Double-siding a short sale - YES or NO?

Will you represent both sides of a short sale?  Why or why not?

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Permalink Reply by Jeff Payne on March 3, 2011 at 7:18am
Yes, it is not unlike any other sale.  We in Florida act as transaction brokers.  I do have a team of buyers agents that actually work with the buyer and I only work with the sellers but see no problem with double siding a transaction.
Permalink Reply by Kristin D Smith on March 3, 2011 at 9:03am
Thanks Jeff!  I am beginning to see it being a case by case basis.  Depending on the type of transaction, seller's situation, etc.  I really appreciate your input!
Permalink Reply by Paula Henry on March 4, 2011 at 11:15am

Kristen -

I just closed one whereby the seller had already completed a bankruptcy. It was an FHA and the price predetermined, so I brought the buyer and closed. Both of my clients were extremely happy. Like Jeff stated, it's not like a normal transaction.

Permalink Reply by Bill Travis on March 5, 2011 at 1:51pm
I won't work both sides as a dual agent, although it's legal in AZ. There is too much liability involved. And especially in a short sale I would never be a dual agent.
Permalink Reply by Steve Early on March 6, 2011 at 1:23am
I see people do it all the time but you have to realize that there are some combinations of servicers and investors that will not pay both sides. A 6% commission becomes 3% if they realize you are handling both sides. Bill raises a good point as well that I had never thought of. I wonder if there are examples of an agent having legal difficulties because s/he represented both sides.
Permalink Reply by Peggy Noel Bouchard on March 6, 2011 at 2:42am
One way to get around Steve's very legitimate and all too real commission reduction situation is to work with someone on the 2nd side - it reduces your liability, workload and you can get a referral fee.
Permalink Reply by Kathleen Lordbock on March 6, 2011 at 3:31am
I have and dual agency is legal in MN- I got the full commission without a problem as well.
Permalink Reply by Nate Gerard on March 6, 2011 at 3:44am

There is a liability issue to consider even in states where dual agency is legal. Also, sometimes it goes with no problems from the lender side and sometimes lenders will reduce commission to 5% or even as low as 3%.

I've gotten around this by bringing in another agent and they take 2.5% and I get a 50% referral from them. So in the end, I get 4.75%, we eliminate the client liability issues, and I get some good will towards referrals from another agent when they're in the same situation.

Permalink Reply by Steve Early on March 6, 2011 at 4:01am

Hi Kathleen:

The fact that you were paid for both sides just means that this servicer and investor didn't mind paying one Realtor for both sides (or you got lucky and they didn't pick up on the fact that you were a dual agent). If you run into an investor that won't pay both sides there isn't a thing you can do about it. Unfortunately, you probably won't learn that they're only going to pay you for one side until you did all the work and receive the actual approval letter.


Kathleen Lordbock said:

I have and dual agency is legal in MN- I got the full commission without a problem as well.
Permalink Reply by Peggy Noel Bouchard on March 6, 2011 at 4:18am

Hey Steve -


Exactly - Nate's plan assures you get paid fairly - why do 100% of the work for 50% of the commission when you can get a referral fee, build your network and reduce your liability? 
Steve Early said:

Hi Kathleen:

The fact that you were paid for both sides just means that this servicer and investor didn't mind paying one Realtor for both sides (or you got lucky and they didn't pick up on the fact that you were a dual agent). If you run into an investor that won't pay both sides there isn't a thing you can do about it. Unfortunately, you probably won't learn that they're only going to pay you for one side until you did all the work and receive the actual approval letter.


Kathleen Lordbock said:

I have and dual agency is legal in MN- I got the full commission without a problem as well.
Permalink Reply by Peggy Noel Bouchard on March 6, 2011 at 4:19am

Hey Kathleen


We have dual agency in VA, but recently had an associate get her commission cut to 50% despite handling both sides of the deal - never again!
Kathleen Lordbock said:

I have and dual agency is legal in MN- I got the full commission without a problem as well.
Permalink Reply by Thom Colby CA Brkr 888-391-5245 on March 6, 2011 at 5:06am

Hi Kristin !

 

NEVER - Not on ANY transaction.  Although it is legal in both CA & TX where I am licensed I NEVER HAVE & NEVER WILL. 

I believe doubled-ending is self-serving.  If I represent either the seller or the buyer, they have my full attention and I only look out for the party I represent.

 

Here's the example I always use:

Seller lists their house at $550,000 but tells me they will take $500,000.  Buyer offers $475,000 but says they are willing to go up to $510,000.  What would you do?  MANY agents / brokers will say "we have a deal" and get everyone to sign at $510,000 - Everyone SEEMS happy, but is that the best that could be done for Buyer or Seller - probably not.  Maybe the  Seller could have gotten more, or maybe the Buyer could have paid less.  The agent / broker sees $$ and gets it into escrow to get that double-sided commission.

 

If I have a listing and a buyer calls from the sign, of course I will show the property on behalf of the seller.  BUT, I direct the potential Buyer to find an agent they can work with either through their friends and family or through the local Association of REALTORS.

 

I am a proponent of ending Dual Agency everywhere.  This is just my opinion and the way I conduct my business. 

 

Thom Colby

Broker

Newport Beach CA

 

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