Replies to This Discussion

Permalink Reply by Andrew on September 20, 2010 at 7:08am

Not that this helps, but you should have known that going in. The 1st will never let the seller contribute to the 2nd.

Either ask the buyer to pay it, or the agents split it or you pay it yourself. $2,000 is a minor inconveniance to get the deal done. Pay the 2k and move on to the next deal.

Permalink Reply by Bryant Tutas on September 20, 2010 at 7:24am

Becky. Have the title company place the $2,000 as a POC item on the seller side of the HUD. The seller CAN pay towards the 2nd. It's all about the presentation. The seller can just bring certified funds to the table made out to Chase.

Permalink Reply by Bryant Tutas on September 20, 2010 at 7:28am

Andrew. That's not true at all. I have had sellers contribute to the 2nd on many occasions. It has never been an issue. As for contributing $2,000 out of the commission and moving on to the next deal that is all well and good assuming there is $2,000 in the commission. I work on short sales all the time that are less than $60,000. Hard to contribute $2,000 towards a closing when the listing side commission is only $1,800.

The solution to Becky issue is for the seller to pay the $2,00o as they have already agreed to do. Whoever from Chase said the seller couldn't pay is wrong. This is nothing more than a communication problem.

Andrew said:

Not that this helps, but you should have known that going in. The 1st will never let the seller contribute to the 2nd.

Either ask the buyer to pay it, or the agents split it or you pay it yourself. $2,000 is a minor inconveniance to get the deal done. Pay the 2k and move on to the next deal.

Permalink Reply by Andrew on September 20, 2010 at 7:31am

Bryant,

How is it different is the seller pays POC or if they pay "normal"? The 1st will still know they're paying and still won't allow it. (in my opinion). If it was as easy as going POC, we would do it all the time and there would be no issues with seller contributions.

What am I missing?

Permalink Reply by Alan Remigio on September 20, 2010 at 8:05am

Becky,

Bryant is right about the presentation. More importantly, in the future, you need, as part of your team, a title company/attorney who is very experienced in closing short sales, other than very vanilla situations. I am assuming that when the 1st received the final HUD for approval, they saw the discrepancy because it was a line item not found on the previous HUD or part of the negotiations leading to the approval letter.

I also believe that because they saw it on the final HUD and did not address it on the approval letter, it was not discussed and cleared. POC items are normally the answer. Believe it or not it is not a part of the HUD/closing, as its name implies. However, for the sake of transparency, we note it on the HUD and close.

This is where an experienced title company/attorney makes the difference when presenting the final HUD to the 1st, to avoid a problem like yours. Follow Bryant's suggestion and resubmit the HUD.

Permalink Reply by Sherrilee Denton on September 20, 2010 at 5:51pm

Thanks for another great response Bryant! Your right, Sellers are allowed to contribute to the 2nd. In one of my recent transactions the seller was allowed to bring in money towards the 2nds payoff (dealing w/ 2 different lenders too). I'm always surprised when agents are so ready to give away their commission or to suggest to another agent to do so. Our commission should not be part of the equation. I feel that lenders are just expecting us to cave and contribute because so many agents do exactly that and don't fight for what they're worth. We all work hard for our commissions and we should not be willing to walk away from $2,000 or any amount of money that we've contractually earned.

Bryant Tutas said:

Andrew. That's not true at all. I have had sellers contribute to the 2nd on many occasions. It has never been an issue. As for contributing $2,000 out of the commission and moving on to the next deal that is all well and good assuming there is $2,000 in the commission. I work on short sales all the time that are less than $60,000. Hard to contribute $2,000 towards a closing when the listing side commission is only $1,800.

The solution to Becky issue is for the seller to pay the $2,00o as they have already agreed to do. Whoever from Chase said the seller couldn't pay is wrong. This is nothing more than a communication problem.

Andrew said:

Not that this helps, but you should have known that going in. The 1st will never let the seller contribute to the 2nd.

Either ask the buyer to pay it, or the agents split it or you pay it yourself. $2,000 is a minor inconveniance to get the deal done. Pay the 2k and move on to the next deal.

