Short Sale Commission Squeeze
This just in from the Short Sale Trenches…
In several of our recent Short Sale Negotiations the lenders have been trying to squeeze the commissions paid to real estate agents on the short sale out of the transaction and HUD-1.
In particular, when we were buying under an LLC or other entity that was obviously an investor buyer, the lender tried to refuse to pay any commission based on the argument that “the agent did not do any marketing for the property”.
Nice try!
Here’s how we countered and got the commission approved: We pointed out to the short sale lender that real estate commissions are not “marketing fees”, but they are paid for representing the buyer and/or seller as a licensed real estate agent.
Since there are serious liability issues attached to agents representation, we asked the lender to check with the board of realtors and the state association of realtors about the liability they are getting themselves into when they force the seller and/or buyer in a short sale transaction to be without agents representation.
As I mentioned before, we got the agents commission promptly reinserted into the HUD-1 and approved for the short sale.
Are you running into similar issues with ridiculous demands by short sale lenders?
I’d like to know about that! Please feel free to comment on this story and share your own experiences below.
Talk soon!
Thomas Bartke
