Complicated...
FHA short sale.
The real estate company representing the buyer both are LLC's. They both have members that are members of both companies. HUD has stated that there is a conflict of interest and will not pay the buyer agent the commission...only my side as the listing agent. Buyer agent is throwing a fit stating that just because both companies have the same physical mailing address, that both buyer and buyers real estate company have members that are in both LLC's, that there is no conflict of interest and he can have his commission. Has anyone else had this or got it approved?
As of now, he refuses to close the transaction since he will not get paid a commission. We were supposed to close today and foreclosure sales date is just weeks away...
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quick update, the buyer agent is stating that HUD doesn't care whether they have common management, only if they have "common ownership". I would think if the COO of the buyer agents company is also the COO of the company purchasing the property, that that would be considered "common ownership"...?
but what is considered financial interest? Being a member of both llc's?
Absolutely correct. Same "members" of each of the LLC's is common ownership and under HUD rules a conflict of interest. The same mailing address alone would not be an issue, but sure that tipped HUD off to look a little further.. So no commission will be paid to the buyer side. The Real Estate Company should have known this. Has the real estate company not done any short sales?
This is Main Street Renewal and they are buying thousands of homes in multiple markets in the United States. I don't know how on earth they couldn't have ran into this in the past....
quite a few of the 'guidelines' that are enforced/strongly recommended at the servicer level are not a result of some investor/insurer guideline but as a result of their counsels advice for 'best practices' or their incorrect interpretation of such guidelines.
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