LEARN ALL YOU CAN ABOUT OUR INDUSTRY: IT WILL WORK TO YOUR BENEFIT

June 6th, 2012 at 7:02 pm

As you know, we spend a lot of time providing you with information and training about all aspects of your business. We do that for many reasons, but at its core is our belief that the more you know and the more professional you are, the more successful you will be. We recently had a short sale that was a perfect example of this belief.
As you know, and as we have shared in the past, Fannie Mae limits the lender’s ability to reduce commissions in short sales arising from loans they own. Specifically, since March 1, 2009, Fannie Mae’s guidelines have stated that “closing of preforeclosure sales may not be conditioned upon the reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales price…” In other words, on a Fannie Mae loan, the lender may not cut the commission below 6% if that is what the listing agreement provides.

With that rule in mind, one of our agents recently represented both sides in a Fannie Mae short sale where the listing agreement had a 6% commission. On May 17, he got an e-mail from the bank’s negotiator which said the deal had been approved and attached the Approval Letter. In both the e-mail and letter, however, the commission was reduced to 4%, “per investor’s requirements.” Note that the investor’s requirements were referenced but nothing was said about Fannie Mae. In response, after thanking the negotiator for their assistance on the deal, our agent wrote as follows: “You state below that the commission is at 4%. Upon further review, the loan is owned by Fannie Mae. It is my understanding on Fannie Mae loans that commissions are not to be below the level of what the listing agent and borrower negotiated.” After attaching the listing agreement showing a 6% commission, our agent asked the negotiator to look into “this oversight and hopefully have it corrected.”

In response, the negotiator first responded that the “commission will remain as approved. As a dual agent, 4% is the max.” The next day, however, we received the following: “I went to my contact at Fannie and they approved the 6% commission. Attached is the updated approval.” In other words, by knowing the rules, and pointing them out to the bank, our agent earned an extra 2% on this deal. Remember, it would have been easy to accept the 4% and move on. After all, most of us believe that commissions are limited when we act as a dual agent on a short sale. However, by being on top of his game and business, our agent knew that the discount was not allowed and fought for his money.
There is one other thing I want to point out about how this issue was handled. Please look again at the quotes from our agent above. At all times, our agent was polite and professional. He always thanked the negotiator for her help. He politely pointed out the mistake and asked that the “oversight” be corrected. There was never any anger or emotion in his e-mails and he never insulted the negotiator. This is another example of something we always tell you: act professionally and you will be more successful than the “jerk.” People like to be treated professionally and will respond more positively when they are. So, know your business, keep yourself up to date on all new developments and use that knowledge when necessary. It will help you get more clients because you will be the best at what you do, and it will help earn you what you deserve, like in the case above.
As always, contact us with any questions you may have

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