Just Say “NO”

OK, ready? Repeat after me… “NO”

Try it again…”NO”

That’s what you should be saying firmly when the bank/lender says or “demands” that you lower your commission on your short-sale listing.

That’s also what you should be saying firmly when the listing agent says that the bank “demands” that the commission be lowered and that you, as the buyer’s agent, have to “split the difference”.

Too many agents are letting banks get the best of them. I’ve said “no” several times and have never had a problem. There are plenty of other agents that have also said “no” and have not had a problem either.

Can you actually say “no”?

Yes, you can! And you should. If you haven’t already, check out Lem Marshall’s presentation on short-sales which covers what’s required and what’s not and what’s legal and ethical.

Will the bank kill the deal if you say “no”?

I’ve yet to hear of a bank not approving a short-sale over 1 percent worth of commission. If someone has, please let me know and I will stand corrected.

So next time the bank tells you that you have to cut your commission to almost nothing, just say “no” and move on to the next subject. You’d be surprised at how well that works…

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14 Responses to Just Say “NO”

  1. I think it’s important to remember this very issue. I’ve been teaching countless classes and talking to countless brokers about this issue. I’ve only heard of 1 brokerage with 1 story that the Lender allowed the deal to die. The VAST majority say “no” and go to closing.

    Knowing the cost of the lender to continue to foreclosure is important. Almost always, loosing the deal over the commission issues isn’t worth it for the lender.

  2. as an investor, bargaining with the bank is a butter zone for me. the banks want nothing to do with the properties so don’t be afraid to ask for the moon. usually you get it.

  3. Agents forget that they have a contract with the sellers and buyers to get paid a certain commission. Most of them do panic when the lender or other agent asks to cut it…but they shouldn’t ever do it. Any office manager would agree.

  4. Matt Wilkins says:

    I have noticed that short sales are becoming more eficient and a slight increase in the ratio that are actually closing.

    I do many interior BPO reports for lenders in conjunction with short sales. The time betwen contract ratifacation and when I receive the order to od the report has diminished over the past year and is now usually 2 weeks or less.

  5. I was in a transaction this Spring where the lender was very much a newbie in dealing with a short sale (I had not heard of that bank before). The listing agent said no to the commission-ectomy, as well as explaining many times what the correct price was for the home. The bank ended up with the home in the foreclosure sale.

    Nevertheless, listing agents must say no to these lenders, when we agents are facilitating saving the lender a ton of additional expense by selling these homes prior to foreclosure.

  6. Thanks for posting the video again. I just found this blog and it has some very helpful information on listing short sales.

  7. I have not been through a short sale yet but have an attorney who tells me to just say no to the bank as well. He said the bank always will back down.

  8. Barbara Lassley says:

    Well, I’ve only had about a few short sales and foreclosures, so I am still in the learning stage.

    I agree both sides should get 300 chickens/cows/or earned income.

    My questions are:

    As a listing agent it has been my expereince that the lender wants to see the listing agreement 1st, distress letter, then say “give us a contract and we will consider”

    In the meantime how or do we list? If we do list 300 chickens/cows or earned income, all terms subject to lender? Or do we have to wait for their approval to list? Shouldn’t the Bank not be accountable for their terms if they give us the OK? Do we loose time on the market for sellers? That leaves us as listing agents in a difficult situation since ut uis suggested to “disclose” terms.

    Most borkerage agreements states the 300 chickens/cows/earnewd income and they state they do not want to look at properties less than the 300. I don’t want to go back to my clients

    How does that play in the code of ethics, putting our clients before ourselves.

  9. Agents that want to stay in the business are going to have to start just saying no. If they do not they will find themselves with large credit card debts and out of the industry. So, I believe that this statement needs to be written in bold type “JUST SAY NO.” Short sale have a much larger work load and provide substantially higher risk so do not be suckered into working for free and follow the advice provided here.

  10. Michelle H. says:

    Okay, I agree with the just say no…However, what do you do when you see a listing that says the commission will be based on sales price and net to seller, but the field with the agent commissions says 300 chickens? Can you still say no?

  11. Michelle,

    If you’re a member of MRIS, they have modified their policy to say that nothing overrides what’s in the Commission section and remarks have nothing to do with payment. I don’t know about others.

    Buyer Agency agreements would address this and give you the ability to negotiate with the Buyer or Listing (prior to introducing the property) there are ways to do it, but none of them are are very comfortable for a lot of people.

  12. Michelle – Sounds like that means a commission based on the net sales price. This is prefectly legal and ok based on MRIS rules (if you’re a member of the MRIS). Check with your local MLS for more guidance.

    As Matthew said, your Buyer’s Agreement should address what/how you get paid. Make sure you go over it in detail with your client so that you’re all on the same page.

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  14. Excellent advice IMO! A great too many persons I think just roll over and are so desperate to get a deal, that they are willing to make whatever concessions are asked of them. In a lot of cases, their concessions simply don’t make or break the deal. So, stand up for yourselves and don’t cave in to the requests! Great article!

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