Permalink Reply by Andrew on September 20, 2010 at 6:31pm

I'm always open to learning how to do short sales "better". Was your seller able to bring in all the money and put it on the HUD for the 2nd? I just haven't seen the case where that's happened, but I do know that banks are different, and every situation is different and I don't know it all.

As far as commissions go, I usually have the buyer bring in the money for the 2nd if possible. My only point is I'm not going to lose a deal and put the home back on the market and start all over again, over $2,000. But my market is different and I guess if as Bryant said he was doing and selling homes for 60K, then I would feel different. But in my 600-900K market, if I can kick in 2k and make my problems go away, I'll do it all day long. It's about volume and sanity.

Andrew

Sherrilee Denton said:

Thanks for another great response Bryant! Your right, Sellers are allowed to contribute to the 2nd. In one of my recent transactions the seller was allowed to bring in money towards the 2nds payoff (dealing w/ 2 different lenders too). I'm always surprised when agents are so ready to give away their commission or to suggest to another agent to do so. Our commission should not be part of the equation. I feel that lenders are just expecting us to cave and contribute because so many agents do exactly that and don't fight for what they're worth. We all work hard for our commissions and we should not be willing to walk away from $2,000 or any amount of money that we've contractually earned.

Bryant Tutas said:

Andrew. That's not true at all. I have had sellers contribute to the 2nd on many occasions. It has never been an issue. As for contributing $2,000 out of the commission and moving on to the next deal that is all well and good assuming there is $2,000 in the commission. I work on short sales all the time that are less than $60,000. Hard to contribute $2,000 towards a closing when the listing side commission is only $1,800.

The solution to Becky issue is for the seller to pay the $2,00o as they have already agreed to do. Whoever from Chase said the seller couldn't pay is wrong. This is nothing more than a communication problem.

Andrew said:

Not that this helps, but you should have known that going in. The 1st will never let the seller contribute to the 2nd.

Either ask the buyer to pay it, or the agents split it or you pay it yourself. $2,000 is a minor inconveniance to get the deal done. Pay the 2k and move on to the next deal.

Permalink Reply by Sherrilee Denton on September 20, 2010 at 7:33pm

For example, in a recent transaction, the Seller was allowed to bring in money to payoff the 2nd, (Wells Fargo). The seller's contribution was approved by the 1st, (Saxon) and it was stated on the HUD. Throughout the transaction both lenders did go after my commission several times. The 1st would only approve 6% and the 2nd said they could only allow 4% so I would therefore be required to CONTRIBUTE 2% to them. Nice try . . . but that "didn;t work for me." I was able to negotiate the 1st to up their payoff to the 2nd and the Seller was able to come in with a token amount to add to their payoff as well. The 2nd was happy to get what they wanted and all of a sudden my commission % was a non issue. Mind you this after 2 buyers walked and I was able to get another in place and get the deal done.

Even with all that, I had to deal with the buyer's agent asking for a portion of my commission at the end. Sorry I won't give a buyer's agent more, but I will always honor what I state in the MLS and I will never ask you to reduce your commission to help me get the deal done. In the end, if I earned more, it's because I negotiated and fought for it, even through multiple buyers and months of keeping the file going.

Like many, I always try to minimize any contribution my seller may be required to make and always try to have the buyer's contribute. As was mentioned maybe if our deals were larger and more volume ,$2K of commission contribution wouldn't seem like much, but were struggling just like everyone else and I'm not in a position to let my money flow to the banks. I value all the information that is shared on this sight and appreciate everyone's contribution and difference of opinion :) Keep up the good work!


Andrew said:

I'm always open to learning how to do short sales "better". Was your seller able to bring in all the money and put it on the HUD for the 2nd? I just haven't seen the case where that's happened, but I do know that banks are different, and every situation is different and I don't know it all.

As far as commissions go, I usually have the buyer bring in the money for the 2nd if possible. My only point is I'm not going to lose a deal and put the home back on the market and start all over again, over $2,000. But my market is different and I guess if as Bryant said he was doing and selling homes for 60K, then I would feel different. But in my 600-900K market, if I can kick in 2k and make my problems go away, I'll do it all day long. It's about volume and sanity.

