Agent takes commission hit to close short sales
Letter to the Editor
By Inman News, Thursday, October 27, 2011.Re: 'Don't sell yourself short on real estate commission' (Oct. 24)
Dear Editor:
I agree with this article, but recently I have been faced with cutting my commission because the owners/sellers need as much from the house sale just to break even. So I won't lose the sale, I take (the commission) at a lower percent, but I take the hit, and not the real estate company, which I also don't find as fair.
Maryanne Bruno
Agent
Broomall, Pa.
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Submitted by tony khatemi on October 29, 2011 - 5:10pm.
Unfortunately the banks/lenders play the power game. In shortsale situation many of the times I had to cut my commission to get the approval from the lender. In 2009 and early 2010, the lenders would go after the commission pretty heavily especially to the listing agent.
When you have a screaming buyer and a property owner that soon will be homeless and ruined credit, what are you supposed to do? Many of the transaction took nearly a year to close and most of them I had to give up some of the commission. In most cases the lender would come back to the table with a NETPAY that was greater than the estimated closing or the NETSHEET and would leave no choice for me but to have me take a cut on the commission to make the deal happen. Sometimes I shared the losses with the buyer's agent and but most of the time I took the hit personally.
I am not sure if this practice is still going on but I decided that it was not worth my time and I pulled the plug on all my shortsales. As a matter of face the last 5 listings, I gave them to another agent and went about my own business. Did not want to deal with all the work and then lack of appreciation or the commission I was making on the deals. Lenders had a TAKE IT OR LEAVE IT attitude back then. Wells Fargo was probably the best of the bunch and much easier to work with. Bank of America would not move from their position. Other smaller lenders would go straight for the commission.
Lenders should never be able to dictate to agents what they are willing to pay unless it is a REO property. This strong arming practice is absolutely uncalled for.
Submitted by John Woodward on November 19, 2011 - 9:01am.
We've been hit pretty hard with short sales and foreclosures here in south Florida. I always had this "feeling" that if we boiled down our efforts into a cost per hour, flipping burgers might pay better on an hourly basis than working the short sale.
Our MLS has the ability to identify a "regular sale", a foreclosure, and a short-sale. What I found is 62% of the under contract listings are short-sales yet only represent 20% of the sales this year.
So from a business prospective you have to ask the question, why are we spending 62% of our time to capture 20% of the closed business? This (of course) assumes we spend as much time on a short sale as any other, that the "pay" rate is the same and a short sale in under contract in January would have closed by November 11 (when I ran this). I am sure we all have our stories and "feel" how different the time, effort and pay goes for a normal sale vs. a short sale.
Take a look and your comments are always welcome.
http://www.sarasotaone.com/blog/sarasota-short-sales-and-foreclosure-sta...
John Woodward
Broker/Owner
Sarasota Real Estate Group
Sarasota, FL