Commission Payment Help!!!!

Asked by Brandi_salazar, , Thu Jul 26, 2012

My buyer is purchasing a HUD Good Neighbor Home. The lender (FHA loan) told me they won't allow for a commission to be rolled into the loan. The buyer doesn't have that kind of money. Do you have any ideas?

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14
Monica Atkins, Agent, Albuquerque, NM
Sun Jul 29, 2012
I have done GNND homes and had the commission rolled in. I would check with another lender.

Monica Atkins
440-2990
1 vote
Darrell D. D…, Agent, Schertz, TX
Fri Jul 27, 2012
Brandi,
I read each of my colleagues responses and your response also. One thing struck me as odd - you said it wasn't in the MLS, but then you said you spoke to the HUD realtor. Obviously if the home is in the MLS, you can go after the disclosed commission. But, if it was only on the HUD website, then that's slightly different. However, when you fill out the contract offer to send to HUD, part of the offer includes Broker compensation....Did you submit an offer with compensation included?
1 vote
Annette Law…, Agent, Palm Harbor, FL
Fri Jul 27, 2012
Looks like this home is not to be.
Too good to be true....what a shame.

We really need to be vigilant when our buyers go rogue and find stuff on 'too good to be true.com" or other shadow venues especially RtyTrc.. We truly must have that 'minimum compensation' conversation.
1 vote
Linda S. Cef…, Agent, Franklin, WI
Fri Jul 27, 2012
Sure hope you get the answers you need. I never heard of this, so thanks for bringing it to our attention.
1 vote
Brandi_salaz…, Home Buyer, ,
Thu Jul 26, 2012
This is a bid property so it wasn't listed in MLS. Only on the HUD website under a special program. The HUD realtor said the commision is not being paid by the seller, so the commission needed to come from the buyer. Never had this problem before and not sure how to handle this. Thinking of suggesting to my client, try a different loan?
1 vote
Brian Fossa, Agent, Albuquerque, NM
Thu Jul 26, 2012
HUD Good Neighbor homes are generally advertised on the HUD sponsored website, not the MLS, so there may be no offer of compensation. If it was in our MLS, there should have been an offer of compensation (MLS requirement). If not, you are pretty much bound by whatever terms HUD offered, if any. You might just be stuck being the Good Neighbor Realtor, unfortunately. Wish I had better news!
1 vote
Hello Brian and Dawn, what a great answer; reminds us to read everything given to us but then again isn't that what we tell our buyers and sellers. Time to start taking our own advice.
Flag Mon Jul 30, 2012
Ann Brice, Both Buyer And Seller, Wilson, NC
Fri Aug 3, 2012
HUD pays a commission unless something has changed recently. HUD has their own offer form and in it you have to specify how much commission you want and you have to calculate and state in the offer what HUD would net after paying the commission. You could ask for up to 5% commission. For example, if you said you were bidding $100,000 and wanted a 5% commission, the net to HUD was $95,000. If you asked for a 3% commission, the net to HUD would be $97,000. Obviously, the amount of commission you demand affects the net result and therefore the competitiveness of the offer. (One of my clients picked up on this and I had to negotiate with him, the commission that I submitted. ) You can also ask for closing costs in the offer, but again this is deducted from the offer price and affects the net price to HUD.

HUD pays the commission so I don't see how this is different from a typical MLS sale from the lender's perspective. I think you need to talk to more lenders and maybe research the HUD site to understand the process more:. Here is a link to a document on the bid process:

https://www.yardiasptx11.com/hudreo/docs/HUDHomestoreBidSubm…
0 votes
B, , l
Thu Aug 2, 2012
When we sold our FHA home, the realtor got her commission. He deserved it. The buyer did not pay for the commission, it came out of our selling price. Talk to another bank that you have dealt wtih and find out about their FHA loans. Maybe they changed the law this year. Good luck.
0 votes
Judi Monday,…, Agent, Green Valley, AZ
Sun Jul 29, 2012
First I've heard of not being paid a commission on a HUD home but then again I've only sold 2 HUD homes and both times I was paid. Definitely let your Broker know what's going on. Best of luck.
0 votes
Barbara Gran…, Agent, Anaheim, CA
Fri Jul 27, 2012
Who actually procured the property? You or your buyer? Absent a buyer/broker agreement you may be out of luck. Review the situation with your broker immediately to see if there are any viable remedies.
0 votes
Leigh-Jo Anz…, Agent, Albuquerque, NM
Thu Jul 26, 2012
Hi Brandi,

Do you have a buyer broker agreement with your client that addresses your commission if it is not paid for by the seller?

Leigh-Jo
Syan Real Estate
Call/Text: (505) 730-8181
Web Reference:  http://www.Syan.com
0 votes
Steve Quinta…, Agent, Albuquerque, NM
Thu Jul 26, 2012
Brandi, Good luck and please keep us informed about how this story ends.
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Thu Jul 26, 2012
What do you mean buy rolling a commission into a loan? Am I missing something? Our commission is paid by the seller normally and our service is free to a buyer.
0 votes
Alan May, Agent, Evanston, IL
Thu Jul 26, 2012
wasn't there a co-op commission offered in the MLS? If the co-op commission was offered by the HUD home, then they are responsible for paying it... NOT your buyer, so it needn't be rolled into the loan.
0 votes
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