Commission Negotiations
Lately I noticed that all Lenders are trying their hardest to cut a big chunk of our commission. Particularly when working on over a million dollar listings.
We usually fight to the end, and most of the times we won our 6% but for the past few months it became very hard if not impossible and we had to accept 5% and even 4.5% on some transactions.
Can anyone share a success story about winning the negotiation and getting the full 6% commission? Besides I would love to hear the tricks you use when fighting for the commission.
Replies to This Discussion
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Permalink Reply by Juan Reyes on
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if it is a Fannie or Freddie owned loan they can not change the commission from what is agreed to in the listing agreement.
of the past 10 SS I've closed only 1 reduced the commission to 5% everyone else paid 6%.
One thing I do is that I write 6% on the listing agreement, and submit a HUD with 6% on it. I advertise the listing on MLS with a 2.5% in case they do reduce it and write in the remarks that final commission will be split 50/50 whether its higher or lower.
if you are dealing with million dollar short sales that's a different story since these loan were conventional non-conforming loans and the investors don't play by the same rules as Fannie/ Freddie.a million dollar short sale I wouldn't care if they paid 5 or 6% I'd rather earn a $25K commission than $0.
Not only that but if a seller was able to afford a Million dollar home and is not paying the mortgage, they should be able to afford to pay the difference in commission or at least part of the difference, don't you think?
Don't be afraid to write into the List agreement that they will pay the difference in commission if lender approves less than 6% and they can just bring a cashiers check to settlement made out to the broker. -
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Permalink Reply by Kate Fomina on
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Juan,
Positive answer, only when you have been working on a deal since 2008 you deserve all 6% if not more. I guess we can go with 5%, but these people keep pushing and pushing and just gave us a 4.5% approval without even asking us. I just want to know where the limit is. As they can eventually leave you with 2 or 3%..... -
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No argument from me on that. We work way too hard on these short sales and deserve more than 6%
Don't know if you read my edited reply but here it is again.
if a seller was able to afford a Million dollar home and is not paying the mortgage, they should be able to afford to pay the difference in commission or at least part of the difference, don't you think?
Don't be afraid to write into the List agreement that they will pay part of or the entire difference in commission if the lender approves less than 6% and they can just bring a cashiers check to settlement made out to the broker.
One thing I will never do however is to keep 3.5% for my self and 2.5% for the buyers agent. I had that happen to me and guess what I will avoid showing any of that agent's listings at all costs. On the buyer end we work just as hard keeping a buyer motivated to not walk away from a SS contract.
Kate Fomina said:Juan,
Positive answer, only when you have been working on a deal since 2008 you deserve all 6% if not more. I guess we can go with 5%, but these people keep pushing and pushing and just gave us a 4.5% approval without even asking us. I just want to know where the limit is. As they can eventually leave you with 2 or 3%..... -
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Permalink Reply by Kent Dills on
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Just won a commission negotiation with OCWEN. They started at wanting 4% (and this wasn't a double-sided deal either). I just used the old third party won't let me excuse. Blamed my broker (I've got my own broker license) for not letting me "renegotiate the commission already specified in the executed Listing Agreement as it's a RESPA violation". Now I know it's not a RESPA violation but a violation of some contract law that I'm not familiar enough with to cite; but, this worked for me. Got the Approval Letter from OCWEN today at the full 6%! Rock on folks!
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Permalink Reply by Linda Baron on
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You rock Ken! Congrats on getting the full 6%. I too have my brokers license but always ...blame the 3rd party broker! It cuts down on the discussion of reduction of commissions.
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Kent,
Congrats on 6%! I am sure you deserved it!
Unfortunately big banks like IndyMac or BofA already know about This RESPA violation thing it and are not afraid anymore.... -
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Permalink Reply by Karyl Moore on
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Lately I've been writing the listing at 7% and most of the banks have reduced it to 6% - no problem with me. Haven't ever received the 7%, BTW.
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