Does Second have a right to reduce agent commission?

I have a short sale with BOA on the first, Chase (turned over to a lawyer) is on the second. The first is for $180,000 and the second is for $40,000. This is a cooperative short sale where the bank set the price. The rep for the second wants to get in everybody's pockets. He wants funds from the seller, asked if the buyer would contribute to pay off the second, said Chase would reduce my commission to 5 percent, etc. What are the "rights" of the second? Can they see the HUD, reduce commission, ask the buyer to contribute, etc? I know they can ask for anything but I'd like to know what is typical and expected.

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Permalink Reply by DON BUSH on August 19, 2012 at 7:50am

p.s., 

We just got 7% and firmly refused to reduce! It closed fine.

Permalink Reply by Melody Najera on August 20, 2012 at 8:21am

With all of the files that I have processed basically the bottom line is the 2nd can ask for anything they want and can hold up the full approval of any file.  If they don't agree and you can't negotiate something with them the deal is dead.

If your concern is commissions there is a company that can help you Recover Fees on files that you could not get your full 6% on.  http://www.feerecovery.net/

If anyone has tricks on getting the 2nd to agree to what the 1st is giving pass them on....

thanks!

Melody - Sacramento, CA

Permalink Reply by Paddy Deighan, Esq on August 20, 2012 at 10:15am

technically and legally, the neither the first or the second has the authority to reduce a commission since it is a contractual arrangement between a buyer and seller. That is why many times, the approvals merely state a net amount to the lender(s). The lenders let everyone fight over their legitimate commission, fee etc.  However, to get the deal done, sometimes agents etc must reduce their fee as a practical matter bit not as a legal matter.

Paddy Deighan J.D. Ph.D

Permalink Reply by Team Musser on August 26, 2012 at 7:19am

No, they do not have that right, and you need to escalate. On a  cooperative short sale B of A will get involved. Have you checked if it is FNMA or Freddie? Recently thay have helped me a lot. Do not give up. Go back and ask for 7%. What I do is always start the transaction with 2 HUDs, one showing the 2nd get a lot, going to the1st, and one showing the 2nd with very little, going to the 2nd.

 

Permalink Reply by TOP END Properties on August 26, 2012 at 9:00pm

They could ask you to deliver them a golden egg if they wanted to.  The 2nd knows they are getting nothing so their negotiators are much more aggressive in order to limit their losses.  The answer to all their questions is NO.

"Company Policy, I cant and wont reduce my commission. Even if that means the 1st has to foreclose and you get ZERO" .. see what they think about that.

"No payments can be made outside HUD to pay off 2nd liens by the buyer.  The 1st will only allow _ dollars to the 2nd".  Period.

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on August 27, 2012 at 5:16am

1) Whatever the agreed upon commission is included in the Listing Agreement between the Listing Broker and the Seller.

2) There can be no Commission Terms included in the Purchase Agreement.

If the lender will not pay the Agreed-upon Commission rate, the Listing Broker has the right to collect it from the Seller per their Listing Agreement.

 

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