numerous buyers, and (b) compensating real estate agents fairly benefits Fannie Mae because agents play a crucial role in short sales. The Announcement reminds servicers that third party approvals (i.e., private mortgage insurers) may be required, which can affect commissions. NAR has asked both Fannie Mae and Freddie Mac to strengthen their policies against reducing short sales commissions, welcomes Fannie's announcement, and has urged Freddie to follow Fannie's lead.”
This statement above comes as good news to all who are involved in Short Sales and I truly hope that this is a trend that Fannie Mae and Freddie Mac can get spurred off in the lending institutions. Anyone who has experienced a short sale knows that even 6% commission on a short sale is not enough, but banks feel that our time and efforts are of minimal value. I myself have asked several negotiators if they have personally taken a pay cut to see and transaction close and to no surprise I receive little or no response to such rude comment. How dare I attack their source of income, because they put in so many hours on each file and have stacks more in the back ground waiting to be negotiated! Welcome to my world.
Forgive the fact that I feel so negative about an announcement of such magnitude, but I truly believe that it will have very little effect on the overall success of agents to get full commissions out of the banks. Second and third parties have joined in on the crusade and are now refusing to take payment if we receive more than 5% on commission. Not really sure how my commission is going to effect there bottom line, because the 1st is not going to give them anymore if we agree to less commission, but none the less it must be a real rush to have the feeling of someone getting the shaft along with the banks. I also have issues with the fact that we are lead to believe that commission controlling is unlawful and yet boldly stated in the quote about you will see that Fannie Mae is not going to pay any agent under any circumstance more than 6%. Sounds like commission fixing to me! I must be mistaken to believe that our contracts have any validity.
I know that this argument has probably been rehashed about 1 million times and the banks will always take the stance that if they let me have the % that I have charged the client in commission, that we will corrupt the system and begin charging absurd amounts and take advantage of the banks. Sounds to me like they don’t like the thought of “due unto others and you would have done to you”. When was the last time someone invested money at a bank and asked the bank to take a discount on there cut?
Enjoy and please feel free to comment!
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