Replies to This Discussion

Permalink Reply by AMY GERRISH on November 16, 2010 at 4:31pm

My partner listed one for her brother in law. BofA said they wouldn't pay her. So she referred the listing to me. The listing is 100% mine, her name is not on it anywhere. I will pay her a 50% referral. (that's our usual split) It's closing on Dec. 1st. I had to send them a whole new listing agreement etc....she still did most of the communication work with the seller, I just dealt with BofA mainly.

Permalink Reply by Steve Early on November 30, 2010 at 11:55am

Hi Cami:

It is quite common for servicers to deny commission payments to Realtors who are related to the buyer or seller - usually because those are the guidelines established by the investor. You are correct to disclose, but overall it probably isn't a good idea to do the transaction at all if there is a familial relationship.

Beyond commission payments, your entire short sale transaction can be relegated to the "DENIED" pile if an Arm's Length Affidavit has to be signed. We had a situation within the past week where the buyer's agent and the buyer (both Realtors) were married ... to each other. They had allegedly bought 3-4 other short sale properties within the past 12-18 months with her acting as the agent and him acting as the buyer. However, none of those other transactions were with investors who required an Arm's Length Affidavit. This one did. Even though they fully disclosed their relationship, and the short sale made it all the way to almost closing, the ALA did them in.

The short sale was placed on hold, and we were informed that the buyer had to be replaced. They could not swap the buyer's agent out for another agent. The buyer had to go. So you need to be careful getting involved in transactions where you are related to either side in my view. It's probably better to have an associate work the deal on your behalf.

Permalink Reply by Wendy Rulnick on November 30, 2010 at 12:40pm

I'd be safe and refer this out, unless you want to do it for free :)