Thanks to Brian, Michelle and Aaron for your answers.

Yes, we expect things to be unpredictable. We wrote up the purchase contract using a standard agreement provided by a local title agency.

Our initial offer was priced 3% less than what we thought the home would go for if we were using a realtor, so we are not hurt if the bank accepts the offer as is and we get zero commission kicked back.

Again, thanks for the thoughts. I tend to agree with Brian's logic that banks will consider total offer minus fees. Though, most realtors tell me banks pay out realtor fees from a different part of the bank and so the negotiator doesn't care whether someone brings a realtor to the table requiring commissions.

All-in-all, interesting process. Thanks again.

Chris

I'll add further support to what's already been said. You will not get the commission because you're not an agent. The lender wants to net a specific dollar amount and anything else they can get is icing on the cake. If you had representation that agent would be paid a reduced rate but since you're representing yourself that's just more money they can pocket.

Here's an example of a recent short sale we were dealing with. We were representing the seller and had an offer accepted by the bank. The buyer happened to be a realtor and it was properly disclosed in the contract. The bank was willing to pay all commissions...until the last minute when they were doing a final review and noticed that the buyer was an agent and was going to get paid a commission. Even though they had already agreed to the price with full commissions they were not willing to pay the buyer agent a commission. The deal went dead.

The only consistant thing with short sales is that they are not consistant and they don't always make sense!

Good luck!
Michelle

"Aaron, so when you say for your own personal account, do you mean when I am buying a house for my own dwelling?

That is the case in this situation."

Right. Thats how I understood it.

Good luck!

Chris,

If you're not an agent, I would say it's highly unlikely you'll get the lender to give you the commission. This is probably an instance where representing yourself is not going to save you anything.

In a short sale situation, the lender is going to look at the HUD and in the section that details who the commission is going to, they are going to see only one brokerage listed. They will in all probability cut the listing agents fee significantly since both sides are being paid to one brokerage.

The lender does in fact take into account the commissions on a short sale. They take into account any fees that reduce the net below what they have determined to be acceptable. At that point they will start making cuts, and commissions are usually one of the first line items they go after.

Technically, the fees for a listing are an agreement between the listing agent and seller. The listing agent and seller agree in the listing contract what percentage or amount they are going to offer the selling agent. If you are representing the seller and are not a licensed agent, you are not a party to that contract and are not considered the selling agent.

Do you know how your are being represented in the purchase and sale agreement? If you let the listing agent fill out the purchase and sale agreement and used one of our association's forms you are most likely being represented as either a limited dual agent without an assigned agent or the brokerage is acting as a non agent on your behalf.

In this case the listing agent is also the selling agent.

Bottom line is demands usually fall on deaf ears with lenders in short sale situations. They are going to do what policy mandates.

Aaron, so when you say for your own personal account, do you mean when I am buying a house for my own dwelling?

That is the case in this situation.

Thanks for adding the rest of the details which is quite helpful.

Chris

Chris,

Good question! In Idaho, to get compensated for the purchase and sale of real estate you have to be licensed, UNLESS it's for your own personal account.

The bank is going to factor their decision based on the estimated HUD-1 and their 'net proceeds'. Brokerage fees are certainly a factor in the banks decision whether its 3%, 6% or 99%.

The HUD-1 is commonly created and sent to the bank by the Title & Escrow Company who is a third party working from a list of 'escrow instructions'. You should be able to prepare supplimental escrow instructions and send them to the Title Company requesting how you should be paid. The Title Company then prepares the HUD-1 with those instructions and fees being paid to you.

My advice would be to contact the Title Company and ask how best to get the 3 percent.

The bank doesn't have to pay you though....or, any Realtor for that matter. The short sale is ultimately their decision and they aren't required to pay anyone for their services.