Looking for tips on getting higher commissions paid. On lower priced listings ($65k & below). The lenders will not pay more then 6% on the listing which equates to under $1k in many instances. Most of these listing are taking 6 months or more to close. Several different challenges with financing contingencies. And several offers before closing. Anyone having success with charging a flat fees and having them paid-by lender or seller? Any other suggestions welcomed.
As long as it's legal in your state you can collect an advanced fee from the seller. Or you can always collect after closing. Also, you could get creative and just offer a 1% co-broke BUT also include a buyers agreement where the buyer agrees to pay their agent an additional 3%. With a cash deal the buyer can just pay their agent. With a financed deal the seller can agree to pay 3% in seller concessions because we know in most cases the lender will agree to this. The buyer can use that 3% to pay his agent. You make 5% and the BA gets 4%
I love the creative thinking!
What are your thoughts regarding listing agents charging the buyer a short sale negotiating fee to the buyer? I have heard of this being done in other markets with success. This way the buyer's agent doesn't have to get a discounted commission and it is not subject to the seller's lender scrutiny.
as long as the buyer agrees I have no problem with it at all.
Technically, an agent that has a listing agreement cannot charge a fee or commission that is higher than listed on the listing agreement. So, the way to get around that would be to put 7% on the listing. Most likely, the sellers lender will only pay 6%, but then you can charge the extra 1% to the buyer, as long as it's disclosed in MLS remarks.
@Jeanine Yes, low value underwater property is a problem, no question. The unfortunate reality is that not every homeowner can be helped by a short sale. Also, lower valued property that is nearing foreclosure is also more likely to have other encumbrances, or have sellers who declare BK, or buyers who walk.
I work hard to help my sellers and when I take them on, I'm committed. But I've also learned the hard lesson that some property needs to foreclose so that the encumbrances can be extinguished.
@Darlene. The FTC stated that portions of MARS would not be enforced. The Reg stands, but portions will not be enforced. Pretty sure "advanced fees" was part of that forbearance for RE professionals. State laws may govern, however, if state laws prohibits such advance fees.
Darlene. MARS no longer applies to agents negotiating short sales as part of their regular business. This was a revision passed down by the FTC last year.
Some deals we make more money, some deals we make less money. I know what you mean because I've worked on a $70k listing for almost a year now and finally got approval on Friday (yea!) and I'm happy to finally getting paid for it.
I do a bunch of itty bitty ones ($15,000 - $25,000) and you are right the commission is awful. I put a $3,000 commission on my listing agreement for anything I think will sell below $100,000. I have had a lot of push back from the banks but find when I send the a REO vs Short Sale worksheet and point out that they will be paying that as an REO then why waste more time, legal fees and carrying costs when we can just get it done now. Works most of the time. I also put all these listings in MLS at 3% and let the co op agent know that if we get the $3K I will split 50/50. If we don't get the $3K I advise her that if the buyer will kick in we can still do the 50/50 otherwise it's 3%. The ones that usually present a probleblem are the govt ones ones that are capped at 6% and even then I fight to get the extra....sometimes I do and sometimes I don't
In the Detroit area where values are real low, we always charge a short sale processing fee to the buyer and/or transaction fee. The fee charge has to be placed in the MLS remarks where the buyer/buyer agent can see it. The values have decrease so much, buyers don't have a problem paying it.