Arms length question with Wells Fargo: buyer agent can't get a commission because his mom is buying?

I've looked at other questions, but didn't see any with this unique setup:

I have home listed as a short sale.  I am not related to seller.

Buyer agent is related to the buyer(buyer is his mother).  We get all the way up to approval of short sale, Wells Fargo comes back and says that buyer agent can't receive a commission, because he is related to the buyer.  Buyer and seller ARE NOT RELATED.  

Can buyer agent receive his commission?  He is hot after I told him this.  Now he wants to resubmit transaction with his broker as the buyer agent and not him, legal to do?

Thanks!

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Lenders have a very interesting way of saying what is and is not an arms-length transaction. Basically they have decided that is any of the parties involved in the transaction are related to each other then sirens and red lights go off.  Rather than stir up an ants nest and risk losing the transaction, why not circumvent the issue for the benefit of the buyer and seller. Just create a private agreement between the listing agent and the buyer's agent to have the listing agent pay the buyer's agent his share of the commission after the completion of the sale. Bank happy, buyer happy, seller happy, buyer's agent happy.

Wells Fargo is lien holder, I don't know who investor is.

Simon, I take approx. 60% of commission payable on each of short sales, because of the extra work I do.  When Wells Fargo removes buyer agent on his commission, they not only remove his portion of commission payable but they also reduce me down to 50% of total commission that was originally payable.  I'm not giving away half of my side of the transaction....

I just got this reply from my negotiator at Wells Fargo.  Looks like they are going to pay this commission after all!

Criag, I just got notice that we can pay the commissions while I was  out sick hud had informed us as long it is not the seller side that are related we can pay the buyer agent the commissions

Im currenlty going through the same scenario with WF. Im purchasing a home and my father is a broker for RE/MAX acting as my purchasing agent. We have no relation with seller or sellers agent, but WF is denying my father his half of the commission in the purchase? They are only wanting to pay the listing agent half of the commission and keep the amount due to my father. We are currently fighting the stiuation and sent letters to WF stating no commission will be going towards the purchase price of the home and also had my lender send a letter stating im being loaned the full purchase price. Waiting to hear back, anything you can suggest or comment on with your experience to get my father/agent his commission as he deserves? Thanks!
I have not found anything in "Arms Length" that mentions any familal relations is frowned upon other than buyer and seller. The only case it argues that the home may not bring fair market value when there is a relationship between purchaser and seller. We cannot alter or influence selling price in an illegal manner when there is no relation on the selling end.Sellers are wanting all they can get, and im wanting it as cheap as I can. We have sent a diclosure to WF stating no commission will be used in the purchase of the home and have had my lender send a disclousre saying I have full purchase price being lended as well. Hopefully this helps.

Buddy, I wish you the best of luck, but don't count on it.  Not only relationships between buyer and seller are excluded, but as far as commissions go-no buyer or seller can collect a RE commission period, and they have pretty much extended that to any family member of any buyer/seller.  Notice I did not say that fairness or common sense enters into this equation anywhere, just it is what it is.

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