Replies to This Discussion

Permalink Reply by Kathleen Couch on October 3, 2011 at 5:15am

Yes, I have.  It is still an arm's length.  The father should disclose the relationship in the listing agreement.  They will be asked to sign the arm's length statement, like usual.

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Permalink Reply by Smitty on October 3, 2011 at 5:18am

I think to be safe someone else should list it.  I can't remember if I have an ASC arms length form.  You COULD be ok, but it's better to work on the side of caution.

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Permalink Reply by Cody Lampariello on October 5, 2011 at 3:35am

"Arms Length" has to do with relation to the seller. I can't find any reason why you would have any issues with this contract. If for odd some reason the bank negotiator makes an issue of it you should be able to push to a supervisor with a little more knowledge and have them OK it.

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Permalink Reply by Holly B. Long on October 5, 2011 at 4:05am

I have a CitiMortgage - where seller and sellers agent are brother/sister...I disclosed to Citi and they are allowing provided that sellers agent takes no commission, but another agent in his office can take commission but must provide a letter stating that "brother" will receive no part of commission and the other agent in his office must sign Arms Length Affidavit.  Of course, I am retaining all emails relative to this "approval" of the relationship from Citi and direction they have given, in case it becomes an issue later on.

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Permalink Reply by cesar llanes on October 5, 2011 at 5:13am

Base from my experience, it is "arms length". Best way, prepare a disclosure signed by eyerbody to protect you and everybody. Let ASC accept it if it is "arm length" on their definition.

Good luck!

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Permalink Reply by Kathy Lee on October 5, 2011 at 5:16am

I was recently involved with a short sale transaction where the buyer agent's client was his father.  It was disclosed in the contract that the buyer was related to the buyer agent.  The buyer and buyer's agent were not related to the seller.  The lender, GMAC, would not consider it an arms length transaction.  They would allow the sale but would not allow the buyer agent to receive compensation from the transaction.

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Permalink Reply by Kimberly Azzam on October 5, 2011 at 6:12am

Thank you Kathy Lee, this is exactly why I posted this. I heard this happening to another agent as well. I did explain this to the buyers agent and gave him the opportunity to have someone else rewrite the offer, but he declined and said it should be fine. So we will just have to wait and see what ASC says.

 

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Permalink Reply by Bryant Tutas on October 9, 2011 at 12:24am

Putting this in the newsletter today

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Permalink Reply by Lavina Samtani on October 9, 2011 at 1:51am

I just got a shortsale declined by Bank of America because buyer and buyer's were related. I called the negotiator and ask them why decline the short sale? Why not just offer less commission? She said no that is not possible.The buyer can hire another agent if they want and we can than reinitiate the short sale?

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Permalink Reply by Rodney Mason on October 9, 2011 at 3:47am

Any relationship between any party in the transaction must be disclosed.   An example of  a non-arms length transaction would be a son purchasing a home from his parents, employer, etc.  Any time a relationship crosses the lines between the buyer and the seller, it becomes non-arms length.  Non-arms length is also known as "identy of interest."

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Permalink Reply by Michael Kohler on October 9, 2011 at 4:32am

DIsclose Disclose Disclose......

You need to disclose to ASC the relationship to the buyers agent.

I would either disclose it in the arms length or draft an additional amendment stating the situation

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Permalink Reply by Jill P on October 9, 2011 at 6:04am

I would have my broker write up the offer and then it would not come up for questioning.  

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