Doing short sales is about to get harder.
Upcoming changes to NWMLS Rule 101(g) regarding short sales will significantly impact listing broker commissions. Here’s how things will change: For short sales listed after December 12, 2012, the selling office will be guaranteed payment of the commission stated in the listing. If the lender reduces the total commission they will pay in the sale, the listing office will have to bear the entire loss. For example, if a 6% short sale listing agreement is 3% LOC and 3% SOC, and the bank decides they will only pay 5%, the selling office receives 3% and the listing office receives the remaining 2%.
The NWMLS’s assertion that there is far less uncertainty regarding the amount of commission that a creditor will pay in a short sale is absurd. Individual lender payments are not consistent from sale to sale. Last month we saw IndyMac pay 6% commission on one sale and 5% commission on another. While Fannie and Freddy are paying 6% commission, we took a sample of 100 of our listings from 2012 and found only nine Fannie/Freddy loans.
Brokers that don’t want to gamble on the uncertainly may want to consider referring the sale. All it takes is a phone call. We do all the work, you can free up time to focus on building your core business, and we pay you a 30% referral fee. Here is some information about why referrals may be the right option for your business.
If you have any questions about the new short sale rule, you can call me direct at 206-612-5541.