Home Selling in Katy>Question Details

Sidney55, Home Seller in Katy, TX

what if sale is pending (waiting for bank to okay short sale) but agent/broker agreement expires with seller. Does commission have to be paid?

Asked by Sidney55, Katy, TX Sat Jun 5, 2010

Selling home for my senior citizen parents.

Agent has treated me like a step child, minimal professional help or input. Getting email responses etc is like pulling teeth. I'm the one that did research on my own to make decision to drop price...they just said "Whatever you want to do". They are HUGE broker but I am an extremely small commission in their world.
1 seller offer in over 8 months, even though our price is on lower end of homes in the area by dollar per sf. It is now a short sale, and it was a possibility from the start, and they said they are very experienced with this kind of sale but i probably know more than my agent. She didn't even know that there is a law to write off balance on a short sale. The broker is huge but agent they gave me is extremely inexperienced.
Contract expires soon and short sale is still pending bank response...what if i don't sign an extension, do i have to legally give them commission since I feel they did not deserve it.

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Hi Sidney55:

If the Agent wrote the offer, submitted it and is the procuring cause
then you have to pay. Sadly, if it is now a Short Sale, the banks are
covering the Short, so it will likely be negotiated down.

Clearly, it seems it is a regular sale now gone short sale.
Believe it or not there is a lot of work on the part of the listing agent to close a short
sale, even though it is not apparent to you.

Good luck.
Perry
0 votes Thank Flag Link Sat Dec 25, 2010
Yes, the Realtor is procuring cause and is due a commission, as long as the contract was written during the term of the listing agreement. If it's a short sale, the bank should be paying it, anyway. You, as the seller, won't have to pay it.

Please call with any questions.

Thank you,

Short Sale Department. LLC
561-361-1909
http://www.shortsaledepartment.com
0 votes Thank Flag Link Sat Dec 25, 2010
If the transaction closes, then yes, you would legally be obligated to pay the commission. It is unfortunate that inexperienced agents are allowed to conduct short sales. If this offer should be rejected by the bank and you are not in a binding listing agreement with the agent, you should be able to hire another agent. However, I realize that time may be approaching when a new listing agent will not be of much help and the bank will have foreclosure proceedings moving if you are behind.
0 votes Thank Flag Link Thu Jul 1, 2010
Sidney,

The commision on a short sale is paid by the bank. If you don't sign an extension you are out of contract. You have a buyer waiting in the wings and all of your paperwork is sitting at the bank with an asset manager reviewing your paperwork. Short Sales take a very, very long time and updates are long in coming we can call the lender every day and still no new status. You say the agent advised you from the beginning it would be a short sale so she probably had a different sales price in mind from yours when you first listed the property. It took you 8 months to agree? There is no law to write off the balance this is part of negotiating the short sale to not pursue you for the deficiency. You may be referring to the Tax Debt Relief Act as the name states TAX is better answered by your CPA who is a professional in this field not your Realtor.

I realize every state is different and rules vary, but I would think that if you don't sign an extension and list with another agency you will have to begin the process all over again and find a new buyer and send the new paperwork to the lender; basically start all over again.
0 votes Thank Flag Link Sat Jun 5, 2010
Hi, Sidney,

If you have a Sale pending, someone did some work for you to find a Buyer. If you have an issue with your agent, I recommend having a meeting with the Broker and agent, and spell out what your expectations are. Short Sales are very difficult and time-consuming, and full of frustration and just plain hassle. You might ask the Broker to assign an agent with experience and competence in short Sales to help your agent to complete the sale. Also, be sure that you get a letter from the lender which expressly agrees NOT to pursue a default judgment for the balance.

Doc
Web Reference: http://TellEllen.com
0 votes Thank Flag Link Sat Jun 5, 2010
Sidney - in my opinion, you have a signed contract that is awaiting approval from the bank - the bank will acknowledge who the parties are to the transaction if they indeed accept the contract, and they will be paid accordingly. The fact thay you may or may not be happy with the services rendered is not going to impact that in regard to that contract. You cannot arbitrarily decide at this point to remove the agent from the contract and take away their commission.

In addition, unless you have power of attorney for your parents, THEY, not you, are the principals in the transaction You may be advising them, but they are the sellers, not you.
May I assume there is also a buyer's agent involved in the sale?

Whatever commission is ultimately paid for this sale, if it takes place, will be paid to the agents listed on the contract. Your displeasure will not remove any agent from being in that position - extending the listing, or not, will not change the contract that is in place.

Now, as far was what you do after the listing expires, and whether you have the right to continue to market the home, is a question I will leave for an attorney to answer.

Good luck!


ps not to defend the agent as I certainly don't have enough information - the fact that she didn't know about the law to write off a balance on a short sale really isn't her area of expertise - in the event of a short sale, having an attorney advise you should always be recommended. Either an attorney or an accountant should be giving you tax advice.
Best wishes...........
0 votes Thank Flag Link Sat Jun 5, 2010
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