Short Sales: Can A Bank Make A Realtor Cut His Commission?

Can a bank force a real estate agent to reduce his commission on a short sale? When you talk to a bank negotiator reviewing a short sale package, one of the first things you’re likely to hear is “you’re going to have to cut your commission or closing fee”. This is to be expected from professional negotiators trained to use scare tactics in an attempt to minimize a bank’s losses. As of March 1, 2009, Fannie Mae loan servicers cannot require real estate brokers to reduce commissions below 6 percent as a condition for a short sale approval. Even without this recent rule change (which banks often ignore anyway), banks have no authority to alter the terms of a listing agreement, which is a binding legal contract.

Nobody can force an agent to lower his commission, but a bank rep can try to bully an agent or broker into lowering it voluntarily. Here are some of the phony reasons and intimidation tactics bank reps often cite or use to get an agent to lower his commission:

1. “The investor guidelines don’t allow us to pay more than X% for a commission.” Investor guidelines have no bearing on the legal contract a broker signs with a seller. The bank can’t cut your commission, but they have a huge incentive to try to scare you into doing it yourself.

2. “We’re not or our investor is not going to pay for that.” The reality is that in a short sale, the seller’s lender is not paying for anything. The seller’s lender actually receives a check at closing-the buyer or the buyer’s lender actually pays for everything.

3. “If you won’t lower your commission, then the seller will need to get another agent.” It’s up to the seller not the bank to choose an agent to represent them. If someone says this to you, turn the conversation around and ask the bank rep “Are you suggesting that the seller break the legally binding listing contract they signed?” They usually back off real fast.

Real estate is a people business and Realtors are accustomed to trying to make everyone happy. For this reason, agents frequently give in too quickly to unreasonable demands and banks know and exploit this tendency. When you stand up to the bank and calmly explain that under no circumstances are you going to lower your commission, the bank will normally give in. If the bank does not give in, tell them that they can continue paying the taxes and insurance on the property for a few more months or they can get this bad mortgage loan off their books by honoring the terms of your listing agreement.

Why should you accept a lower commission for doing more work? As soon as you start reducing the commission you are contractually owed, the bank is likely to ask you for a bigger concession later on. If the bank believes that they can take advantage of you, they will! Take your stand at the beginning of the negotiation. Banks usually back down-sometimes immediately, in other cases it may take some time. Regardless, as long as you have a good working relationship with your client, you can wait for the bank to come to its senses. Miraculously, banks tend to be much more cooperative and less likely to try to cut commissions the closer a property gets to a foreclosure sale, so stand your ground and get paid the amount that you have earned and are entitled to receive.

Know More About Prepaid Legal Services and Its Marketability

The idea of the home business has only been strengthened with the growth of the internet and the online marketing environment. The only issue in regards to starting an online home business is in finding a demand that needs to be met online and then efficiently marketing that demand to increase your sales.

For those individuals who are not looking to design their own business and are instead interested in making money off of a system that already exists and has proven to be successful, then prepaid legal services is for you. The industry of law is in its highest demand in history as courts are overwhelmed by the multiple legal issues individuals are turning to the court to resolve.

Every person will one day require some form of legal support and realizing this will allow an individual the understanding of the solutions offered by it. The monthly affordable payments associated with a prepaid legal plan are highly preferred in comparison to the thousands of dollars an individual would pay for an attorneys services only once.

The opportunity to make money in the prepaid legal services environment arises with the ability to make commission based on the individuals you sign up to receive this fantastic service. It offer a large variety of legal services including preventative legal service, motor vehicle service, trial defense service, tax audit service, legal shield, as well as twenty-five percent off any service that is not included in the original services. The marketability of the it is high because it is a system that is ideal of any individuals current or future legal situations.

Selling a service to individuals may not be for everyone, although every individual does wish to attain the rewards available in the prepaid legal industry and now this is possible. The prepaid legal services plan has combined with the Blast Off system of online shopping. The Blast Off system is designed to provide shopping opportunities to individuals who desire to save money when shopping on the internet. This is a free service offered by Blast Off making it marketability very simple since it requires no investment from members that you sign up.

As the marketer you will make a commission from the purchases the individuals you signed up make through the Blast Off system. To even future boost your advantages, if one of your members decide to utilize the it offered on the Blast Off website you still receive the commission as if you sold it yourself. So now as a online marketer for prepaid legal services you are making commissions on the sales made through Blast Off in addition to the commission made with prepaid legal with little to no effort on your part.

How To Bargain On Real Estate Commissions

Sure most real estate brokers will charge a standard commission, but you just never know, you may be able to bargain them down to a better price. The general trend lately has been for these rates to come down, but it is worth trying to get them even lower if you can.

Legally, commissions have to be up for bargaining otherwise they could be prosecuted for price fixing. With regard to real estate commission, just getting a percentage point off is worth it.

Once you have made up your mind to bargain on commission, you need to do some analysis so that you know what general prices are at the time. Because it is your house that they are making money on, you have a bit of leverage.

You should ask several brokers to give you a commission quote. Then you can use these figures to secure the best rate. Also, by finding out as much as you can, you may find more information that will give you even more leverage.

Going online is probably the best place to find all the information you will need to bargain on commissions. The web has increase competition between brokers, and it is the perfect place to find out what is happening in the market at the time.

Another good thing to do is to offer your broker a variety of rewards to ensure you get a lower rate. For instance, you could offer a cash amount if your place sells within a time period, or if it goes for a set amount.

If after all this, you still cannot get a cheaper commission rate, then you need to see if you can find a broker who has a cheaper flat rate. Usually, these can be found online, they often save money by not having physical offices.

The cheap ones will often let you select which services they will do. If you do this, then you can cut back where you want and save some cash.