I have a listing of a house that was flooded in Superstorm Sandy and nothing was ever done to it.  It is now a tear down.

We had a $40,000 offer and I put a flat rate commission of $5000 for the total commission.  I made a policy of $5000 for anything under $100,000.  I figured it was worth a try.

They countered at $48,000, we countered back at $44,000.  Now they gave us a new negotiator and he said to change the commission to 6% as that is all they will allow.

Should I give in or should I fight it?

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6% is the max a Servicer will pay under HAFA regardless of the sales price.

they don't really care what your or my policy may be.

That is what I thought.  Thanks Kevin.

I say fight but make sure you have the right "weapons"   As a former loss mitigation employee, I know for a fact that Sr Management can override that "maximum 6%"  guideline.  On the other hand you should be flexible on your policy of a flat $5,000.00  Don't expect them to bend if you won't.

Also why is this being processed as a HAFA short sale?  Property is vacant so there is no relocation incentive to seller and if  there is no 2nd mortgage then just change to non HAFA short sale

Thanks Tony.  Probably not worth bothering at this point. 

It is your policy. Fight if you want, but you will likely lose and the transaction will never close.  Accept the 6% and you have a deal that will close quickly and put $2,640 in your pocket.  Are you the only agent - if so, you're lucky they didn't cut it to 4%.

Thanks, Thom.  No I don't have both sides.  Just trying to help a Sandy victim.  I will just accept the 6%.   Buyer's agent feels the same.

the Treasury Department’s HAFA guidelines for non-Fannie Mae/Freddie Mac loans, commission policy depends on when the sales contract is executed.

  • If a sales contract has not been executed, the servicer specifies the amount of commission in the Short Sale Agreement (SSA) as a “reasonable and customary” closing cost not to exceed 6 percent of the contract sales price.  The servicer transmits the SSA to the borrower for consideration of its terms.  The SSA requires the borrower to list the home with a real estate broker.  The borrower and the prospective real estate broker may negotiate with the servicer on the terms of the SSA, including the proposed commission.  If the borrower and the listing broker decide to participate, both must sign the SSA, agreeing to its terms.
  • There is a different commission policy for non-GSE loans if the borrower submits an executed sales contract to the servicer for approval before a SSA is executed.  In that case, the sales contract is submitted to the servicer along with an ARASS.  The amount of the commission in such a case is the amount negotiated in the listing agreement, not to exceed 6 percent.  This policy recognizes that the real estate professional has already done the work of marketing the property and obtaining an executed sales contract, so it is not appropriate for the servicer to reduce the commission below the already negotiated amount after the work is done.

http://www.realtor.org/topics/home-affordable-foreclosure-alternati...

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