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Jodi Bettarel, Real Estate Pro in Temecula, CA

On a Short Sale with a 1st and a 2nd, does the 2nd get to decide the commission percentage? The first is approved at 5% and the second says No Way 4%.

Asked by Jodi Bettarel, Temecula, CA Fri Aug 19, 2011

Buyers have signed loan docs, escrow will NOT move forward until all parties agree on the percentage. Meanwhile my buyers are displaced living with family just wanting to move into their home. (How much longer will this family have to wait to get keys.) I have never had a transaction like this at all! The banks seem to forget that the file on their desk is someones home, their life, their home! At this point I do not care if it is 4-5%, I just want them to move forward so they can get their keys.

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I agree with Veronica! Something does not make sense!! I would be asking a lot of questions of that listing agent.
1 vote Thank Flag Link Fri Aug 19, 2011
A very difficult situation indeed. It is not uncommon for one lender to establish internal 'policy' from which they attempt to impose limitations on another institution and forbid outside money to make up the difference. Some wish to dictate compensation for the agents, some want to dictate the amount secondary and tertiary parties may receive. Should they prevail, then comes the promissory note, followed by the 1099. For many BK is the best solution to the quagmire these institutions have created in their rush for the cash. To believe this is the sole responsibility of the individual negotiating for the homeowner is misguided.

Ultimately, when it comes to your scenario, one comes face to face with reality. In the eyes of those for whom you represent, you are not saying NO to the bank. You are saying NO to the home owner and home buyer. "No, you can not have/sell this house because I will not permit the banks/servicer/investor to take the bread from the table of my children!" Unfortunately, you are the only one your buyer sees. Of course, you may have embedded in your buyer agreement a minimal compensation clause in anticipation of just such a situation.

Situations like this, which many have encountered, make it tempting to place on the front yard of these homes the names of the banks involved. Perhaps even a running dialog regarding status. Maybe public exposure can create a motivation to close rather than obstruct getting these homes sold.
1 vote Thank Flag Link Sat Sep 3, 2011
Jodi,
I have to say I feel for you. It is terible to be at some listing agents negotiator who fails at the norm.
There is only one or two banks I know of that is that difficult on the second lien and they luv to pull shenanigans and I can not mention them on a board, but the first one rhymes with emc and the second one is an ending to a action verb. Other than that I would say the negotiator is LAME. If I was the listing agent I would say OK good luck with that and say enjoy foreclosing. My pay is not up for auction by a bank. They do not have the right so I escalate til the cows come home.

I think good short sale agents GUARANTEE the buyers agency side at 3% and know how to negotiate so if there is any loss it is on the negotiator / listing agent. At least that is what I do.

Would I ever give in?
If I knew the deal was way under market value and the deal was easy I might.

Otherwise I would say no. The banks will not let something fail for 1%. Especially an agent commission.

I think if it is accepted someone is doing a disservice to our profession.

I know the negotiator is messing with the listing agent for the fun of it.

You can always bat it back to the listing agent and say hey, it is time for the seller to chip in or you the listing agent to chip in. I'm stand firm on my end.

Then you mention you had to pay 300 out of your pocket for HOA. who are you kidding?
The seller or the listing agent should eat it.

Ask your broker.

I would bet you will make sure of who the bank is in the future before you put the next short sale offer in.

Shenanigans at closing.

There are a lot of homes for sale. Or at least there appear to be. It sure would be nice if agents put them in "backup" when they signed a buyer.

Please let me know the name of the bank. you can email it.

I guess you are stuck with accepting it all for you buyers sake.
I can not believe this was not ironed out prior to the start of escrow.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
harold@southerncaliforniashortsales.org
http://www.southerncaliforniashortsales.org
California Department of Real Estate Broker License # 01312992
1 vote Thank Flag Link Sat Aug 20, 2011
I think the listing agent does not know what He is doing!!! Rarely if ever do you see it get reduced below 5% and the 2nd got what they wanted so in my opinion....The listing agent is NOT pushing back hard enough. They will bring 6 down to 5 if you don't fight but 5% is more than acceptable to most banks!!! Hey... just thought about this... go on shortsale superstars and ask the question under the bank that the 2nd is on. They sort by banks and you can ask questions... People will chim in on what experiences and knowledge they have in dealing with that particular bank. Gooooood Luck!!!
1 vote Thank Flag Link Fri Aug 19, 2011
I agree with Joe, Jodi.

The second is trying to make up for their larger losses. I would do what Jose suggested or as a last resource let the second know you would meet them half way at 4.5. They are negotiating, why should you not, unless of course you find it to the best interest of your clients to accept the 4% and move on.
Good luck and please share the outcome.
Victoria
1 vote Thank Flag Link Fri Aug 19, 2011
This doesn't make sense. You should have approvals on both prior to even getting a loan approved. Usually the lender gets a copy of the approval as well as both agents and then escrow gets involved.
1 vote Thank Flag Link Fri Aug 19, 2011
I do have a question? Has the 2nd agreed to the amount they are to receive when escrow closes? If they have then they should not care how the expenses are broken down. I really think you need to talk the listing agent and put pressure on him to split the cost or to elevate the call!
1 vote Thank Flag Link Fri Aug 19, 2011
You might want to consider splitting that 1% with all parties, buyers, sellers, and other agent. They normally don't negotiate for a commission unless they feel they want more. I feel that 2nd lien holders always overplay their hand...Good Luck Jodi!!
1 vote Thank Flag Link Fri Aug 19, 2011
It sounds like the short sale negotiator is going to have to take it up a notch with the second lien holder. The first needs to approve the short sale and they may not approve the change in commission. The second wants that extra 1% of the purchase price. But, what happens if the first does not want the second to get that 1%? At this point, I would escalate to the president's office at the second lien holder. Good luck.
0 votes Thank Flag Link Mon Sep 5, 2011
Ok kids there is more to the story on this file...we are not done yet!!!! The seller filed BK prior to the short sale being approved, so now there is an issue with that. We had to get an Abandonment to show the home was not included in the BK. So we got that all settled, now it seems as if there is a 28 day time period that the BK courts have in California that require them to take that time period for the seller to change their mind. The seller in this case is Bank of America....there seems to be no way around that time period. Has anyone had experience with this type of transaction. In my career this is my first. ( I have the buyers on this one.) Any help or guidance would be great...I feel like my hands are tied on this one.....
0 votes Thank Flag Link Fri Sep 2, 2011
Hi Kids,

It appears that this may be over by this week! I appreciate all of the support and input you have given me. Bottom line the buyers deserve to be in their home! Dear Mr. Bank, the file that you have on your desk is not just a stack of paper it is someones life that you are playing with!!

Thanks again guys!!

Jodi Bettarel
HomeSmart Real Estate
Temecula, Ca
951 536-1374
Jodi@Homesmartca.com
0 votes Thank Flag Link Mon Aug 22, 2011
You guys are all Great! Thank you. It makes no sense to me at all. The second even got the amount they requested, so why should they care. Listing agent and I have split some costs already in regards to the HOA delinquency, I wrote a check for $300, just in hopes to close the deal, and now this mess. At this point I will take the 4% just to be done. Both loans have been approved since the 1st of August. Listing agent seems to be doing all that he can. I want to make some calls myself but I do not want to step on any toes or cross the lines, but at the same time, my concern is to my buyers who just want keys. They do not care who gets paid what amount so why do they have to wait for something like that.
Thank you for your help, suggestions.
Much appreciated, Jodi
0 votes Thank Flag Link Fri Aug 19, 2011
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