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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You can see the language of the required addendum at the attachments to this post.

Please send this to NAR.

 

Gee I won't be signing that.

Tni -

Only if you (we) want to get a short sale approved by BofA that you initiate after April 4.

 

I have one now that I'm doing dual on.  I guess I'll be seeing this form and I won't be signing it. 

 

We'll see what happens.  NAR should be made aware of this though.  Have you sent it over there?

 

So BofA is going to do what the legislature hasn't?  Give me a break. 

 

This is getting ridiculous.

Tni

 

Theoretically, files initiated prior to April 4 should not be affected.

Theoretically.

Yes, but I have one after that date as well where I'm dual.  The date doesn't matter to me. 

 

The attempt on their part to make me sign such a document or to impose such restrictions is what I have a problem with.

Hang tight on this one, I am working on an official response from Bank of America on it.   I could easily sign this document in regards to dual agency, I work as a transaction broker in Florida and not a Dual Agent.......  

Jeff -

 The concern is not just item 8 that mentions no dual representation.  I get that. 


Item 8 appears to prohibit anything....including referrals fees, team buyers agents or even brokerage buyers agents.


Jeff Payne said:

Hang tight on this one, I am working on an official response from Bank of America on it.   I could easily sign this document in regards to dual agency, I work as a transaction broker in Florida and not a Dual Agent.......  

I understand Jim, I hope to have an "official" response soon.  I really don't think that we have anything to worry about on this addendum but understand the concerns.    I interpret item 8 as one agent can not represent both parties in a dual agency situation.  In Florida we do not act as dual agents so this paragraph to me does not mean much.  Not sure of other states


8. Brokers’ acknowledge and agree that there are no Dual Representation. Dual Representation is defined as a single

agent representing both the Buyer and the Seller in the transaction giving rise to the underlying Purchase Contract.

Jeff -

My concern is not so much 8 as it is 7:

 

7. Brokers’ acknowledge and agree that they have disclosed to Bank of America any relationship to the buyer or
ownership interest in the buyer’s company, or represents that Listing Realtor/Broker has no existing business
relationship with buyer.

Jeff Payne said:

I understand Jim, I hope to have an "official" response soon.  I really don't think that we have anything to worry about on this addendum but understand the concerns.    I interpret item 8 as one agent can not represent both parties in a dual agency situation.  In Florida we do not act as dual agents so this paragraph to me does not mean much.  Not sure of other states



8. Brokers’ acknowledge and agree that there are no Dual Representation. Dual Representation is defined as a single

agent representing both the Buyer and the Seller in the transaction giving rise to the underlying Purchase Contract.

I added that to my question list for BofA....

Jeff -

The three questions I asked in the post seem relevant to me because in my market, a huge fraction of short sales are listed by a small number of real estate teams.  Of those, many (a significant proportion) are sold by those teams...often in the name of the listing agent.

 

In item 8, BofA is fairly clearly calling for two agents, not one being involved in any short sale.

But in item 7, BofA is raising many questions about what practices they will allow.

 

We all deserve to know up front, not when part way through a given deal.

So I hope they answer you.

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