With all the implementation of HAFA, FHA, Fannie and Freddie rules on short sales, there is no reason that as a real estate agent you should ever get less than a 6% commission!!
For some reason I see agents always put in the remarks section of a short sale listing verbiage of this affect: “Commission subject to bank approval, any reduction of commission will be split 50/50” Now if this is a requirement of your board this is something I understand, but you may want to talk with your board and get that changed. Why would you ever put that in your listing remarks? You are setting yourself up for a reduction in commission!
Let me tell you how: Since we are in the process of releasing the first national short sale designation based solely on negotiating short sales in conjunction with a few major lenders, we have been able to get interviews and some very good inside information from a few of our lender contacts. Most banks will be all switching to the Equator system to process short sales, which with equator you have to upload a copy of the listing with most banks. One of the professionals we are working with told us that some negotiators will look at the listing and if the listing has that language referencing a reduction in commission they will cut the commission. In some cases, because of loan type, they are not even allowed to do it. If you are not aware of the guidelines and do not catch on, I have seen banks cut commissions on agents who were not aware of the circumstances. If you don’t have that language in the remarks you do not have that to worry about. Putting that to the side for a minute you should never have your commission cut regardless if it falls in one of the programs that requires a 6% comission if you are alert to the guidelines.
As mentioned above a bulk of all the mortgages in the country follows a short sale guideline system. These systems require the agent get paid a 6% commission. Prior to starting the transaction find out what type of loan it is and go into the transaction fully aware that it is a mandated guideline to receive a 6% commission. FHA, Fannie backed, Freddie backed, HAFA, Lender portfolio, and co-op programs all pay a 6% commission. That covers just about every kind of mortgage that is out there! We all know the amount of work each short sale requires and it is only fair as an agent that you get paid what you deserve. Not only that, the bank is saving way more that 1% of commission by not foreclosing. Pay attention to the details and earn 6% every time!
If you found this information helpful sign up for our upcoming “Master the Art Of the Short sale” approved for 3/possibly 6 hours of CE. Email Brandon.Brittingham@longandfoster.com and I will send you a registration form as well as details of the class.