Dual Agency Commission
Replies to This Discussion
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Permalink Reply by Napua Lucas on
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Is it an FHA loan? I had BoA tell me that a year ago when I had a dual agency sale on my listing that was an FHA loan. Luckily, (I felt) the buyer fell out and it was resold by another buyer's agent and we both got our 3%. I don't feel like handling both sides for 3%. Now that I know that upfront, I won't.
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Permalink Reply by jennifer mullen on
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No, not FHA. It was an investment property. They really have you over a barrel in situations like this. It's not like you can reject the deal because you don't like your commission, but it's completely unfair to be punished for being a good agent and finding a seller for your own listing!
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Permalink Reply by Paola Martinsen on
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send me an email [email protected]
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Permalink Reply by Jeff Payne on
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Do you know who the investor is? that is the key. If it is GMAC paper, they can and will cut the commission but if it is a Fannie or Freddie it is a bit tougher. I have never been paid less than 5 on a GMAC.
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Permalink Reply by Bryant Tutas on
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Jennifer. Why not have the buyer pay 3% on his side of the transaction? Or have the seller sign a note and pay you later. They're not saying you can't get paid they are just limiting what they are willing to contribute.
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Let's place this in the newsletter today and see what kind of responses we can get
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That's a good idea. My negotiator was out of the office last week but I'm going to ask him whether they'll pay the full commission if we write the offer with a different agent. I bear a legal responsibility for handling both sides of the contract and deserve to be paid for that liability. I can understand 5% as I would be happy to do that with any sale, but 3% is completely unacceptable unless it was disclosed up front. IMHO...
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Jennifer. If you ask the negotiator the answer will be 'No". You are probably too late to try and bring another agent in. But if you want to try just change the HUD accordingly and send it to the negotiator for approval. Asking is not the way to go.
This is one of the things you learn as you do more and more short sales. The lenders are almost always going to have an issue with paying full commission to a "dual" agent. In the future you'll have to figure out how to get paid, as mentioned in my previous comment, or just don't work with buyers on your own short sale listings. Give them to another agent and take a referral fee.
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Permalink Reply by The Negotiator on
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Now were getting to the solution...
To solve this issue, simply break down the commission into 2 lines (like there are 2 agents) on the HUD. I work with dual agency all the time and never get the commission cut. Lender's don't ask "how many agents involved" because hey only see the HUD and how many lines on the Realtor commission. The key to short sales is getting what you want without "involving" the attention of lenders. Do what needs to be done and get paid. If for some strange reason the lender asks how many agents involved, tell them 2 .. you the agent and your broker! Your broker signed the listing agreement, right? 2 agents.... (but they don't ask)
Bryant Tutas said:Jennifer. If you ask the negotiator the answer will be 'No". You are probably too late to try and bring another agent in. But if you want to try just change the HUD accordingly and send it to the negotiator for approval. Asking is not the way to go.
This is one of the things you learn as you do more and more short sales. The lenders are almost always going to have an issue with paying full commission to a "dual" agent. In the future you'll have to figure out how to get paid, as mentioned in my previous comment, or just don't work with buyers on your own short sale listings. Give them to another agent and take a referral fee.
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Permalink Reply by Jackie W. McDermott on
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I'm in Arizona with a large company, which has many offices and operates under one brokerage. An agent in my office (NOT ME) has listed a parcel of vacant land as a short sale with M & I Bank, I have it under contract. The HUD was submitted and the lender said they consider this to be dual agency and have cut the commission from 6 to 4%. The listing states the buyer agent will be paid 2.5%. The listing agent is FURIOUS, and I am as well. Since the commission check would be cut to only one brokerage, how do we separate into two on the HUD? Any other ideas?
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Hi Harry - In ALL sincerity, I have no issue at all with a short sale listing agent taking a larger percentage. They work their tails off, and never really know until the end whether or not the sale will go thru. In our MLS, we are no longer permitted to insert the language you suggested. It was outlawed about 2 years ago. I just think the banks shouldn't screw with the commissions if they are not atypical for the area. FNMA/FREDDIE don't allow it anymore either. What's to prohibit banks from cutting the commissions to a total of 2%? What are we going to do, walk away? I guess the best solution would be to have my buyer sign an agency compensation agreement specifying they'll pay me the difference between 3% (assuming that's what I charge) and whatever we can squeeze out of the banks. It sucks, though, to have buyers involved in commissions. Oh well. Thanks for your response.
Harry Clay said:Maybe next time the Listing Agent will remember to include the MLS caveat:
"Short Sale Subject to Lender Approval: Commission Reductions to be Split 50/50"
The LA was greedy, wanting the bigger %...& if the LA didn't include the reduction verbiage, he gets stung, & you get the last laugh.
Jackie W. McDermott said:...The HUD was submitted and the lender said they consider this to be dual agency and have cut the commission from 6 to 4%. The listing states the buyer agent will be paid 2.5%. The listing agent is FURIOUS, and I am as well. Since the commission check would be cut to only one brokerage, how do we separate into two on the HUD? Any other ideas?
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Guys, If you are going to work short sales then you need to know how to get paid. Here are 2 articles I wrote that will help.
http://activerain.com/blogsview/1774704/don-t-let-short-sale-lender...
http://activerain.com/blogsview/2027519/if-you-are-going-to-work-sh...
I hope this helps.
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