Andrew

Sherrilee Denton said:

Thanks for another great response Bryant! Your right, Sellers are allowed to contribute to the 2nd. In one of my recent transactions the seller was allowed to bring in money towards the 2nds payoff (dealing w/ 2 different lenders too). I'm always surprised when agents are so ready to give away their commission or to suggest to another agent to do so. Our commission should not be part of the equation. I feel that lenders are just expecting us to cave and contribute because so many agents do exactly that and don't fight for what they're worth. We all work hard for our commissions and we should not be willing to walk away from $2,000 or any amount of money that we've contractually earned.

Bryant Tutas said:

Andrew. That's not true at all. I have had sellers contribute to the 2nd on many occasions. It has never been an issue. As for contributing $2,000 out of the commission and moving on to the next deal that is all well and good assuming there is $2,000 in the commission. I work on short sales all the time that are less than $60,000. Hard to contribute $2,000 towards a closing when the listing side commission is only $1,800.

The solution to Becky issue is for the seller to pay the $2,00o as they have already agreed to do. Whoever from Chase said the seller couldn't pay is wrong. This is nothing more than a communication problem.

Andrew said:

Not that this helps, but you should have known that going in. The 1st will never let the seller contribute to the 2nd.

Either ask the buyer to pay it, or the agents split it or you pay it yourself. $2,000 is a minor inconveniance to get the deal done. Pay the 2k and move on to the next deal.

Permalink Reply by Bryant Tutas on September 21, 2010 at 12:39am

Andrew. We're not trying to hide it from the lender. When the lender states "the seller can't pay it" they almost always mean "from the proceeds of the sale." It's a communication issue. When this happens don't even argue with them. Just prepare a new HUD and place the payment on the seller side as POC and then submit. It will get approved.

Even when the first is an FHA they will let this go through.

Andrew said:

Bryant,

How is it different is the seller pays POC or if they pay "normal"? The 1st will still know they're paying and still won't allow it. (in my opinion). If it was as easy as going POC, we would do it all the time and there would be no issues with seller contributions.

What am I missing?

Permalink Reply by Andrew on September 21, 2010 at 3:33am

Thank you. I will try this next time I have that situation. On all of my deals so far, there obviously is no proceeds from the sale, thus when they've told me that the seller can't pay, I always have gone right to the buyer. Also, most sellers don't have any money to pay, or don't want to because they're losing their house anyway, whether it's short sale or foreclosure, many don't care. Especially if they have to bring in money to close.

Bryant Tutas said:

Andrew. We're not trying to hide it from the lender. When the lender states "the seller can't pay it" they almost always mean "from the proceeds of the sale." It's a communication issue. When this happens don't even argue with them. Just prepare a new HUD and place the payment on the seller side as POC and then submit. It will get approved.

Even when the first is an FHA they will let this go through.

Andrew said:

Bryant,

How is it different is the seller pays POC or if they pay "normal"? The 1st will still know they're paying and still won't allow it. (in my opinion). If it was as easy as going POC, we would do it all the time and there would be no issues with seller contributions.

What am I missing?

Permalink Reply by Becky Lane on September 22, 2010 at 5:44am

Thank you all for your input. Bryant, I resent the HUD to Chase with the $2,000 on page two as POC and it was approved this morning!! Because of RESPA guidelines, the title company cannot transfer the funds to the 2nd lien holder. So the seller paid directly to 2nd and we are closing Monday. Thanks again.

Permalink Reply by Bryant Tutas on September 22, 2010 at 8:33am

You just have to love it when that happens!! That' what this site is all about. Helping each other close short sales. Well done.

Becky Lane said:

Thank you all for your input. Bryant, I resent the HUD to Chase with the $2,000 on page two as POC and it was approved this morning!! Because of RESPA guidelines, the title company cannot transfer the funds to the 2nd lien holder. So the seller paid directly to 2nd and we are closing Monday. Thanks again.