Hi Lisa,

Rule #1 in real estate: All commissions are negotiable. This goes for all parties involved. Certain conditions apply, but this is just about as clear a rule as you're going to get.

Banks had much better attitudes before the government bailout. They were more willing to deal on properties and take losses. They created this mess (along with buyers) but did not want to be left holding the toxic assets. When the government bailed them out, they immediately changed their tune and became much more difficult to deal with in negotiations for short sales, REOs and loan modifications.

GOOD LUCK!

Scott Miller, Realtor®
Estate Specialist
Commercial RE
Business Broker
Realty Associates
561-716-4060 direct
561-451-9377 fax
http://www.LoveBoca.com
http://twitter.com/ScottSellsFL

Lisa,

That is a good question. There are actually 2 parts. As far as the commission is concerned, the bank can sometimes reduce the commission. A new ruling states that if a loan is Fannie Mae or Freddie Mac from the short seller, the lender must pay 6%. Most lenders ever go below 5%. Why would they? What realtor is going to show homes and try to negotiate if they're going to receive next to nothing?

As far as the payoff is concerned, there are 2 numbers the lender uses to consider a short sale approval. These are the offer price and net to the lender. The offer price is just that. The net is the amount the lender will receive after all sales commissions and expenses are paid.

A loose rule of thumb is if you can determine the current market value, a lender will usually accept an offer of about 10% less.

My company specializes in short sales for sellers and buyers in the Palm Beach County area, particularly Jupiter, Palm Beach Gardens and West Palm Beach. If you'd like more information visit our blog at http://SouthFloridaRealEstateReport.com for many articles and videos relating to short sales in Florida.

I hope this helps.

Rodney Forbes
Realtor/Broker
Forbes Realty of South Florida
561-337-4810
Rodney@ForbesRealtyOnline.com

The bank can set their own realtor commission, however in the short sales I have done, I have received full commission, even when I had both sides. The banks seem to do whatever they want though. The agent can try and fit it, but it's most likely a lost cause.

However, I think they (banks) are realizing that it may be a mistake to decrease commission, because there are lots of agents out there refusing to work short sales... creating a lose-lose situation. I have also read that legislators are working on a short sale initiative to standardize short sale procedure. However, it was supposed to be released in August... and well, am I really surprised??

I do not agree with your logic regarding the buyer paying the commission. The commission is paid from the funds generated by the sale, regardless of if it's from the bank or the seller. So, in the transaction the buyer is debited, the bank credited. The bank then has to pay the fees that were charged for the sale... whether they pay out of pocket and up front or from the proceeds-- is the same thing.

The purchase price is the amount the buyer is willing to pay...total. In any transaction, short sale or not, the same thing would be happening.