Why should I get paid less! I find short sales stick more if I control both sides and can gauge and encourage the interest level of buyers. It also allows me to avoid agents that help their clients enter into multiple transactions telling them they can back out before bank approval. AND the work is 10 times more than a standard sale.

I'm dealing with BOA on a former Countrywide loan. So far they won't disclose the investor. This is an Equator transaction but I'm finding negotiators are more involved now and call and discuss everything including disputing the 6% commission before ordering the appraisal. They 'will pay' 4% saying they NEVER make exceptions.

Are any of you 'the exception'? Know anyone that has recently gotten 6% representing both sides? Help please.

Views: 2200

Replies to This Discussion

BJ -

 

First let me say we do not double-end any transactions in our brokerage so we do not have this issue.  That said, I negotiate lots of transactions for other Brokers / Agents as a 3rd Party Negotiator and I have never seen commissions cut by BofA even when the same agent / broker is on both sides. 

 

I think this is an Investor issue, not a BofA issue.

Thom, I'm doing an FHA PFS now and was a dual agent. They have told me they do not accept dual agency. I looked up the FHA PFS guidelines and they don't mention anything about not allowing dual agency. I posted here about it and another agent here posted the e-mail response she'd received from the BofA negotiator that stated, it was BofA policy not FHA guidelines that dictate no dual agency. I guess they can get away with it.

BOA or any other Servicer for that matter cannot dictate FHA Loss Mitigation Guidelines.

 Allowable Settlement Costs – The term “Net Sale Proceeds” is defined as the sales price minus closing/settlement costs (i.e., reasonable and customary costs per jurisdiction that are deducted at settlement). Allowable settlement costs include:
1. Sales commission consistent with the prevailing rate but, not to exceed 6%;
2. Real estate taxes prorated to the date of closing;
3. Local/state transfer tax stamps and other closing costs customarily paid by the seller including the seller’s costs for a title search and owner’s title insurance;
4. Consideration payable to seller of $750 or $1,000 (i.e., if such consideration is not used to discharge junior liens);
Pre-Foreclosure Sale Procedures
Page 13 of 18
5. Up to $2,500 to be used for the discharge of junior liens if closing occurs within 90 days. Within 90 days, the first $1,000 represents the mortgagor’s consideration and the additional $1,500 represents FHA’s consideration for a total of $2,500. If settlement occurs after 90 days, the first $750 represents the mortgagor’s consideration and the additional $1,500 represents FHA’s consideration for a total of $2,250;
6. Outstanding partial claim amount. This entire amount must be paid when calculating the net sales proceeds. The seller, buyer, or other interested party may contribute the difference if the net sales proceeds’ amount falls below the allowable threshold; and
7. Up to 1% of the buyer’s first mortgage amount if the sale includes FHA financing.
 Unacceptable Settlement Costs – The following costs may not be included in the net sales proceeds calculation, however, the seller may use their consideration of $750 or $1,000 for these settlement costs.
1. Repair reimbursements or allowances;
2. Home Warranty fees;
3. Discount points or loan fees for non FHA-financing; and
4. Lender’s Title Insurance fee.

Source: Mortgagee Letter 2008-43

Notice the first bullet point - 1. Sales commission consistent with the prevailing rate but, not to exceed 6%;

Max commission is 6%, servicer is to follow state law on how commission can or cannot be paid.


Source: 

Matt Martin

Program Director, Loss Mitigation

HUD's National Servicing Center

There is a section in ML08-43 for FHA/PFS program that some Servicers interpret as prohibiting dual agency, or at least dual agent. (Note, Joe's dintinction between same agent versus dual agency.)

Scan for a phrase, something like "no conflict of interest between any two parties".

I would say, it is BofA's reaonsable interpretation of FHA's guidelines.  HUD/FHA has a history of going back on a Servicer after the fact during an audit and demanding treble damages for such things.  Afterall, didn't HUD just sue all the major Servicers?

BofA is covering themselves from a HUD audit IMHO.  Generally, blame the FHA, not the Servicer.

Generally I blame the Servicer, not FHA.

I was the listing agent for a GMAC HAFA Short Sale...the buyer was an agent.  Buyer could  not represent himself or get any $$ benefit from the sale.  Buyer was aware that he may not get paid a commission.  When the approval came thru GMAC told me that and said I would get full commission.  I thought that meant 3% but when I read the approval it showed they were paying me the full 6%!  I was shocked and could you believe actually felt guilty!  Anyway that is the only time I have had full commission on dual agency.

Elise - I think perhaps GMAC flubbed up and paid 6%.  Good for you!  I've heard agents brag about both sides but I've never seen it. 

I agree with BJ regarding the best way to a short sale close is to have both sides - the 2nd best is to co-broke with an agent as professional and experienced as yourself. 

 

Dual Agency also occurs when you have an agent from your office, or another office owned by your broker, write an offer on your listing.   The banks WILL pay the full commission on Dual Agency as long as it's not the same Realtor.  I suggest having another agent in your office write the contract and get a referral fee.  We have never had an issue.

The way you "avoid" agents who are unskilled or buyers who are attempting to offer down on several properties is to insist that:  earnest money be paid at offer acceptance and made nonrefundable for at least 75 (or so) days, that the buyer apply for a loan as usual except for obtaining appraisal, and that the buyer complete the inspections and inspection period/negotiations in the usual time frame (ten business days here).  All of these issues/requirements should be placed into your MLS as an addendum page to your listing so they are not a shock to the selling agents.

That way you, the selling agent, both parties  ....and the negotiator....all know everybody is serious on your transaction.

You should do this even if you have both sides - but you may actually find it easier to obtain if there is another agent involved.

You should take these steps to protect your seller's interest (in avoiding ultimate foreclosure)  - as well as insuring your own work will be paid for in the end.

RSS

Members

© 2024   Created by Brett Goldsmith.   Powered by

Badges  |  Report an Issue  |  Terms of Service

********************************** like buttons ************************