Hi everyone,

This is my first post and I look forward to networking and sharing wisdom within this group.  I've run this past my broker and my negotiating firm and they both gave me a thumbs up but I know this is a specialized group.  I have an investor buying a short sale about $20,000 below market value.  While screening buyers before accepting an offer, this investor said he would pay the approved price and pay my brokerage an extra $15,000 of commission on the HUD.  Our commission is small on this deal but my guys negotiated a tremendous price. It's a $45,000 and similar properties go for $65,000.  Can I receive this bonus to my brokerage for a job well done and perhaps itemize it as a consulting fee?  The buyer is paying cash. Thanks in advance for everyone's input. God bless.

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Most banks/investors have a commission cap ( Typically 6% or 5%. ). I've processed an extremely large volume of short sales and probably all mortgage servicers/investors would deny an extra commission fee right away. If a bank approved this to go through escrow as part of the sale towards you or your brokerage, I'd be extremely surprised and the thought that they may of signed off on it as a mistake would likely cross my mind. It never hurts to try though and I apologize to be negative!

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This is interesting considering my broker said the same thing. He said bonuses don't need to be on the HUD. I'm concerned with doing everything above board and not playing in the gray area. I deal with several investors and occasionally they pay additional commission towards the deal. If the bank paid out the 6% and the investor who bought the house came to our office and gave the brokerage $10,000 for consulting would that be illegal? I have two kids and a wife and the most important thing to me is doing things right. Thanks in advance for everyone's input.
Thanks for your input on this subject Brian. So when you say its not illegal in terms of going to jail can you be more specific? I'm interested in knowing if I signed an exclusive buyer agreement to represent an investor at 9% paid by them and they bought a short sale at a price they were totally satisfied with how is my agreement to represent this buyer not valid? Whatever the bank pays out is one thing, but I represent this buyer and our agreement is he is supposed to pay my brokerage 9%, he's fine with that? Is this illegal? How do we get our 9%?
Understood Brian, and I definitely value your opinion because I know your track record is strong. I will certainly put it on the buyer side of the HUD and see if it gets approved and if not, then we move on. I'm not doing anything illegal for any amount of money. Thanks again Brian

If you place it on the buyer side as an expense instead of commission it will more than likely get approved. The 6% commission is all the commission you can put in the 700 section of the HUD. But transaction fees and extra commission on the buyer side in the expenses category should be OK.

Thanks Bryant, will do!

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