Session Expired
Realtor Commissions Under Attack? - 06.01.10
Today's Poll: What percentage of the people who are going for the tax credit will close on time?
A. 90% - 100%
B. 70% - 89%
C. 50% - 69%
D. Less than 50%
Rate this Program
JohnAppraiser: (June 04, 2010 7:20am)
6% 6% 6% That has gone on too long. I am an appraiser and investor who flips properties. Realtors getting 2-2.5% just to type your house into the MLS is too much. I have sold most houses myself or through Craig's list. I will do more MLS now that I found a service that charges a flat listing rate that is NON exclusive. If I sell my house on my own I pay no commision, if a realtor brings the buyer they deserve the 3% I guess. 15 years ago the house that was 100k brought in $6,000 in commissions for RE/broker. The appraiser made $325 to appraise it. Now that house is probably worth 200k if updated (most are in that time frame). The new commission is $10,500-$12,000, the appraiser gets $175-275. That is the fact that appraisers look at. I know some clients are a pain and that some houses take a lot of marketing to sell but it gets easier when you are an agent and have made contact that will give referrals. As I get oldr as an appraiser none of that matters, the fees will be the same.
Tracey: (June 04, 2010 7:10am)
Did you really say "if your pay day is over $10,000, you shouldn't complain" - or something to that effect? Are you high? Do you know how long it may take to sell a property in a balanced market (6 month supply of inventory)? If you're really good your average days on the market for your listing may be 56 days(appx). Do the math...if it takes you 60 days to massage that lead and help them get their house ready to come on the market and then another 56 days to get it to close - that's waiting 4 months for your $10,000 gross commision which on average most agents will only keep about $4,000 after splits, taxes & expenses - that equals $1,000 a month income. I believe at $1,000/mo income for a family of 4 that puts you at poverty level in this country. Love your stuff - but, you definitely missed this boat on what a Realtor's salary really looks like - very disappointing.
corvin: (June 03, 2010 7:13am)
5pence, sorry to take all day to get back to you............ thanks for the link it was a good read.........
Moses: (June 02, 2010 11:51am)
Thanks Eric, I feel ya...soooo Frank and Brian, do I have a right to complain on a 100K deal when my commission gets busted from 3000 to 2000, then I split with my broker 80/20, pay E&O, subtract my advertising, gas and time and walk away with less than a thousand dollars? I just sold a home where the seller had made payments for over ten years paying the purchase price of the home in interest payments, then sold the home and grabbed that cash tooo! Why am I being shorted when they didn't even lose any money on the deal? Do they need the financial help? Wasn't it called a bailout? Maybe it should be called the screw realtors and appraisers act.
Faun: (June 02, 2010 11:42am)
Hi Moses: In case you haven't noticed, the discussion that began about Realtor's commissions being under attack by the banks, turned into discussions about HVCC and lenders networking about automated underwriting. All valid discussions for a forum started by two lenders, and a good reminder of the real purpose of this forum. At this time I'm of the belief that the callous attitude toward commissions displayed in yesterday's TBWS video, was nothing more than a controversial stance against industry partners to spark discussion and, therefore, SEO, to our friends' website. If they've ever done a jumbo loan and earned a $20,000 commission, there's no way they would embrace the stance that the amount of the commission justifies the taking of it.
EricO: (June 02, 2010 11:32am)
Moses, Now you know what it feels like to be an appraiser I hav ehad my income cut in half due to HVCC and to make the same I have to do twice as much and incur all the cost of gas and travel and wear and tear just to make the same I did 18 months ago. I feel your pain. A contract is a contract
Moses: (June 02, 2010 11:20am)
I like your show, but on this point you totally suck! What about the agents in a place like Lake County Ca where the average home price is barely above 100K at the moment. Every time they bust my commission down to two percent they are taking food away from my family and putting it into their porsche! I do a great job and deserve to make living wage without selling 500 homes.
