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

Posted by Craig Bartels on February 5, 2013 at 9:30am in Short Sale Discussions

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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Replies

  • Craig Bartels February 6, 2013 at 2:01am

    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....

    • Craig Bartels > Craig Bartels February 8, 2013 at 6:19am

      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

  • Simon Campbell February 6, 2013 at 1:45am

    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.

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