Nearly 9 out of 10 of my short sales, the lender cuts the commission from 6% to 5%. I am sick of this. They know they have us by the short hairs and do it automatically. Now I have GMAC being represented by IMPACT that wants to take 1% of my 6% commission. They want me to sign a new fee agreement and commission disbursement form. What can I do and how can this be stopped.
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"Company Policy, I can't and wont".. It's called negotiation ..
I have only have this happen once, out of well over 100 sales, and it was on a $700,000 listing. I usually list at 7%, offer 2.5%. Put in MLS that if 'lender is to reduce commission, difference is to be split 50-50'. I do get taken down to 6%, and I usually leave it alone. Twice, I had buyer's agent that didn't do their jobs, dropped the ball, and were awful to work with. I did their work for them, and brought them down to 2%. I call that 1/2% take down the "F-U" fee. Nothing they can do about it. I do not advacate burning agents, but if we have to do their work, so be it.
Summary is, give the lenders room to cut you down; if you double end it, work with someone else in your office, your broker ought to be able to help you out and sign the offer.
They will never approve 7%.. I wouldn't waste the time.
I realize this is an old posting but just say "NO". Remind them you have a Listing Agreement showing "X%" and that's what you plan to receive at closing. To add a comment regarding Jennie Blackburn's comments, if I received a "Referral Agreement" providing 1% of my commission to a 4th party, I would also say NO.
Keep good notes, record the telephone calls according to your state laws.
Investors with Flippers are doing the same thing. It's just common practice now that they give 5%. Standard sells are doing it too.
I see someone reccomended reporting it to the OCC. If the offending bank is a member of the Nation Association, the bank will have NA ater its name, then you can report it to the OCC. The OCC only regulates National Association Banks. Once you report a bank for cutting your commission, and they restore your six percent commission, you will be placed on a list where banks will no longer cut your commission.
Under California Tort Law, it is illegal for an outside, third party, to interfer with a legally binding contract between two parties. I always put that in the complaint to the OCC.
I am on the buyer's side and AHMSI Servicing sent the approval letter which included language saying the brokerage commission will not exceed 5% (blank filled in). It's a rotten deal...what are we supposed to do, say No? They realize how easy it to pick on us--it's like taking candy from a baby. Additionally, they are charging my buyer a $600 "servicing fee". They are no better than pickpockets.
Are you handling your own negotiations, or are they being handled by an attorney? I kept having the same experience until I began negotiating my own short sales and preparing all preliminary HUD1s until just prior to closing, at which point I hand everything over to the attorney/closing agent. Perhaps it's just pure coincidence... but ever since I began handling my own files exclusively (past 2 years), I have NEVER had a single cut in my commission -- 6 percent (or more!) in every short sale.
ING is now stating they will not pay more than 4% total....... AND, it is required the transaction is closed using their selected Escrow and Title Companies.
ING can pound sand if they're not going to pay my standard fee (I'm doing twice the work of a standard sale).
P.S. You should never send in a file double-ended... get another agent in your office on the other side.
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