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In a short sale situation, I did not put in MLS how to divide the shortfall commissions but put that terms and commissions subject to lender’s approval.  Originally, I had 4% for me as a LA, and put in MLS 3% for BA. We have about 4k short.  The BA demands the full 3% wanting me to eat the all loss in commission.  I recommended 3/7 and 4/7 ratios for the whole amount to split, and the lender signed approving this. However, BA wants to go to arbitration, refusing this split. We closed the escrow but did not get to pay.  Escrow holds the money.

The night before closing date, escrow could not balance.  It was short $290 and she had a pad of $250, so I told her that she had enough to close. The following day, she faxed me a shocking note stating that she is short $1800.  I told her not to pay anybody until it is resolved but she said she has paid everybody already except the agents. Nobody wanted to share the loss, and she left me to hold the bag.  BA wants to go to arbitration.  Please help. I am a small independent broker against REMAX and their lawyers.

I requested several times that escrow gives me the business license and the E&O insurance but she refuses. She acts like a pet toward REMAX because she gets more business and ignored my requests on several occasions. Whom I need to contact in the Department of Corporations, and how to solve this complicated issues? Please help. Big thanks.

Is there anyone out there to talk about this situation? We may face simular problems now that we are in the short sales, repo economy.  Please let us discuss this.  Thanks.

I do a lot of shortsales, reo, loss mitt, since I'm in the #3 foreclosure capital of the U.S.  but from what I can tell you, most MLS's have a rule about compensation. 

If you offered the BA 3% in the MLS, then her Broker (who OWNS the transaction) accepted that fee.  If there was not enough money to fix all of the short sale issues, then you need to work with the mtg co. the Broker of the BA, and You to resolve this situation. 

Arbitration may not be such a bad idea imho.  You promised 3%, she accepted.... there were mitigating issues, but when it is all said and done, I'd try to do a split since you got the higher end of the money, rather than waste my time with it.  I know it sounds bad, like you are caving, but time is money, and the loss of brain cells are not worth it. 

You could have 3 more transactions and 5 more prospects and be better off.  It is your decision, but the BA is mad because she got a lower split and thinks you should take the hit.  That is why I do not do unequal splits (unless the higher end is on the BA side).  It becomes a matter of who is going to win the battle, and not moving on....

Good Evening

Since I read that you do a lot of short sales I was hoping you can answer Some questions for me. I am currently listing a home that is not in foreclosure yet and we hope not to be.  However, the seller has now been late for the first time due to the fact that he can not afford the monthly payment.  I just spoke to his bank and they informed me that I can submit an offer contingent on their approval of a short sale and if approved they will take the offer pay off his loan and what ever is left pay his pre-pay penalty without damaging his credit.  
Does this sound about right?  I would like to get more details on how to get my seller out of this house without cause for concern for his future credit rating. 

Thank you in advance for your input.

Sincerely,
Joan Greenhalgh
Exit Team Realty, PA

I have had several issues w/REO and Short sales regarding commissions.  Several times they have changed it during the listing agreement, after we have set a commission.  Last one I just closed on was an agreed upon %, half was thru the listing they change the compensation to co-broke so they were getting a % more than listing, then added a referral fee and we ended up with 1% and on top of that they made me pay for the final water, smokes and carbons plus the installation...this they let me know about one hour before the closing.  I am not going to be too quick to take another one.

In response to your short sale experience, I have worked with Short Sales and the biggest advice I can give you is be persistant.  Your client and the buyers (when you do get offers) have to be patient.  Lenders take their time on decisions.  I would get your client to fill out the short sale package for the lender.  Call them every day to see if it has been approved or not.  It took my short sale from Nov. to now, and it has been a long haul.  I am sure that not all short sales take as long as mine has, but my client has not made a mortgage payment since Oct of last year.  Let me know if I can help you in any way and I will do my best.  Good luck!

Amanda