Foreclosure in 94582>Question Details

Rockstar, Real Estate Pro in 93611

I have a short sale listing with Bank of America it is currently in phase 3 negotiations, the offer I submitted has been accepted. Now the bank told

Asked by Rockstar, 93611 Mon Dec 7, 2009

me they are willing to pay the buyers agent commission but not mine because I am related to the seller. First Ive heard of this. What do I do? Signed,Frustrated

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From Mortgagee Letter 2008-43: http://nhl.gov/offices/adm/hudclips/letters/mortgagee/files/…

Use of Real Estate Broker – The services of a real estate broker/agent must be retained to market a property within 7 days of the date the approval to participate is granted. The broker/agent must market the property within the pre-established time frame and list the property for the established sales price.

**The broker/agent selected should have no conflict of interest** with the mortgagor, the mortgagee, the appraiser or the purchaser associated with the PFS transaction. Any conflict of interest, appearance of a conflict, or self-dealing by any of the parties to the transaction is strictly prohibited. **A broker/agent shall never be permitted to claim a sales commission** on a PFS of his or her own property or that of an immediate family member (e.g., spouse, sibling, parent, or child).

I hope the information helps you in some ways...
1 vote Thank Flag Link Mon Dec 7, 2009
I agree with the suggestion to get your broker involved. If your problem is due to pure innocent ignorance on your part, your broker can make the case to the lender that a broker cannot work for free. The liability of the transaction still rests with you and your broker. If there is a complaint made by the buyer, you and your broker will be included in the complaint.

As an aside, how do E & O insurance companies look at a situation like this? I can’t believe that they are thrilled insuring and agent and broker for a transaction for which there is no offsetting income. I can’t believe that you broker wants to pay premiums for coverage on a transaction that generates liability with no offsetting income.

Please let us know how this comes out. Great learning experience for all of us.
0 votes Thank Flag Link Tue Dec 8, 2009
Hello Rockstar,

I would speak with your Broker and get them involved in this matter. The listing belongs to your Broker. Not the agent. I'm guesing that your Broker is not related to the seller. A buyer was procured and services rendered. Therfore, a commission is due to your Broker and yourself. Furthemore, was this information disclosed to the bank early on in the listing agreement? If so, the banks credablity is damaged further. It's my opinion the Bank is simply looking to pull a fast one at the last minute. Good luck!

Matt
0 votes Thank Flag Link Tue Dec 8, 2009
It is my understanding that all lenders make this provision and you are probably out of luck. The lender wants to be certain that this is an "Arms Length Transaction".

Bernard Gibbons

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Bernard Gibbons, Realtor, e-PRO Certified Internet Specialist, DRE License # 01331583
J. Rockcliff Realtors, 15 Railroad Avenue, Danville, CA 94526
Phone (925) 997-1585
bernard@bernardgibbons.com

See all homes for sale in Contra Costa and Alameda Counties
at http://www.BernardGibbons.com
0 votes Thank Flag Link Tue Dec 8, 2009
I have heard this before. Many Banks are wanting to be assured that the seller will receive no funds at closing. I would probably have my broker represent your listing contract to BOA and see if that will convince them that you are not kicking anything back to the seller. I really believe that the "arms length transaction" shouldn't be for the agents involved. I had the same issue come up when a Buyer was a Realtor, from another company, who wanted to buy a short sale listing I had. I explained that he was representing himself in the purchase, but by not allowing for the coop fee to be paid, we might lose the buyer. The Bank did concede the point and we are scheduling the closing for January.
Web Reference: http://www.NwLineHomes.com
0 votes Thank Flag Link Mon Dec 7, 2009
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