luckydog: (June 02, 2010 10:39am)
Anyone have a lender that will do LP open access on a condo over a 100% ltv? I love how ordering an appraisal is such a crap shoot these days. HasVeryConcernedConsumers
5pence: (June 01, 2010 6:15pm)
Nevermind Frank and Brian, sorry, I figured it out. You have to actually get into the "See Signatures" area to avoid sending the video with it. You can send it with this link that goes directly to the signatures and add your own message. Very powerful guys. Huge thanks!! Ed http://www.hvccpetition.com/ViewSignatures.aspx
5pence: (June 01, 2010 6:03pm)
I 2nd valuequestor. Can we get a link so we can forward it without the video? I don't want the recipients to get the wrong opinions. It's important and it is dynamite if forwarded with a personal message. Thanks !!
EricO: (June 01, 2010 5:07pm)
There were tow reasons for this meltdown in Real Estate, No Brrier to entry with 100% financing and Stated INcome loans when you combine these two situations you get liar loans. We al knew it but if the big banks and such were going to sell money in this way and their were rpivate investors willing to buy the MBS's and the CDO's. then they should have taken the fall like Lehman Bros. I would also say that underwriting did no due dilligence, managers looked at thier staff's with 50-100 loans on their desks and just told them to move them along,, "we need to close these loans. That's the truth and the whole truth.
Valuequestor: (June 01, 2010 5:06pm)
Frank & Brian: Hey Fellas! Please touch on forwarding the HVCC Petition link on TBWS on one of the shows this week. This is a dynamite tool to help our cause. Very Powerfull! I have to get back to work now. I'm on the President's commission to figure out who to sue and how to shift blame on the Gulf Oil Spill. Remember......The Government Can Fix Anything!
5pence: (June 01, 2010 4:48pm)
heheheeh - I'm the first one to post on the new venue!! Looks good
5pence: (June 01, 2010 3:38pm)
Hi Corvin : I can't post pictures here so take a look here at Wikipedia, about half-way down the page on the right. It only goes up to 2007 but it also shows the world wealth compared to the trading done. Yes, it sure looks like they traded the world 3-4 times over. I guess you could say they sold the world. What is that famous saying? Oh yeah, what does it profit it a man to gain the world but lose their soul. Amazing what propriety trading can do ehhh? It can allow you to risk more than the world has. ..http://en.wikipedia.org/wiki/Derivative_%28finance%29
corvin: (June 01, 2010 3:25pm)
Is it true that there are 500 Trillion Dollars of MBS and other types of derivatives out there? (or was that 50?)
5pence: (June 01, 2010 3:05pm)
Just ran across this - point in fact : According to the Bank for International Settlements, the US's structural deficit - the amount of our deficit adjusted for the economic cycle - has increased from 3.1% of GDP in 2007 to 9.2% in 2010. This does not take into account very large liabilities the government has accepted by socializing losses in the housing market. We have not seen the bills for bailing out Fannie Mae and Freddie Mac and even more so the Federal Housing Administration, which is issuing government guaranteed loans to non-creditworthy borrowers on terms easier than anything offered during the housing bubble." ..CDO's are rotten fish, wrapped up with day old fish and new fish and sold as fresh.
Chuck Edwards: (June 01, 2010 2:51pm)
What's this about sellers having to have a loan officer's license to do their own seller financing deal?
Chuck Edwards: (June 01, 2010 2:50pm)
What's this about sellers having to have a loan officer's license to do their own seller financing deal?
5pence: (June 01, 2010 2:48pm)
There is no mortgage market for the banks crappy MBS's without the taxpayers unlimited bailouts. I'd love to see them try to make a real market, then we could all get back to work. But they don't and not because they can't, it's because they won't - unlimited taxpayer funding is a banksters wet dream.
