Question: I submitted an offer on a short sale which took 2 months for approval and were schedule to close, however, a day before closing the listing agent decides to lower my commission because according to her our office does not pay what she pays, she did not tell me this when the offer was made or accepted and the commission is advertised with the higher commission split, the agent's broker and her have said that they will cancel/postpone the closing and will only close it if I take less of a commission. The buyer, seller and seller's lender are ready to close. I will not take less because I find it unethical and I believe they have no right to cancel a closing. What are your thoughts?

 

Thank you

 

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Many things are wrong with this situation.  

First, to address another point made here; Lenders have no authority to "Cap" your commission. If payment of services to all third parties of the contract does not meet the investors "Net" guidelines then the agents can either find someone that will take less or someone that will pay more or reduce their commissions in the best interest of the transaction, but the lender has absolutely no authority to change the terms of the seller's listing agreement, nor does the listing agent have the authority to change the offered amount in the MLS once a buyers offer has been submitted and accepted. Despite the so called disclaimers in the MLS. So then it would be prudent business for the listing agent to either offer a lower amount just in case or get savvy at negotiating payoffs to keep their offerings intact. Whatever the objective any and all fees are negotiable. 

To the matter at hand, Bryant is correct, I would not hold up the closing due to a commission dispute since it is in the party(s) to the contract best interest to complete the sale and to do otherwise would land you in front of the real estate commission and/or civil court for damages. Once closed, and even before then, get your broker involved because the one thing that holds true in almost every state that I'm aware of is the commission belongs to the broker not the agent. So don't say or do anything that could be interpreted as you acting as the broker (unless of course you are the broker). This is just a sure way to land you in front of the real estate commission in your state.

The main concern though isn't that they want to change the commission, it's the reason they stated why it would be with held as offered. That is, and without reservation I say this, an anti-trust issue. Charge what you believe is fair and I can do the same, to try and coerce another to "play ball" is collusion. I refuse to participate in those activities, I always do what's best for the client, not myself, as evidenced at my sticking with a $46,000 condo short sale since August.

With that said, discussion of commission fee levels should be avoided any further in this forum for all parties involved and now involved in this discussion. Don't get baited into these types of discussions, as far as you know this person is with the FTC trying to get a discussion going. I noticed a similar type of discussion of Activerain as well. Be very careful how you answer these things.

As a note to the editor: If this were my site and I was a licensed agent/broker I'd delete every post that has a named percentage or dollar amount as a commission to be paid or offered to be paid or as a split. 

Read the above paragraph as to why this would be prudent.

Thank you and to each of your successes in 2012 and beyond,

MORE Realty Services LLC

3001 Aloma Ave

Winter Park, Florida 32792

(407) 462-4992

www.MoreRealtyServices.com

Donald E. Johnson

Licensed Real Estate Broker

"Because You Deserve MORE Realty Services!"

* This signature is not an offer of solicitation of services by the broker.

If you would like to share the MFR MLS number then I would be happy to research it for you.  But can your own broker not help you ?

Tavo

I believe, if you speak to your broker in charge and the legal department of your State Board you will find they cannot change that once they committed to the contract.  It is definitely unethical, and the contract is between the seller and the buyer and the agent cannot change anything on the contract.  I had it done to me and as a short sale did not want to take the chance of not closing.  I could have brought the agent in front of the board, as long as it was within 90 days of the closing date.  For $450 it was not worth the hassle, although that was not the point, I just did not go that route.   But I'm very careful now, especially with all of the listings I read for my buyer agents.  Best of luck Susan

Hey Brian. So many issues here. If you have the MLS sheet from the day you had a contract, that is your agreement for the commission splits. Neither the agent or broker can change that, commissions are contracted at that point and unless you have some other agreement. That should hold. Talk to your local board and see what they advise.

It's called a bluff. 

Call them on it.

 

Hi Tavo,

 

I sure hope you printed out a copy of teh listing from MLS the day you made the offer to show your board. I always make a copy for my file just for this reason. The other people are being bad but be the better agent. Escrow the commission and file a formal complaint at the board then go through the process. We have a responsibilty to our clients.Hope you will prevail!!!

I go with Bryant - I have represented agents with this issue before local real estate boards and the buyer's agent wins everytime.

What if the commission is reduced to ZERO or $50? 

 

Are you obligated to participate if you are not being paid at all?

Phil. Another reason why buyers agents need to have an agreement with their buyers guaranteeing them a minimum commission. I am clueless as to why buyer's agent still don't know how to get paid. Boggles my mind.

To answer your question. If you agreed to let the co-broke be reduced, based on what the lenders is willing to pay out of the proceeds of the sale then, yes, you are obligated to accept ZERO if that's what the lender agrees to pay.

Foolish wouldn't you say? 

If you truly want to learn how to get paid then I have written numerous articles that will help. CHECK IT OUT

The MLS is not an advertising platform, it is an agreement between brokers to offer compensation to other brokers for selling a brokers listings. Most MLS's have rules in place for short sales that require a listing agent to state how commission will be split in case the bank reduces commission in a short sale situation. In our area, I would say that all of the brokers split 50/50 if there is any reduction. I always print out a copy of the MLS display whenever making an offer and place a copy in the file, just in case something like this ever happens. The original co-broke amount that was displayed on the date you brought a ready willing and able buyer WILL be the commission your broker is due. You would simply have to bring the dispute before your MLS board or committee and they would have no choice but to side with you on this. Of course you would still have to bring your buyer to the closing table first.

She can't lower the commission now.  You are due what was represented in the MLS listing.  Send your commission demand into escrow for the full amount as advertised in the MLS listing.  Let the closing occur, you can work out the commission later.

Here in Arizona you can file a commission dispute at title at closing. So close on the file then file dispute. May have to go to arbitration but our MLS is very strict with rules that you pay what is posted in MLS UNLESS otherwise disclosed prior to buyers agent presenting offer to listing agent. Neither agent can hold up a closing based on commission. At the very least, even if you do get your full commission owed at closing, I would file an ethics complaint on the listing agent. They need to learn their lesson on how to serve ethically. Maybe some mandatory training or a fine will be a good lesson for this agent.

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