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 Kieran Jackson on
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Jim... That's exactly what that means. So, now we know Wells Fargo and Citi do NOT allow it! The agent can't list their own, nor have an agent in their broperage list it, nor can they collect a referral fee, with these two lenders.
Jim West said:Jeff, would you agree that th mortgagor is the seller?
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Permalink Reply by Jeff Payne on
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I agree but just know that it has to be disclosed. You guys are taking no for an answer too easily. Wells allows it, I have seen it happen right in my market place. I guess I could argue that if I am the seller, I am not a family member, I am the seller and the agent.
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So now an agent in their own brokerage can't list the property? I agree 100% that they can not recieve a referral fee.
Kieran Jackson said:Jim... That's exactly what that means. So, now we know Wells Fargo and Citi do NOT allow it! The agent can't list their own, nor have an agent in their broperage list it, nor can they collect a referral fee, with these two lenders.
Jim West said:Jeff, would you agree that th mortgagor is the seller?
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Permalink Reply by Mike Ashcraft on
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The fact is, yes, there are banks that will not allow it. Period. But, there are some banks that WILL. So using absolutist language like: "If the agent is the owner of the property they cannot list it", is not correct. The reality is listing your own home will probably bring up more problems than not. I know because I listed my own, and I know that I didn't get paid for it and why go to all that work for nothing... yada yada. But this was over 2 years ago and there was almost zero agents in my market that understood how to effectively complete a Short Sale. So being the control freak that I am, I put the time in to make sure it was done properly. The bank had zero problem with me listing it, the negotiator just reminded me that I wasn't going to be paid a commission for it. They made sure in the listing agreement and in the HUD that there was 3% going to the buyer's agent and zero to me, and other than that they gave me no grief about it.
It really comes down to the original question which was: CAN the agent list their own Short Sale properties? The answer is YES, if the bank is ok w/ it and that depends on the bank, but still the answer to the question is yes because it CAN be done. If we all want to argue or debate on if an agent SHOULD list their own properties, then we should start a new discussion thread on that, thats a different issue.
Jim West said: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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Permalink Reply by Yolanda Hoversten on
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Hello again.
Mike went back to my question whether or not an agent can, and he is correct that I wasn't asking whether an agent should. I learned from the discussion that:
- yes an agent can, but it depends on the lender/servicer
- that the seller/agent cannot receive commission/referral fee from the transaction
- that it should be an arm's length transaction
I also learned very early on that there is exception to every rule or regulation.
Bryant posted the question through the SSS newsletter on ActiveRain, perhaps it will get traction there now.
Great discussion! Thanks all.
-Yolanda
Mike Ashcraft said:The fact is, yes, there are banks that will not allow it. Period. But, there are some banks that WILL. So using absolutist language like: "If the agent is the owner of the property they cannot list it", is not correct. The reality is listing your own home will probably bring up more problems than not. I know because I listed my own, and I know that I didn't get paid for it and why go to all that work for nothing... yada yada. But this was over 2 years ago and there was almost zero agents in my market that understood how to effectively complete a Short Sale. So being the control freak that I am, I put the time in to make sure it was done properly. The bank had zero problem with me listing it, the negotiator just reminded me that I wasn't going to be paid a commission for it. They made sure in the listing agreement and in the HUD that there was 3% going to the buyer's agent and zero to me, and other than that they gave me no grief about it.
It really comes down to the original question which was: CAN the agent list their own Short Sale properties? The answer is YES, if the bank is ok w/ it and that depends on the bank, but still the answer to the question is yes because it CAN be done. If we all want to argue or debate on if an agent SHOULD list their own properties, then we should start a new discussion thread on that, thats a different issue.
Jim West said: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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Permalink Reply by Doug Packard on
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Lots of misinformation on this thread. I listed and negotiated my own short sale. I am the broker of my company, and as long as the commission was paid directly to the company, neither of my lenders (Wells Fargo and Citi) had a problem with it.
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Permalink Reply by The Negotiator on
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And I'm sure you "forgot" to tell them that the commission was going to paid directly to you, did you?
Doug Packard said:
Lots of misinformation on this thread. I listed and negotiated my own short sale. I am the broker of my company, and as long as the commission was paid directly to the company, neither of my lenders (Wells Fargo and Citi) had a problem with it.
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Permalink Reply by ElizabethWeintraub00697006LyonRE on
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Forget the referral fee. Just get another agent to do it. Never mind the liability issues. Pay up your E&O if you do it yourself. Like others have said, there can be no commission to you. You cannot profit from the short sale.
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I didn't "forget" to do anything. The approval letters and my discussions with the negotiators indicated the commission had to be payable to the company. They were aware I owned the company. My persistence and skill netted them more out of the transaction and they recognized that fact. A good portion of that commission went to settle the second, so it's not like a pulled a fast one or made out like a bandit. I resent your insinuation that I did something dishonest.
The Negotiator said:And I'm sure you "forgot" to tell them that the commission was going to paid directly to you, did you?
Doug Packard said:Lots of misinformation on this thread. I listed and negotiated my own short sale. I am the broker of my company, and as long as the commission was paid directly to the company, neither of my lenders (Wells Fargo and Citi) had a problem with it.
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It really doesn't matter what you or I think. It only matters what a judge will believe if you stand in front of him or her. I'm sure nothing will happen, however, I think the majority of us in here are saying that it's just not worth the risk. That being said, if your short sale approval letter DOES NOT state anything about the homeowner will not being allowed any money from the transaction, then forget everything I said and an awesome job on your commission and closing. BTW, what lender was your deal with?
Doug Packard said:I didn't "forget" to do anything. The approval letters and my discussions with the negotiators indicated the commission had to be payable to the company. They were aware I owned the company. My persistence and skill netted them more out of the transaction and they recognized that fact. A good portion of that commission went to settle the second, so it's not like a pulled a fast one or made out like a bandit. I resent your insinuation that I did something dishonest.
The Negotiator said:And I'm sure you "forgot" to tell them that the commission was going to paid directly to you, did you?
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Permalink Reply by Kathy Dyer Realtor Rosevillle Ca on
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I do know that Freddie Mac GSE HAFA does not allow you to list your own property. Not even with the same brokerage. The arms length agreement within the HAFA rules.
I got a referral from a Realtor, another brokerage, who wanted to do a HAFA short Sale-so we listed it. We just got it approved- the value came in nicely too. ***One thing on Freddie Mac Hafa- you can not list the property until you get the SSA approved and they give you the value. We have value now and our buyer came in at list price! Sweet!
We will close in 30 days now.
It did take longer for HAFA to approve with Freddie.
Good luck
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Thank you, Kathy. This is good to know.
Sweet indeed! Hope everything goes smoothly with the closing.
- Yolanda
Kathy Dyer Realtor Rosevillle Ca said:I do know that Freddie Mac GSE HAFA does not allow you to list your own property. Not even with the same brokerage. The arms length agreement within the HAFA rules.
I got a referral from a Realtor, another brokerage, who wanted to do a HAFA short Sale-so we listed it. We just got it approved- the value came in nicely too. ***One thing on Freddie Mac Hafa- you can not list the property until you get the SSA approved and they give you the value. We have value now and our buyer came in at list price! Sweet!
We will close in 30 days now.
It did take longer for HAFA to approve with Freddie.
Good luck
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