I'm the broker/owner of a small firm. My wife and I are attempting to purchase a $300k Chase short sale for our primary residence. We got the approval letter a few days ago and I saw that they cut the commission from 6% to 5%. Well, that's a real bummer since we were going to use that money toward closing costs, but I'm used to it happening. Then I continued reading the letter to find that this is one of those Chase "incentive" deals and the seller is getting $30,000 at closing! This is after he sucked every last bit of equity out of the house at the peak of the market! That really put the commission thing into perspective!
I've been trying to find out if Chase is the investor or if it's a GSE and I've also been trying to confirm whether it's technically a HAFA short sale so that I know if Chase is even allowed to cut the commission at this point. The problem is, I can't look up the investor without the borrower's social security number, and I don't have access to the SSA/RASS/Alternative RASS/etc because I'm on the buyer's side. I mentioned something to the listing agent, and she claims that it's not a HAFA short sale, but I'm not sure she even knows what she's talking about. I also have a suspicion that the seller/borrower is going to take care of the listing agent from that $30k if she can keep us from making waves.
At this point, I want to contact the negotiator myself, but I want to make sure I have all the facts that I can get. I think Chase is just taking the 1% away because they can. They know that, under normal circumstances, an agent/broker has a conflict of interest where, if they threaten to walk away from the deal, they're working against their client's best interest. Especially when there is $30k on the line for the seller; if the agent killed the deal over 0.5%, the seller would go ballistic! I'm in a unique position where getting the full commission IS in my client's best interest. And besides all of that, giving this buyer $30k and shorting me (and the listing agent) $1,500 is just not right.
Any advice is greatly appreciated!
First, how do you figure that a WaMu portfolio loan cannot qualify for a HAFA short sale???
Second, asking the seller's agent to reduce her commission by another .5% would certainly not be fair (unless I knew for sure that she was being paid under the table). Maybe that was a test?
The principle of the deal does not matter, if it is a good deal and you want to buy it, buy it. If not, then don't. The bank can condition commissions, they can give the seller incintive to short sell, they can do whatever they want, simply becuase they do not have to approve a short payoff. You have the ability to agree to or not to agree to their conditions, just be careful you don't negotiate yourself out of the deal over principle.
I agree with Sam here 100%. If it is the deal that you want, buy it. Seems silly to fuss over $1500 on a $300,000 home. What the bank agrees to with the seller should have no bearing on your decision and what the seller does with the money should not matter to you.
I don't know what to tell you! If $1,500 isn't worth at least a little investigating for you, you're either doing a lot better than my family, or your cost of living is a whole lot higher! That'll pay two months mortgage on our new rental (the house we're moving out of)! I'm just not willing to give it away without giving it a second though... especially if the bank is doing something illegal and pushing people around because they can.
Billy, slow down, who said the bank was doing something illegal? You are qualified to purchase a $300000 home and you are fighting over $1500? I don't blame you for trying to keep your commission but as a buyer and a buyers agent, you have no control over that and I hope you understood that going in.
The bank has no obligation to you, they have an obligation to the seller and if Chase feels that giving the seller $30,000 is in the banks best interest, why is that an issue with you?
You can not find out about this loan unless you have authorization. You can however go to the Fannie Mae lookup tool and see if it is a Fannie Mae property.
Slow down, don't get so upset and you will get plenty of help here with your issues.
Jeff, please see my response to Sam in regards to the legality. I assumed those on this site would be more aware of the rules, and that is my mistake. It's ok to be uninformed, I didn't know any of this until recently, but when you ("you" generally, not "you" specifically) refuse to consider that somebody knows something that you don't, and when you (again generally) carelessly misinform others, is when I have a problem with it.
Thanks for the response none-the-less. I'm not NEARLY as worked up as you guys think I am... but that's the intarwebs for ya!
Billy, please, do you want help or do you want to sit back and anonymously take pot shots. It is OK to be uninformed but what is not OK is for you to ask a question and then get pissy when someone tries to give you an answer. Sounds like you already have this figured out. If you want the home you will buy it, if not you won't. Pretty simple.
I could not find a legal response, are you referring to the HAFA guidelines?
Wow this turned heated very quickly. There are guidleines for certain loans -- Fannie and Freddie -- you are right. The websites for each to check whether it is one of their loans requires that you have the owner's permission to check and as the buyer's agent ... you don't. In fact, Freddie Mac's website will not give the correct information unless you put the last four digits of the SSN of the primary borrower into the website form. I haven't heard of the HAFA program being coupled with one of the $30,000 seller incentive deals out there. Not sure that would meet HAFA guidelines -- it's pretty structured -- but I don't know for sure. The HAFA seller incentive is usually listed on the HUD, but on the seller side which they may not provide to you as the buyer's agent. In my neck of the woods, my compensation as a coop broker is set by the offer in the MLS. Most short sale listing agents put in a caveat that if the lender reduces the original amount that they will split the reduction by such and such percentage. I understand your frustration, but the fact that the seller is getting $30,000 really doesn't affect anything. They are really two separate issues.
Sam, perhaps you're suggesting that I shouldn't get hung up on the principle of the deal, but you can't tell me that it doesn't matter. It does matter... to my wife and I. If it didn't, I probably wouldn't have bothered posting. But the question was really "how can I find out if this is a GSE and/or HAFA?"... the rest was mostly context. Maybe you're not aware of rules that restrict servicers from reducing commissions under certain conditions? It sounds like that's the case.
Thanks for the good intentions,
Billy, you really need to learn to seperate business from emotion. Conducting battles for the "principle" of it is a waste of time when you are speaking to a relatively insignificant amount, which I guess you must have more of than money, which may be telling. The banks do not have to participate in a short sale, and if they do, it is within their rights to condition whatever they want. And it is within your rights to reject and not purchase. To say that it is illegal for them to condition their acceptance of a large loss on a reduced commission is a joke.
I suggest your call their bluff and withdraw your offer if you do not like it.
To say that it is illegal for them to condition their acceptance of a large loss on a reduced commission is a joke.
Sam, you don't know what you're talking about. I'll take emotional over ignorant and arrogant any day.
From the official Making Home Affordable Handbook:
Section 7.8 Approval or Disapproval of Sale
Additionally, the servicer may not require, as a condition of approving a short sale, a reduction in the real estate commission below the commission stated in the SSA.
Section 8 Alternative Request for Approval of Short Sale
Servicers may not, as a condition of sale, require that the real estate commission stated in the sales contract be reduced to less than six percent of the contract sale price. If a servicer retains a contractor or vendor to assist the listing broker with completion of the transaction, the servicer must include a statement in the Alternative RASS form that any associated vendor fees will not be charged to the borrower or deducted from the real estate commission.