New Short Sale Guidelines Encourage Sweeping Changes to Short Sale Process

[Smiling JOe]

So the bank is taking a loss in the tens or hundreds of thousands, the companies who bought the repackaged loans are taking a loss (and spreading it through the stock market), the homeowner is taking a loss and losing their home, the taxpayers are forking over billions to clean up the mess and writing checks to everyone involved along with ponying up an $8k tax credit, millions of Americans are unemployed and homeless, but the unfair part of it is that realtors should be able to charge more than a 6% commission on a short sale?

Sorry, no sympathy here.

NO, NO, NO. The unfair part is that a third party is trying to dictate a separate contract between two other parties.

By the way, Realtors have taken a huge hit as sales halted, prices decreased, and now on the short sales which require the most work, the bank which has no signature on the contract between a seller and a Realtor, is trying to dictate what is happening outside of its authority. There is your problem.

 

[Smiling JOe]

...so if you believe a short sale warrants a higher commission because it is ten times more work--did the realtors drastically cut their commissions when they were sitting in their pajamas and taking orders for condos over the phone during the bubble??.....didn't think so.

.

I don't recall saying that. If I did, it was not clearly communicated. Other agents can do what ever they want to do, but for me, I don't believe in giving a discount to the lender when more work is required. I simply want my full pay for getting the job done. If I have a contract with the bank, that is one thing, but my contract is not with the bank.

 

[Busta Hustle]

Scooter, which part rewards the Realtors? I have worked short sales, and they require ten times more work, and ____________
the lenders give us the shaft.

so which part of the pimp-ho relationship did you not understand?

 

[scooterbug44]

I guess I just think it sounds greedy.

Taxpayers are forking out $3.5 to $11.5K in incentives for each short sale, banks are losing tens or hundreds of thousands, but god forbid they limit your commission to only 1-3% more than many realtors in the US are making.

 

[passin thru]

I guess I just think it sounds greedy.

Taxpayers are forking out $3.5 to $11.5K in incentives for each short sale, banks are losing tens or hundreds of thousands, but god forbid they limit your commission to only 1-3% more than many realtors in the US are making.

We've maybe drifted a little off-point, IMO.

If I'm reading them right, the new regs don't set the commission at 6% or any other rate -- that would indeed be illegal price-fixing. The regs do say that the bank won't interfere with the commission agreement between seller & Realtor -- and this is proper.

If you, the owner/seller, don't want to pay what you feel is a greedy rate, don't hire that Realtor, OK?

 

[Bobby J]

I guess I just think it sounds greedy.

Taxpayers are forking out $3.5 to $11.5K in incentives for each short sale, banks are losing tens or hundreds of thousands, but god forbid they limit your commission to only 1-3% more than many realtors in the US are making.

The reason it sounds greedy to you is because you don't actually do it for a living. If you really knew what was involved it would not sound greedy at all. We are paid per transaction like any commission sales person. Our work sometimes begins months and even years before we get paid on a transaction.

 

[SHELLY]

I don't recall saying that. If I did, it was not clearly communicated. Other agents can do what ever they want to do, but for me, I don't believe in giving a discount to the lender when more work is required. I simply want my full pay for getting the job done. If I have a contract with the bank, that is one thing, but my contract is not with the bank.

(1) Who is responsible for paying the realtor's commission? The Seller, since the seller signs the contract with the Realtor.

(2) Who then is responsible for paying the realtor's commission if the "profit" from the sale is negative-zero? ____________

.

 

[Bobby J]

(1) Who is responsible for paying the realtor's commission? The Seller, since the seller signs the contract with the Realtor.

(2) Who then is responsible for paying the realtor's commission if the "profit" from the sale is negative-zero? ____________

.

1. It changes per transaction in a short sale. Typically the lender pays it in a short sale and then sends the seller a 1099.

2. We are not paid on the "profit" of a sale. We are paid per transaction.

 

[Smiling JOe]

Scooter, If you contracted a plumber to come repair your pipes, and you and the plumber agreed on a rate of $60 per hour, then after the work was done, the plumber's union came in and said that $60 per hour doesn't work. Instead, the price you have to pay is $70 per hour. What would you say?

This example is reversed but that is essentially what happens to us. We have an agreed amount with our customer and a third party comes in after all the work is completed and changes the rate, which costs us more money. It isn't about greed, unless you are talking about the banks being greedy trying to squeeze money out of everyone for their own mistakes of not qualifying the people to whom they loaned money. As passin' thru said, if you don't like the terms of your Realtor, find a discount broker to handle your short sale. You can shop for prices, just like you do with groceries, but if you are looking for quality, you might consider other aspects than just the rates. For example, you might look for experience, professionalism, ethics, knowledge, etc.

 

[sadie1]

Bobby are all short sale loses 1099'ed to the former owner? Lets say i walk on my home i bought 3 years ago and the bank ends of short selling it for a total 200k lose. Will they automatically send me a 200k 1099? if so is there anyway the homeowner can write off the 200k lose against the income to negate any taxes due the irs? i find it hard to believe when a homeowner leaves a $3 mil home and it sells for $2 mil he's paying tax on a $1 mil 1099. there must be away around it. i know it only applies to a second home.