5pence: (June 01, 2010 2:44pm)
Excellent news Corvin. Frank, they are listening to the banks only. It's kind of like the law asking the killer of an abusive husband what they should do next and following her recommendations. I mean, she did it so she must know the solution - right? It's insanity. BTW, I think David Stevens was pulling your leg or outright BW'ing you to your face. There are no Chinese buyers of mortgage debt, or Germany or Japan. They've all been burnt and they know there is no market without continued taxpayer bailouts and that what's going on is a continuation of the same things that led to the meltdown. They can't be that stupid with their money. Besides, if there were actual buyers of the GSE's MBS's and CDO's - why are the taxpayers still paying for it through the GSE's? I call BS on D. Stevens.
corvin: (June 01, 2010 2:22pm)
This AM an instructor at a RE class asked about responding to a financial institution insisting upon a reduction of commission. Answer: ask the negotiator if they have a legal dept. Then ask negotiator to ask the legal dept about the term TORTIOUS INTERFERENCE of CONTRACT.
frankgaray: (June 01, 2010 1:06pm)
i believe our industries image has been drug through the mud over the past few years. in fact if you listen to the language of our legislatures and policy makers you'll hear a tone that suggests anything that hurts "us" must be good for the consumer. you need only google "barney frank" and listen to some of his comments. so if we want to protect our commissions and if we want to influence actual and positive change to our industry than we need to be careful of our messaging. complaining about a 17,000 commission will only validate the opinions of those that think we're greedy and responsible for our global economic downturn. David Stevens said at a lunch in that I attended that "its the belief in Washington D.C. that our industry is responsible for our recession and its their job to fix it." I don't know what went into that transaction and its really a moot point because "perception is reality." Brian
5pence: (June 01, 2010 12:53pm)
Sorry, didn't mean to be a conversation killer, but, Hahaah - made you think ;^)
5pence: (June 01, 2010 12:39pm)
I suppose we could send it and just say that the video is dated and state the reasons why - that might work. I'm curious, does this BP oil spill remind anybody else of the bank bailouts? It does me and for many reasons. They said it's costing them almost a billion dollars so far. I don't believe that at all. I think they're counting in their costs all the oil they've lost and using some creative accounting so maybe people will feel sorry for them. With the present administration, how come we're not bailing them out and giving them more money to keep drilling? Seems logical following events of the past 2 years. I really feel sorry for those people down there. They've been through so much.
5pence: (June 01, 2010 12:11pm)
Sorry, it was supposed to be consumer and small business harm is on-going and not getting any better. Thanks to FHA joining the ranks of the evil bailout twins. The friggin thing is illegal, first and foremost.
5pence: (June 01, 2010 12:08pm)
I mean, it is negatively affecting prices too but not for the reasons you state. Prices are being affected by AMC's due to, the banks are making more money foreclosing and the AMC is not willing to let the borrower out of the PMI. Also, if the AMC's just accept the appraisal without comment it doesn't look like they're fighting fraud and as we all know, to AMC's appearances are everything. I'm sure there's other reasons too but they are much more complicated than laid out in the video. For representatives to care they have to know how much it's hurting the consumer and small business. No offense of course, I love you guys, but the video misses the mark in saying what needs to be said to get a politican to care. Low home values is old news, consumer and small harm is on-going and not getting any better.
5pence: (June 01, 2010 11:59am)
Frank or Brian, is there a way to send it to our Congressmen without the video? The facts stated aren't the real facts, as we know them today anyway. The real harm is to the consumer and not to prices. Thanks.
5pence: (June 01, 2010 11:50am)
That's the way I see it BoingK. As long as Fannie and Freddie are the benefactors of the Fed and Treasury with unlimited taxpayer funds to make sure the banks keep getting bailed out (even though there is not need to bail them out anymore - yes?), the HVCC and similar legislation could be coming through for the outrageous takeover of all functions of the loan market. If they can allow the illegal HVCC to dictate public policy with absolutely no consumer protection, does anyone really believe that the banksters will stop with appraisers? Their huge size was created by immoral and illegal activites and it will take more illegal and immoral activities to keep them that big.... and growing. I'd be suprised if the sunset the HVCC is in the final consumer protection bill - after all, it really is just a too big to fail protection bill that keeps the taxpayer on the hook for their risks. And, there's no real outrage at what the banks have done - so they figure it's ok wreak to havoc.
frankgaray: (June 01, 2010 11:44am)
it's a tab at the top.. you can sort it and everything. That's why we put it together so you could simply forward the link with a little note as to why you think HVCC hurts the consumer.
