This point came up in my listing presentation this week. I don't show unrepresented buyers my short sale listing because of:
What's your take on this topic? Do you address it with your clients upfront?
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Abraham,
We don't have dual agency in Florida and the last thing on my mind when trying to help out a distressed seller is commission. The referral opportunity after a completed short sale is worth far more than a little bit of commission if it gets cut. Just my 2 cents worth.
Are you allowed dual agency in your state? Not all lenders reduce commission. I've gotten 6% as a dual agent. The number one thing to keep in mind is disclose disclose disclose. YOU MUST make sure both the buyer and seller are aware you are representing both sides.
Also in my state you can act as a facilitator which is the safest way to work. You facilitate the sale without necessarily representing either party. It works well.
I think trouble can arise if you are not fairly treating one party or another. I absolutely think it can be a problem for some agents if you only have the interests of yourself, so the best thing to do is try to keep the lines of communication as open as possible.
GOOD LUCK.
In Florida we are transaction brokers.... I always avoid working both sides because I have a team of buyers agents that work with all of our buyer leads.
As far as commission, again, fight for your commission but if they cut it, close the deal. Important thing is to remember that you may have a sellers financial future in your hands and killing their financial future over 1 or 2% cut in commission is crazy. You close the deal and work the seller properly, you will get referral business from that seller for the rest of your business life. Buyer will be happy too, referrals source there too
Here in California, I absolutely show them. The best offer is the best offer. Some Lenders cut my commission, but not too often and who cares? Seller's have hired you to get them their BEST offer. Both in $ and Terms.
I just pass them off to one of my buyer's agents. Although I have handled both sides of the transaction many times with no issues at all.
That depends. If your seller is going to have a tax burden as a result of the short sale, which could happen if the listing is an investment property, then your 1st duty is to get the seller the highest and best. If you truly are representing both parties, how can you help the buyer get the best price for them as buyers? Buyers needs are to get the lowest price, so you will have a conflict of interests in a case like that. Even if there is no tax burden and the price can be "advantageous" to the buyer, remember, the banks often will push the foreclosure process forward in parallel with the short sale process and if the buyer can't perform or the bank decides they would net more as an REO than accepting your buyer's offer, they can foreclose - which would be against what you were hired to do for the seller. I am sure if you think about it, there are a few more "what if's" that could create conflicts of interest - that is why Agency Laws were created.
I agree with Jeff. Transaction brokers represent the transaction, not the buyer or seller. When we try to get the seller the highest price the property normally does not even appraise. I will get any offer to the lender to get them to order the valuation and they end up coming up with price they want the property listed at. I would rather have the commission cut 2% and have both sides then rely on another agents buyer.
OK just to clarify. Transaction brokers in Florida do NOT represent the transaction. Never. Ever. We represent buyers, sellers or both albeit in a limited capacity. A transaction is not something that can be represented.
I rarely represent both sides. I give them to someone in my office that I feel will represent them properly.
I do disclose that I am a sellers agent when showing the properties. Being upfront with potential buyers has actually gotten me much farther than just trying to 'double side' the deals.
Abvraham, here iln Connecticut Buyer Brokerage is law. However, you can work with an unrepresented buyer if and when you have him sign an Inrepresented Buyer Agreement. That means you do not represesnt him, i.e. there is no dual agency. How much the banks can reduce the commision depends on the mortgage the seller has. Generally, if you are the listing and selling agent, you should have that reflected ilndividually in the HUD-1..An alternative would be (and I have done that a cojple of times) to use your name for the LB lcommission and your broker's name for the selling broker's scommission. That should be reflected in the UBA as well as the HUD-1.
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