Bank of America OKs You Reducing Your Commission
Here is the latest bulletin from Bank of America on how you will be paid as an agent on a short sale. https://agentresources.bankofamerica.com/ss_news_12DEC04
I find it fascinating that the bulletin states: "the real estate agent may choose to reduce his/her commission to meet minimum mitigation requirements" but does not mention any other party may "choose" to reduce their earnings.
Why don't we list others who may choose to reduce their paychecks to meet a third party's mitigation requirements? Here are some examples of others who might reduce their fees in order to facilitate the short sale:
1. The Title Agent could reduce their fee
2. The applicable State could be kindly and reduce doc stamps or transfer fees or pro-rated taxes (surely the seller's State would try to assist in meeting the investor net to help out)
3. The Bank of America negotiator (might want to help with the sale, they can take a lower salary for the week)
4. Others?
It's interesting that other entities and professions are not called out, but the real estate profession's fee is expendable.
Oh, yes, as a reminder, if you sell your listing yourself, your fee may be cut by 1/3. POOF! (Who takes listings like that on the "open" market anymore? If I sell it myself I'll cut to "x".) In that case, it would make sense to never sell your own Bank of America short sale. Your work unit would be less efficient if you did (i.e. profitability in terms of use of time) than if you referred out the buyer to another agent.
The rest of the bulletin is interesting in that it describes which type of transactions will be declined (e.g. if an agent is the seller).
Just my opinion.
Replies to This Discussion
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Permalink Reply by Lisa Woolverton on
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This is my soapbox! "Interesting" is the polite word for it. I am frustrated and astounded that our paycheck comes into play on a transaction between 2 other parties. I lose so much money contributing to other people's home purchases. I have been wanting to sell and purchase a new home, but I can't because my pockets are being picked by the banks.
But here is what I do now: As soon as my commission comes into play, I say NO and I mean it. It has been rough a few times, but after you get beat up so many times, a person has to take a stand.
Also, never write up your own listing. Many agents I know charge a referral fee of 90% to have another agent write it up, and they will reciprocate with the same terms when the other agent has a short sale listing.
Banks are making record profits and are taking our hard-earned paychecks. When will we do something about it?
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Permalink Reply by Wendy Rulnick on
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Lisa - You are very succinct. I agree with your statement: "I am frustrated and astounded that our paycheck comes into play on a transaction between 2 other parties"
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Permalink Reply by Dean E Eshelman, CPA, CDPE, IRES on
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Did you forward this to NAR? Dual agency in our state(Missouri) includes any of our offices. So even if someone in another of our offices sells my BofA listing they are cutting to 2%.
If BofA wants to be a party to the listing and selling contract and adhere to the time lines and legal consequences of not closing on time, then we can talk. BofA is NOT a party to the listing and can NOT interfere with that contract between buyer and seller. What do you say?
Give me a reason why I should even consider taking another listing that has BofA involved!
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Dean - You could ask your seller to pay you the remainder, you can refuse to participate. I agree, they are not a party to the contract.
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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Wendy - I'm just as frustrated as you are on this one .... I have had the Title Company reduce their fee and although they don't like it and shouldn't have to do it they would sometime rather reduce than the business be taken elsewhere.
That said, what about the Loan Officer / Loan Processor / Underwriter who originally closed the loan being shorted - maybe they need to give back part of the commission they earned. What about the Exec at BofA who was responsible for the business unit who made the loan?
I HAVE actually told the BofA person on the phone instructing where the reductions are to come from that THEY need to give 30% of their paycheck to the cause.....
Also, when BofA is instructing how a deal is to be restructured, they need to have an RE license in that State correct? I've asked for Broker License #'s when they say things like - "move such-and-such charge from the Seller to the Buyer" - I respond with What's your CA Broker's License # and who's your E&O Carrier?
The good news about CA is the investor has only two choices: 1) approve the Short Sale and (by CA Law) there's no deficiency or Promissory Notes; or 2) Decline it. There's no other choice really........
Good luck and hang in there - I think the days of Short Sales are coming to an end very soon...
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Thom - Your points are very well taken! Add them to my list.
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Permalink Reply by joe beauchamp on
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BofA is at the top of the "greater fool theory" promoted by the sort of people who put the world economy into this mess - the FNMA's skipping appraisal on REO so that you will pay way more than market value. Well, here is BofA's mental legitimizing whatever they want to push. I'm sure a lot of new agents will read this and say, OK, that is all I should expect. And BofA wins - Why should BofA pay anyone but themselves for anything? Is it really twice as easy to find a seller and a buyer than if you have 2 agents doing this? Yeah, right. They just make this stuff up and say it over and over. They succeed at least to some extent, with the people who believe banks are honest and ethical and the rest of us get at least a little of the brainwashing - can't help but from time to time say to yourself, "well, I guess they are right" - no one is objecting, etc.
Frankly, bankers love money so much, they should be doing their jobs for free - they shouldn't charge interest on mortgages. And why should they be paid for properties that aren't paying their mortgages? They aren't collecting, right? HA. You just have to love how sociopaths get away with these assaults. Not a problem sleeping at night..
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Permalink Reply by TOP END Properties on
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I seen that.. nice of them to put it out there as an allowable guideline.
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