Bank of America's Bogus War Against Short Sale Dual Agency

Let me begin with the fact that I have never been a dual agent on a traditional equity sale.  The only sales I have ever “double ended” were short sales.  In fact, I began doing dual agent transactions out of necessity on short sales in order to hang on to buyers and get the transactions closed.  I find that if I can communicate directly with the buyer they are less inclined to walk, and I also find that I am better able to locate a buyer who will be patient enough to wait through the process.  So, I had to consider dual agency to truly help my seller clients who were in financial distress and up against powerful bureaucracies.


12433923070?profile=originalNow apparently, Bank of America has decided that dual agency is “problematic,” and has adopted policies to discourage it, including a substantially lower offer of commission to real estate brokers who work both sides.  For a short time this year, Bank of America even adopted a mandatory addendum prohibiting it -- but they backed away from that pretty quickly and instead adopted policies to create large financial incentives against it.  Further, they dictate that even if the seller or buyer could make up the difference in the negotiated commission (which most can not) they prohibit that as well.  Wow.  



I spoke to a Bank of America negotiator just this week that told me that dual agency was “problematic” and cited the fact that it wasn’t allowed in certain states to support his claim.  Now in that particular instance, they had a full appraisal of the home and accepted the price and major terms of the sale -- the only big problem they had was with the commission.  He categorized their position as “not negotiable.” Another negotiator freely admitted that the commission I negotiated with the seller would be paid in full if two agents were on the file. Wow.



My problem with their stance is that my state (California) has not outlawed dual agency, and I really don’t think Bank of America should be in charge of that decision.  And of course, since they are so large (in fact “too big to fail”) the policy decisions they make are beginning to have de facto legislative effect on the real estate market.  By discouraging dual agency to the point where it is not economically feasible for a smaller or one person brokerage to do it, they are in effect restricting the kind of services I can provide to clients in distress.  And, I feel it interjects Bank of America too far into my client relationships.  



12433923095?profile=originalFurther, I find their policy, dare I say it … hypocritical.  In my area MLS, agents are required to disclose whether they have a “variable rate” of compensation for dual agency, i.e., if you are going to discount your commission when you represent both sides, other agents must have notice of that fact.  I have seen no such disclosure on the many REOs that are listed by Bank of America REO agents.  So, apparently dual agency is not as “problematic” when Bank of America wants to get their own listings sold quickly and off their books.  Wow.  



At the close of my discussion with this particular negotiator, he did try the old  “investor guidelines” routine.  However, because I have run this issue up the chain in Bank of America before, I feel confident in saying that this is coming from Bank of America.  And, I think it is a dangerous and disruptive policy that does further harm to homeowners in financial distress in California and in other states where dual agency is allowable.  The irony for me personally is that bank/servicer inefficiency actually inspired my own decision to begin doing dual agency.  My question now is --  what will Bank of America do next?


And haven’t they done enough already?



Tni LeBlanc is an independent Real Estate Broker, Attorney, Short Sale Agent, Certified HAFA Specialist (CHS), and Certified Distressed Property Expert (CDPE) serving the Santa Maria, Orcutt and Five Cities area of the Central Coast of California.

* Nothing in this article is intended to solicit listings currently under contract with another broker.  This article offers no legal or tax advice and is for information purposes only.  Those considering a short sale are advised to consult with their own attorney for legal advice, and their tax professional for tax advice prior to entering into a short sale listing agreement.  Mint Properties is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.

Copyright © 2011 Tni LeBlanc *Bank of America's Bogus War Against Short Sale Dual Agency*
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Comments

  • We've run into this just recently, where the investor (Fannie) approved the transaction, and it gets into the hands of the BofA underwriter.  We were told in order to get an approval letter, we needed to remove my name from the authorization (I'm the co-listing agent, and also represent the buyer).  We argued this as much as we dared, because every protest on our part results in another 2-3 day delay to be presented for "management" approval, and finally gave up and complied with their stupid request just to get the approval letter, which STILL hasn't been issued.  We've argued extensively that Texas also does not prohibit dual agency, but it just falls on deaf ears.  I've gone up the chain, speaking extensively with President/CEO office reps, which makes me think another reason they want my name off the authorization letter is to silence my comments and complaints......amazing. On this transaction, the investor gave approval on 6/28.  It is now almost a full month later, and still no approval letter.  It's  sad to see an organization so mis-managed that they can't get out of their own way to let a transaction happen.  We've done deals with Nationstar where start to finish, we have everything wrapped up and ready to close in 30 days.  It CAN be done.

  • Thanks Clay!

    Yes, Jeff - I think BofA is being very hypocritical about this and their objections are bogus.  When it is their agent they have no problem with double ending AND getting the loan.

  • I find it very hypocritical that an REO agent for BofA can double side a transaction but a short sale agent can not.  The REO agents can manipulate the system and be almost assured of a double sided transcation.

    Our problem is that there were so many dishonest people trying to scam the system that these stupid rules get put into place and the honest professionals get screwed.

    Tni, push this thing to the top, I will do the same.....

     

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