You should have told the bank NO. That was your fault.

It is not legal to require 3rd party approval for the commissions.

Remember that compensation is BROKER TO BROKER and you can NOT hold a gun to their head to require them to cut the published commission rate.

Watch VAR's Lem the Legal Eagle talk about short sales and commissions.

Next time, tell the bank no, and watch them fold their deck of cards. Nowhere does it say that we have to work for free. We have our rates and it the bank doesn't want it, they can reject the offer.

depends, as a realtor, im sure you know that a short sale occures after the seller receives an offer lower than payoff amount. If MLS price was higher than your negotiated short sale price, then, as a realtor, you know that all bets are off when your renegotiating a deal

Your deal was with the lender to workout- yes they always go for the deep pockets -ie- the realtors commissions. But don't forget to remind the "negotiator" you're dealing with that they are going to pay a commission now or later but they will be paying it at full price on either side of the sheriff's sale date. You were just inexperienced because you weren't prepared to answer to that very deep cut to the throat. Faced with a decision to give up the deal and your clients respect; many do the same thing every day. giving the banks more confidence that when they ask an inexperienced agent to cut their commission, they'll get it. Handle the big guys- remember don't let them see you sweat- next time use the ammunition you have at your disposal and be careful even our realtor's association is printing short sale topics that are not researched fully because the people they talk to are not giving up the full story either! (it's not in their best interest for bankers to say how/when they do pay out full listing prices & nobody likes gettin' sued for sayin' they did/do!) and it's not in my best interest to tell you "in public" how I do it either- you've got to learn it by doing it and then protect it.

Now you know why most realtor's won't take a short sale listing even though it helps people- If it was easy- everybody would be doing it, and fees charged would also dwindle too, right?

Vangie - this stinks, but really, if you haven't heard Lem's position, please follow the link below and listen. We are doing a huge service to these banks and clients, and we should not be taking a hit on a commission when they are the hardest deals we're doing. I hate that you did. I know you did it from your heart. I also know this sounds cut throat.. but this is a business, and you are a professional. If you could get a short sale to go through that says a lot about you! You DESERVE to be paid in full, as does your colleague- the buyers agent.

Having said that - we all make concessions... sometimes we give up commision. But, it is a business decision. Don't fault the other agent for making a different business decision than you did. We all need each other in this market.

Hang in there... and be proud of what you accomplished.

Sorry I missed that you are the listing agent earlier...yes, Mr. Melton is right. That buyer's agent should have his licensed revoked for that crap.

On another note...the new MRIS rules state that can no longer advertise "50/50" in the MRIS. It has to either be a flat dollar amount ($5,000), a percentage of the gross sales price or a percentage of the net sales price. If you advertised one of the three above, your broker must honor that to the Selling Broker.

Check with your broker, the MRIS and Lem Marshall for further guidance.

You know, I thought about this one more and something else came to mind. You are telling us that the buyer's agent stated that he/she would kill the deal unless you paid up? You mean to say that the buyer's agent was going to go against their buyer's wish to buy the house so that the AGENT'S needs were satisfied first? That is a clear breach of fiduciary duty requirement involved in a agency relationship with the buyer, and you could easily report such conduct to the licensing board. I sure would.

I have had a similar experience and the best you can do is try to negotiate. Most buyers agents in this situation will want the full three percent. They hold all the cards and the fact that it is subject to lender approval puts you at a negotiating disadvantage. They know your client needs it and they will use tht to their advantage. The best you can do is try to reason with them.

Miguel Ogas, REALTOR, EcoBroker
Century 21 Gold Key REALTORS
(540) 420-5670

Sorry to hear about this unfortunate situation. What can you do but suck it up, learn from the answers below, and don't make the mistake twice. Also, run your listing by the brokerage before you post it in MLS. Any manager should have known about this potential problem from the get-go.

Oh, also, sling mud about that agent to everyone you know.
(I jest, but not really...)

SAY NO!

You should do two things.

1) Watch Lem Marshall's podcast (Lem is the Special Counsel for the Virginia Association of Realtors) about this very subject. Here's the link - http://varbuzz.com/new-webcast-ethical-considerations-in-sho…

2) Talk to your broker about this immediately.

If you advertised the commission at x% without any notice that the commission could be reduced then your broker was obligated to pay the % you offered in the MLS. Everyone needs to remember that the commission in the MLS is considered a "contract" between brokers. In order to change the commission both brokers need to agree.

The bigger question is did you push back with the lender at all about them reducing the commission? Did your broker approve the banks reduction of the commission from the original listing agreement? We all have to stand up against the lenders. It will cost them more to take the owner to foreclosure than it will for them to pay a fair commission to the agents who are handling the deal for them!

If it was your listing, then as the listing agent you should split the commission. In short sales, the lender must approve the commission in advance but the buyers' agent was not ethical is having you hand over the full uncut commission. Control your listing.

Hi Vangie. Sometimes that might happen. A big pain but you did the right thing by your clients. I've learned lately that when taking a listing agreement for a seller in a short sale situation, to take the listing at higher than my average listing commission so that I would have negotiating room with the lender. So, if the commission I've asked is xx% with a 50/50 split with the buyer's agent, if I'm asked to reduce it to xx%, there is still some money in the dela for me and the other agent. I would also make a note in agent remarks of the MLS listing something to the effect: "all offerss require 3rd party approval. In some cases, the lender will cut commissions. Any commission earned will be split 50/50 with Buyer's Agent"


I hope this helps.

Deb Orth