Would the bank allow the Seller to pay additional commission on top of what the bank is already paying?  Some price points are very low and makes no sense working on this deals, but the homeowner still needs the help.  Any ideas?

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Should be possible, if the seller has the funds to do so.  Just make sure you show it on the HUD.  The short sale lender could then object, but remember they only really care about their net.  So if they approve a certain net payoff figure, they may not care if the seller compensates you above and beyond the commission the lender agrees to pay.  But again, show it on the HUD!

I'll keep that in mind.

Thank you!

Hi Jose, Seller has no money... He cannot pay for any additional commissions, nor repairs, nor warranties etc.  Don't know what your commissions are down there but you should be able to get the normal commissions for your area. 

Some of this properties are selling for 20K, if we get 6% from the  bank and then have to split it with another broker.  It doesn't make sense to put all that work into it for $300 commission.

We have the same issue in our area - I am starting to put minimum commissions in on those.  I make sure the bank agrees up front we just can't do all that work for $300-$500 commissions.  I was successful with Fifth/Third on a little lot.  Sold for $3500 and they agreed to pay $1500 commission.


I have found that you can set a minimum commission by not using the percentage fee.  However the lender does have to agree to that up front. 

No! The lenders will absolutely NOT allow a seller to pay on commissions on a shortsale type scenario, if that's what you are asking. Any funds outside of the shortsale approval is required to be sent to them as a condition of the shortsale. Since you have to disclose it on the Hud-1 they will definitely be aware of it. My stomache actually had a knot in it and my heart sank when I read your question. No disrespect to you and I'm glad that you posed the question because I can guarantee that a lot of agents have the same question and/or thoughts regarding the subject matter. That's why working with distressed property owners is NOT for everyone. Why would an agent ask a distressed property owner to do such a thing? Even if they are not in arrears of their property, their property is in distress due to being "underwater" in value. Either way they will take a serious hit on their credit record. I've been a Preforeclosure/Bankruptcy/Fraud Specialist for 15 years and that's all the kind of real estate I prefer to work on. I didn't just start working with the distressed property owners when the market crashed. It's my passion/specialty and ministry. I truely believe that you reap what you sow in life. When the market crashed so did my income. Why? Because I made a conscientious choice to help keep property owners from getting foreclosed upon and subsequently, becoming homeless. That's why for the past 3+ years todate I've kept several families in their homes MORTGAGE FREE and yes, I have not made any commissions during that timeframe. However, I have not been homeless nor hungry either. I'm glad that when the market crashed it weeded out (eliminated) a lot of agents who should not have been in the business in the first place! I wish you the best. Peace & blessings always!!!

Thank you Dana.  I agree with you.  We are here not only to make a living but also to help homeowners who are stressed and need out expertise to guide them through this quagmire of financial mess.  

I talkd to my accountant about finding something else to do the other day.  I have heavily invested in real estate.  With the distractions, of two fires on two properties and failure for the insurance company to notify the escrow company of the insurance lapsing on one, they are now intending someday to pay out on, a legal battle on the second property that appears to have a debtor attempting to commit bankruptcy fraud (even though we are in first postion on both underlying contracts), and a running foreclosure on a third proprty, in addition to helping clients with short sales, I asked the accountant what he thought I might go do as I am fairly burned out. 

Our properties that are sold on contract and the rentals plus trying to keep up with the short sales seems a bit much at times with all the short sale obsticles of day-to-day transactions.

If I thought for a minute that I was going to agree to save others and put myself in harms way,or even make myself homeless with no retirement, I would REALLY have to reconsider whether it would be worth rolling out of bed.  Especially, if I thought I wasn't going to have a bed myself.

My hats off to you. 

My accountant told me to stay with it but get a hobby to keep my spirits up because I am not in control of the distractions. La-la-la-la-la-la... He does quartet.

Teresa-I can relate to what you are going through.  I have found another way to supplement my income so that has been a welcome distraction. I think I will be replacing my real estate income in about 90 days with whole lot less hassle. :) I hope you find something as well.

P.S. - I've read everyone's responses after my initial reply and they are so true EXCEPT I don't want anyone confused about commissions outside of the shortsale approval. Please let me reiterate that I have, respectfully, been a Preforeclosure/Bankruptcy/Fraud Specialist, on a full-time basis, since 1995. Therefore, I can assure you that NO lender in NO state will allow a buyer or a seller to pay extra commissions. Sadly, It's just not going to happen. That's why your contract should say (and most lenders require it), "All offers are contingent upon the final approval of the seller's lender due to the anticipated shortsale." Obviously, it's a "catch all" phrase that lenders use to control the deal up to and including commissions. If a agent doesn't include that statement, they are setting themselves up for failure and possible legal repercussions against the seller. Lenders just won't allow it or take that kind of risk. This is due to the fact that the lender's philosophy is that any excess funds must go to them because they are taking thousands and thousands of dollars in losses. I guess I also go by a statement my mother taught me as a child which is, "some money is better than no money." I've gone further with that statement than my Business Degree ever took me :-) As someone mentioned on here, they are so happy that you've saved them from foreclosure until they will spread the word. The bulk of my business for several years has sole been based upon referrals from clients and agents by word of mouth. I haven't paid to advertise in several years to be frank. Blessings to all of you who have made the ultimate sacrifice of assisting distressed property owners with reduced commissions. I know that if you did it from your heart, you will get it back some way in this life :-) Kudos to Jose for bringing up this question, too!

Not true. I have had lenders agree many times to my seller paying me additional commission.. Sorry but you are wrong. I have also had buyers contribute to 2nd liens in amounts in excess of $10,000. fully disclosed to the lender and on the HUD.

I've also had sellers pay me commission at time of listing, before closing and after closing. All fully disclosed and perfectly legal.

I am always amazed at the opinions being put forth as law and absolutes that I read on these threads. EVERYTHING in a real estate transaction is negotiable and that includes commission.




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