Can agents list their own short sale properties?
Hello. This is my first post here, and I wonder if the superstars can help me. There's a question in my Activerain SFR group that I think needs some authoritative answer. The question is, can an agent be the listing agent for a short sale property owned by the same agent? ( I think I mangled that - lol.)
I believe the agent can, as long as the same agent doesn't benefit (get paid commission) from the sale. I know I read this somewhere, but can't cite chapter and verse. Can you help? Thank you so much!
Replies to This Discussion
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Permalink Reply by Jeff Payne on
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Ellen, I appreciate your response and I am not trying to pick a fight here but the information that you have given us is really not true. I see this happen quite frequently and also see the listing agent being related to the seller and have seen buyers agents representing their immediate family members with no issues. Maybe HAFA has a rule but your statement of "no bank will allow it" is not correct.
Ellen Levy said:That is correct. A family member can not.
I have attended huge numbers of seminars on Short Sales, have successfully completed about a dozen, and was thinking of short selling my home and an investment property. I have also been taking weekly Short Sale training from Harris Real Estate University (HREU) for over a year. I am also a CDPE Advanced member. I attended the meeting when NAR's point man on HAFA and HAMP discussed those programs in detail, and I listened to the replay on HREU.
I can not remember precisely where I heard this, but I have heard it multiple times.
No, you can not be the listing agent on the short sale of your home. No lender will allow it. None would believe you about value, or that you made good faith efforts to market the property for top dollar.
No, you can not list it with a team mate.
No, you can not list it with a relative.
Listing with someone else in your company is a possibility, but there had better not be any hint of collusion, referral fees, and the like.
Arms' length means very long arms.
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Permalink Reply by O. Kheir on
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Let's agree that if :
1. if you can't handle the stress of doing your own short sale (and disclosing it from the beginning) or
2. if you get too nervous or emotional dealing with your own short sale, or
Don't do it!
Otherwise, it should be like any other transaction you do with Honesty, Integrity, Knowledge and Service - shouldn't it?
It's a great life!
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Amen!
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Permalink Reply by Mike Ashcraft on
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No. The homeowner can't benefit at all from a SS transaction.
Kieran Jackson said:
Can you give it to another agent and collect a referral fee from their commission?
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I agree with Jeff. Firstly, because I was the listing agent on my own home that was a SS transaction. It all depends on the lender you are working with. If a lender is smart, they should be thrilled to have an owner/agent work out their own SS. It saves them the 2.5-3%. The argument "None would believe you about value, or that you made good faith efforts to market the property for top dollar", makes no sense because the bank doesn't take our word or even "professional opinion" about what a property is worth. That's why they pay the money for an Appraisal or a BPO. That's how they set the value in any SS transaction. Really the two main questions a lender asks when doing a short sale are: 1) is there a legitimate, verifiable hardship, and 2) does the offer meet the investor's minimum net requirement based on the BPO/Appraisel. As many of us have painfully found, they don't give a rip what we think as Agents. Also, though I wouldn't advise it, you can list a relatives SS. I've seen it done. The bank requires extra documentation proving the money is not going to end up back w/ the home owner. One major question they ask is if the agent and home owner live in the same household. Again, this really comes down to a specific lender's guidelines/policies. You can't just say No they won't allow these things, thats just not true.
Jeff Payne said:
Ellen, I appreciate your response and I am not trying to pick a fight here but the information that you have given us is really not true. I see this happen quite frequently and also see the listing agent being related to the seller and have seen buyers agents representing their immediate family members with no issues. Maybe HAFA has a rule but your statement of "no bank will allow it" is not correct.
Ellen Levy said:That is correct. A family member can not.
I have attended huge numbers of seminars on Short Sales, have successfully completed about a dozen, and was thinking of short selling my home and an investment property. I have also been taking weekly Short Sale training from Harris Real Estate University (HREU) for over a year. I am also a CDPE Advanced member. I attended the meeting when NAR's point man on HAFA and HAMP discussed those programs in detail, and I listened to the replay on HREU.
I can not remember precisely where I heard this, but I have heard it multiple times.
No, you can not be the listing agent on the short sale of your home. No lender will allow it. None would believe you about value, or that you made good faith efforts to market the property for top dollar.
No, you can not list it with a team mate.
No, you can not list it with a relative.
Listing with someone else in your company is a possibility, but there had better not be any hint of collusion, referral fees, and the like.
Arms' length means very long arms.
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Mike, the homeowner does benefit from the short sale :) They just may not be able to get cash from the sale. Each lender is different so it is impossible to say that a seller can NOT list their own short sale 100% of the time.
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Yes, my semantics were off. But, you know what I meant. And to be clear when you said "Each lender is different so it is impossible to say that a seller can NOT list their own short sale 100% of the time." Were you just agreeing w/ what I wrote or thinking that I was saying something to the contrary?
Jeff Payne said:
Mike, the homeowner does benefit from the short sale :) They just may not be able to get cash from the sale. Each lender is different so it is impossible to say that a seller can NOT list their own short sale 100% of the time.
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Permalink Reply by Jim West on
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Yolanda,
If the agent is the owner of the property they cannot list it. I have had seveal cases with different banks where I have had the buyers for these properties owned and listed by the agents. All of the banks have made the agent take the listing out of their name and re-list with another agent before they would work the short sale. If the agent lists their own homes it is no longer and "Arms' Length" transaction. I hope this helps.
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we are on the same page :)
Mike Ashcraft said:Yes, my semantics were off. But, you know what I meant. And to be clear when you said "Each lender is different so it is impossible to say that a seller can NOT list their own short sale 100% of the time." Were you just agreeing w/ what I wrote or thinking that I was saying something to the contrary?
Jeff Payne said:Mike, the homeowner does benefit from the short sale :) They just may not be able to get cash from the sale. Each lender is different so it is impossible to say that a seller can NOT list their own short sale 100% of the time.
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Jim, I have to disagree 100% with you. The Arms Length Transaction is in regards to the buyer and seller having a relationship, not the seller and their agent. The bank can not tell the seller who they have to hire to sell their home simply because the bank does not own the home. I have not seen one piece that tells us that an agent or their family member can not list their property as a short sale, we actually have agents right here at short sale superstars that have listed and closed their own short sale.
This comes directly from Wells Fargos arms length transaction form:
No party to this contract is a family member, business associate, or share a business relationship with the mortgagor. Further, there are no hidden terms or special understandings between the seller or the buyer or their agents or mortgagor.
The Buyers and Sellers nor their agents have any agreements, written or implied that will allow the seller to remain on the property as renters or regain ownership of said property ay anytime after the execution of this short sale transaction. None of the the parties shall recieve any proceeds from this transaction except the sales commission.
Jim West said:Yolanda,
If the agent is the owner of the property they cannot list it. I have had seveal cases with different banks where I have had the buyers for these properties owned and listed by the agents. All of the banks have made the agent take the listing out of their name and re-list with another agent before they would work the short sale. If the agent lists their own homes it is no longer and "Arms' Length" transaction. I hope this helps.
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Jeff,
I guess we can agree to disagree. I agree with you that all banks will treat this differently. As I have mentioned, I have had several deals in representing the buyer and the listing agent was the seller. In all cases, and the most recent one was Chase, the bank requested the listing agent/seller take the listing out of their name before they would process the short sale.
Also, CITI's Arms Length transaction wording says "no party to this contract is a family member, business associte or share a business interest with the mortgagee" , which means no relationship to the seller.
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