Question Details

Jeff Silhacek, Real Estate Pro in Mesa, AZ

When is the commission earned on REO's? Full list, clean offer from a ready, willing and able buyer on a

Asked by Jeff Silhacek, Mesa, AZ Fri Feb 15, 2008

bank owned...did I earn the commission?

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Answers

6
Jeff, REO and assett Managers are playing a game which unfortuneately many Realtor/Agents are going along with. I had an offer come back after two weeks with an addendum, NOT SIGNED by the creator of the addendum, stating, "Upon Buyer's acceptance of this addendum all time frames begin". We did NOT have a signed contract from all partires but the REO wanted all time frames to begin!! That's THEIR world and we as Realtors go along with it. It keeps the door open just incase they get a better offer. Sorry, WE didn't have a ratified offer!!
But when it closes you get paid. Fat chance any other way.
1 vote Thank Flag Link Mon Feb 18, 2008
Hi Jeff,

Real estate law tells us that commission is earned upon mutual acceptance... but unfortunately we all know better. Reality, however, is that we all have to get to closing before receiving a commission.

It sounds like you may have written a full price offer with a well-qualified buyer and you feel like you've earned your commission. Unfortunately with REOs, bank owned, short sale and almost every other type of transaction you will need to work your way to closing first.

The only exception I've seen is a few new construction sellers in the Seattle area that are offering to pay the commission as soon as the buyer's earnest money becomes non-refundable. Typically this might happen 30 days after mutual acceptance.

Hope this helps!

Dave
0 votes Thank Flag Link Wed Dec 24, 2008
Even if your buyer offers full price on a clean offer the seller is free to turn it down without paying you a commission. the only time the seller might get into trouble is if someone can show there is racial discrimination going on.
0 votes Thank Flag Link Sat Feb 16, 2008
This question does come up from listing agents.....not typically buyer's agents. When a listing agent lists at X, has offer at X or better then seller refuses to sell, that is when commission claims usually arise. Even then, it would be unusual for a broker to agree to the trouble unless it was a multi-million dollar deal. Even then, not an easy task and only worth it for the publicity in a David an Goliath scenario. Try the tactic on for size in the average residential market and ....you'll go broke and spoil what good reputation you, and your broker, may have.

Make that claim to the asset manager with an REO property as a buyers agent and you may be forever doomed in the REO market. Not only that but, the agents involved at the other end of your deal will surely remember you. If you are active in your market area, you may just want to suck it up and move on. The REO market can be very competitive and you would not want to miss the opportunities available to you. If you are not active, have nothing to lose and...your broker feels the same. Go for it. Just keep us posted on what happens.
0 votes Thank Flag Link Sat Feb 16, 2008
How do you get paid on conventional sales? When it closes right? Why would this be any different. Get it closed!
0 votes Thank Flag Link Sat Feb 16, 2008
When it successfully closes escrow. Bank owned homes frequently sell for more than the listed price. Contracts are only ratified when you sign the banks addendums and then they are returned by the bank....7-14 days after an offer is "accepted". Until then, you are SOL.
0 votes Thank Flag Link Fri Feb 15, 2008
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