Listing agents on BofA short sales must now certify they have no business relationship with the buyer. What exactly does that mean?

 

Bank of America is now requiring a new addendum be signed by buyers and sellers for all transactions initiated after April 4.


This new LMO 503 Short Sale Purchase Addendum  has a second page that must be signed by both listing and selling agents.

It prohibits one agent representing both sides of the transaction. 

It says  "Dual Representation" is not allowed.  It defines "dual representation" as "a single agent representing both the buyer and the seller in the transaction".

That much is clear.

 

But it also precludes a "Listing Realtor/Broker" from having any "existing business relationship with the buyer".

That is not at all clear.  For example:

 

Can a buyer's agent working for the listing agent's team represent the buyer?

Can an agent working for the same brokerage/principal broker (who actually is the legal listing broker) represent the buyer?

Can a listing agent refer (for a fraction of the selling side commission) a buyer to some other agent - even one working for some other brokerage - without running afoul of this prohibition against having a "business relationship" with the buyer?

 

These are legitimate questions with real life commission and license implications for agents and their principal brokers all over the country.

But no one (seemingly) at BofA can provide answers to these questions today.

Can any of the members of SSS?

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Permalink Reply by Jeff Payne on April 21, 2011 at 10:02am
got it, she told me she would look at it and give us an answer.... I hope she does too
Permalink Reply by Tni LeBlanc (805) 878-9879 on April 27, 2011 at 3:23am

I just received one of these forms AFTER approval with fully disclosed and accepted offer with me as the single agent.  I can't sign it so we will see what happens next.   Also, I just put another single agent deal into their system and this addendum was not provided up front. So where are people getting this info that this is required on every file after 4/4/11?

 

I do think NAR should be bringing this issue up to -- BofA has a large market share and we shouldn't each have to fight this issue on each individual file.  They are basically saying that this is a suspect busines practice.  Why?  Last I checked BofA doesn't have similar dual agent prohibition on their REOs.

 

They can really hurt a lot of independent brokers on this.  The banks just seem determined to ruin the real estate business.  Is this because they weren't allowed in it -- so now if they can't have it no one can?  Give me a break. 

Permalink Reply by Jim Hale on April 27, 2011 at 8:07am

Tri -

The statement that it is to apply to sales initiated after April 4 was mine....because that is what the BofA agent site said in its "news" item about the introduction of this new form.....indeed that is where I obtained the copy of the from that I attached to my original post.

Anybody know how to get NAR to look at this issue?

Permalink Reply by Tni LeBlanc (805) 878-9879 on April 27, 2011 at 8:40am

Hi Jim,

 

I left a message for someone at NAR about this.  I'll let the group know what I hear.

 

Tni

Permalink Reply by Kimberly S. Ruley on June 15, 2011 at 9:06am
We do have dual agency in PA, so it does matter to me. I look forward to their response.
Permalink Reply by Smitty on June 15, 2011 at 12:14pm

Tni,

Did you hear anything from NAR?  I don't see how BOA can supersede local law.  We can do dual agency in my state too.  I am happy to send the state info to BOA.

Permalink Reply by Tni LeBlanc (805) 878-9879 on June 15, 2011 at 12:27pm

Hi Smitty,

Yes I did.  Their position was they wanted to tread lightly about telling a private company how to run their business. 

(A private company bailed out with public money!).  I have been presented with that addendum on a recent file and simply refused to sign it.  They then tried to cut my commission to a ridiculous level, but they backed down on asserting that I couldn't do dual.  The commission fight isn't over yet though.

Tni

Permalink Reply by Wendy Rulnick on June 15, 2011 at 12:43pm
Hmmmm.  If you wrote the offer, you have an existing business relationship with the buyer.  I don't think they worded their form very well. 
Permalink Reply by Smitty on June 15, 2011 at 12:50pm
I just don't understand how they think they can regulate dual agency?  Honestly, I feel like a lender should look at the net and say yes or no...all the other semantics of the short sale can go away..  It's getting COMPLETELY ridiculous.

I agree with Wendy the form is crazy.  They need to define half of what they are trying to enact.
Permalink Reply by Smitty on June 21, 2011 at 9:37am
Hey all, I got a new addendum today and the "dual agent" part seems to have disappeared.  :)  The whole addendum needs to disappear.  It's full of discrepancies.
Permalink Reply by DoesntMatter on June 23, 2011 at 3:32pm

Jim, its to prevent against "non arms length" transactions. The bank wants to see the home was listed on MLS, and a buyer legitimately found the property, and is interested in buying the home. You will be surprised with some of the scams people try and pull these days.

 

One SS I recall had this "genius" of a co-borrower think that she could actually purchase the property from her husband, who was on the loan itself already, and was the primary borrower. Now this one is rather obvious, but there are real estate agencies who are more clever, and will attempt to mask relationships between buyer and seller by having the buyer listed as an LLC, have name changes every 3 months, etc. You will be SURPRISED at the detail researched in potential arms length transactions. Wer'e talking 5 pages reports of investigation sometimes. If you get the infamous "non-compliance" decline letter, chances are fraud is a huge risk on that file.

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