Dual Agency Commission

Jackie W. McDermott June 20, 2011 at 1:42pm

Just to recap my dilemma. I operate in Arizona. "Consentual Dual Agency" includes every agent in my extended company. Our company has 4-5 offices. I am the buyer's agent, but because the listing is from someone else in my company, M&I Bank considers it "dual agency". There really are 2 actual agents, one for the buyer (me) and one for the seller. I've never met nor talked with the seller. But because we have to sign a Consentual Dual Agency Addendum, the bank is treating us as the same. We aren't thru this yet, so next time we submit our final HUD, I'll have two line items included on the commission, even though both checks will be going to the same company. Wish me luck.

Napua Lucas June 20, 2011 at 1:14pm

I just received this today from BofA regarding dual agency commissions. It was included in their Short Sale Addendum that they want buyer/seller and agents to sign. So are you saying that if we state it is two agents it will go through with no problem even tho' it is a dual agent?:

8. Brokers’ acknowledge and agree that there are no Dual Representation. Dual Representation is defined as a single

agent representing both the Buyer and the Seller in the transaction giving rise to the underlying Purchase Contract.

9. Brokers acknowledge and agree that that any misrepresentation or omission may subject the responsible Party to

civil and/or criminal liability.

Christina Conrad said:

That is correct what Jackie said..that is what we do in our office and we have NEVER had our commission cut.

The Negotiator said:
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.

Christina Conrad June 20, 2011 at 10:29am

That is correct what Jackie said..that is what we do in our office and we have NEVER had our commission cut.

The Negotiator said:

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.

Bryant Tutas June 12, 2011 at 7:52am

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.

Jackie W. McDermott June 12, 2011 at 7:28am

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?

Jackie W. McDermott June 12, 2011 at 5:20am

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?

The Negotiator June 12, 2011 at 2:17am

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.

Bryant Tutas June 12, 2011 at 1:44am

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.

jennifer mullen June 12, 2011 at 1:36am

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...

Bryant Tutas June 12, 2011 at 1:27am

Let's place this in the newsletter today and see what kind of responses we can get

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Dual Agency Commission

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