Saxon Mortgage Short Sale Approval Terms

Ray,

I appreciate the commission dialogue. What about the term that if we go past the approval validity date, they require escrow to deduct a furhter 1% from the agents commissions?Rick36

On one transaction, the approval came back with the term that if the transaction did not close by the specified date, which was only 2-3 weeks from the approval date, the Realtor commission would have to be reduced.

My reply was that the Realtor commission is non-negotiable but, since the seller's side is all set to close, you might want to consider a per diem charge of $50 to the buyer as any delay would be caused by the buyer's side. The lender agreed and this is how the approval came through.

Ray

I have been working with a listing agent on a short sale that has a first(Saxon) and second (Lendmark), with a mortgage insurance company who is altering what the first trust offered. They actually cut the commission to 3% and said take it or leave it, as it is in stone. We argued back, but still no relief. The second was offered $1500 , otherwise they would be totally wiped out, but they said $10,000 or nothing. The lunacy in the demands seems crazier than last year. They might be responding quicker, but the requirements are getting harsher in my opinion. Anyone have a 3% commission demand? There seems to be no reasoning other than a bottom line net. If more money was brought to the table, the first indicated that anything above the bottom line net would be theirs to take. Any suggestions?

I never have or will cut my commission. My contract for commission is not between the bank and I. I don't have a contract with the bank. I have a legally binding contract with the seller. I always charge 6% on all short sales. This has been approved by Fannie Mae and Freddie Mac loans. The smaller banks will go after the commission which is wrong and not one of us in the field should agree to this. At the end of the day, is that worker taking less home in his or her paycheck? I think not.

I agree with RaytheRealtor's comment above. Well written Ray!

I hear that Bank of America is streamlining the process and it should be in place by September 1, 2009. That would be a blessing since all of their short sales are currently taking 5-6 months to close.

What a welcome relief.

DestinRealtor, Kelly Klein

Red Hot Realty

$3000 for commission total? you have to split 3k ?

Have you already sent in the offer to purchase or do you have one yet? Stick to your guns on the 6 % you cant go through the length of a short sale for peanuts.!! thanks

you need to find out if the 3% is a policy or if that is an attempt to get a certain net. If it is the net, then you might be able to move some numbers around and try to minimize the lowering of the commission. We also include, in the HUD, the expenses prorated out 4 or 5 months to cover the time it will take for the Lender to process the file. If the file is done before that then you will have extra numbers you can move around in order for them to get their net.

Arguing or letting the deal die because of commission can get you in some legal trouble down the line. No one wants to cut their commission but it is not worth your license or any legal battle. That is why some Lenders will insist on this point.

BTW-Saxon is a subsidiary of Morgan Stanley so the commission reduction is probably coming from an investor since I doubt Saxon owns any of these mortgages.

Become a CDPE Today

FHA guildlines say (up to) 6%

Ask for a supervisor - and stick to your 6%. Talk numbers and then let them do the talking

Hope this helps

Quoting Peggy ONeill:

FHA guildlines say (up to) 6%

Ask for a supervisor - and stick to your 6%. Talk numbers and then let them do the talking

Hope this helps

Peggy, that is incorrect. only Fannie Mae and FreddieMac allow 6%

Quoting Rick36:

Ray,

I appreciate the commission dialogue. What about the term that if we go past the approval validity date, they require escrow to deduct a furhter 1% from the agents commissions?Rick36

Rick, this is a simple argument to win. You tell the negotiator that you will not be subject to a "shame-on-you-for-not-closing-on- time punishment" fee. Tell them that If this short sale fails to close and then you have to find a new buyem then the commission will still be the same. On the other hand, if it is the buyer that is holding up closing then the bank may be entitled to a per diem charge.

Sydney said:

"We also include, in the HUD, the expenses prorated out 4 or 5 months to cover the time it will take for the Lender to process the file. If the file is done before that then you will have extra numbers you can move around in order for them to get their net. "

Please explain, Sydney. How does this work? What specific expenses do you include? This sounds like a tactic we should all be using, but it wasn't covered in the course, that I remember.