My broker just came to me with a question and I didn't know the answer, so I'm looking for some guidance. We have an agent in the office who is charging the BUYER of her short sale properties a flat fee at the closing to process the short sale. This fee is disclosed in the contract as well as the HUD. Is this OK? Legally speaking? Does anyone else do anything like this?
Here are some video testimonials for our Short Sale Lead Machine websites from just a few of the agents who are utilizing them! More coming soon...
First off, what I am about to state regarding commissions is in no way an indication as to how much my brokerage charges nor is it construed as best practices for other brokerages in setting real estate commissions. The number reflected here is for example purposes only! Now that said...
Adjusting a co-broke is the best way to accomplish compensation on a short sale. You do not have to justify it to anyone. I personally do it in two ways:
1. Adjust the co-broke to make it profitable for my company in the manner you suggested.
2. Have the buyer make up the difference. For example, let's say I have a 10% listing agreement and the seller's lender only pays for 6%. I then have the right to collect that 4% difference from the seller. This seller expense then can be moved to the buyer, so the buyer could pay the 4% difference. You will need to check with your state law regarding how this can be accomplished.
I would love to hear what other agents do in markets where you get a listing that is as low as 10K and the seller wants help? I get a lot of under $30K deals and can not find it to turn them down. By the time I get paid out of the deal it is just not worth it.
any feedback on this would be greatly appreciated. I struggle with this tremendously and am unable to say NO to anyone.
I would team up local investors and have them pay your brokerage a fee to offset the compensation paid by the foreclosing lender. Too many agents think like agents and confine themselves to a standard number.
Personally if there were 10k listings in my area, I would try to pick them up for $500 or less. How much will it cost the bank to foreclose and dispose of?
Not in Maine, need to be a licensed debt negotiator or an attorney to charge upfront fees...check with your state first
We're not talking about upfront fees.
Good "ole Tracy, opening up a can of worms!
I LOve this Realtor's idea! Why not charge the Buyers? After all- when negotiating the short sales you really are doing a lot of work for the BUYERs. The only thing is, as a Lister-you are not representing the BUYERS (usually) so how can you charge the Buyer? Well- you put the price the Buyer is contributing to the Listing Brokerage on the HUD I suppose. Good Question and great idea! I will follow this discussion! Debra Savittieri
I agree with being compensated accordingly for the work, as many have also stated. We offer co-broke 2.5% and we keep 3.5%. We have had only ONE agent question this procedure. When I have a buyer client, I readily accept & will show/try to sell a home offering me 2.5% on a short sale, as I understand the work involved. However, if we see a listing that is charging my buyer directly a "negotiating fee" at close, we will not belooking at that home....
I wouldn't see a problem with this. As long as it's not an upfront charge, and it's all right above table right from the start with your buyer and they understand what they're paying for. You're providing a service to the buyer, you're charging what the market will bear. If the buyer takes a look at what they're getting, and overall it is a better deal than they can get elsewhere then it's still a win-win. If your charge changes the complexion of the deal enough that it no longer presents itself as such, then the buyer has other options and should use them. If the charge is affecting the numbers enough to prevent the deal, the market will tell you so and you'll need to adjust...as always. My $2...only because I can't find a "cents" symbol. Everybody have a good day.
I think we should be paid a minimum of $35.00 an hour to handle a short sale by the bank(s)....As long as you have a proven track record of providing all documents correctly and in a timely fashion IE Equator task time periods etc....Even if it doesn't close!....I have too many experiences with B of A and 3rd party servicers that are inept....
I personally don't do this, but anything that buyers or sellers sign and date in writing is legal, my commsission is for the work I do. Some things such as this could go against the Agent or Broker as far as future business is concerned, but that's down to them, their consciounce and how much harder they like to work at getting new business when someone who doesn't charge this fee such as myself notice the clients come back to me and refer everyone they know and come across to me. There are enough fees already being charged for this. Each to his own, but yes is legal.
As long as it is disclosed in the RLA and/or RPA, it is disclosed on the HUD AND the Lender Approves the fee on the HUD, my understanding is that it is Legal. It is all about disclosure. Of course, the Buyer could try to Counter this out of the contract.