EricO: (June 01, 2010 11:35am)
Frank where are the signatures at HVCCPetition.com? How big is the file?
frankgaray: (June 01, 2010 11:29am)
EricO - That's a great idea! If everyone would send www.HVCCPetition.com to their Senators and House members with at little note, it just might make a difference. All the info and the signatures are there! Go for it!
Boingk: (June 01, 2010 11:25am)
While it is illegal to charge appraisal fees based on the value of the property, it is also a simple way to make more money for the AMCs and the banks. So who cares about legality. Buyers of million dollar homes (at least most of them) will not really mind if its $450 or $550 or $650 that the bank's AMCs are going to charge them for the appraisal. It's a drop in the bucket.
Boingk: (June 01, 2010 11:21am)
5PENCE's idea of a bank-owned real estate management company is not far-fetched. I bet my everything that at this very moment, some people in the banking industry is finding ways to corner the real estate business. HVCC was not hatched overnight. It was a result of years of lusting for more money, connivance, bullying. It wasn't about appraiser independence. It's all about more money for the banks. It will only take just another Cuomo to throw a monkey wrench in the real estate sales business.
EricO: (June 01, 2010 11:20am)
What ever happened to the 120 thousand signatures you folks collected against HVCC. Are they just collecting dust why not send them to the Senate here are the five Republicans on the reconciliation committee. They include, Shelby, Corker, Crapo, Gregg and Chambliss. everyone should e-mial them right away and ask that they support the Casey Ammendment in Committee. How about sending the signatures as well. Make a big deal out of it. You went ot Cuomo's office and then nothing happened. Let's try again, why did you give up?
5pence: (June 01, 2010 11:10am)
EricO : some AMC's charge by the value of the home, totally illegal by the way, but they stick with standard fees for the appraisers.
EricO: (June 01, 2010 11:07am)
Also, this is the only market that you can charge based on market acceptability. Lawyers, attorneys, CPA, Accountants, when working on an estate deal or a divorce you can charge what you want and if you do excellent work then you wil keep this class of clients sending you business if ou charge too much or do lousy work they won't. But in the banking world the fees aqre pretty fixed and they are 40-50% less than they were before HVCC. And by the way any updates as to what is going on with HVCC and the reconciliation committee in DC
EricO: (June 01, 2010 11:04am)
FrankGaray You are wrong about appraiser's fees. Recently did a milllion dollard home in Ballymeade in Falmouth Massachusetts the fee was the same for a 1,200 sq. ft. 250K house in Falmouth the AMC did not care and would not consider a fee increase due to the complexity. I used to charge $500.00 to $600.00 for million dollar homes and or waterfront properties, In MA waterfront are usually over a million unless some little cottage, Even when the homes are standard houses I get paid the same to do a victorian with lots of nooks and crannies as I did for doing a 960 sq. ft. two bedroom ranch. OUt fees in MA were $350.00 for a standard home whether the house was valued at $200,000 or $800,000. When we had clients and relationships we could explain to the client and their customer why we were charging more. Today the banks and their AMC's don't care and will move on to the next appraiser. There was some difference in fees in the old days but no more.
gwilcox72: (June 01, 2010 11:01am)
I couldn't agree with you more Nancyd! As Ron Quintero mentioned earlier, a nice attorney letter letting the bank know that you know what they are about can have a radical effect on your commission. I recommend a book called "Winning Through Intimidation" by Robert RInger for some insights. Also, Ron has taught me more about this space than any source I have ever been exposed to. I would recommend consulting with him IF you truly want to take ACTION. Realtor's must learn this information and then effect change through action.
ValleyGirl: (June 01, 2010 11:01am)
Since when are we "entitled" to 3%? This paradigm is one I get tired of hearing. I like money just as much as the next gal but I am also willing to change with the times. You can either evolve or devolve. Personally, I'm busy evolving. I made a lot of money last year on Short Sales. I didn't use a negotiator because I can talk to an asset manager, who by the way knows less than I do about Real Estate, all by myself. I don't need a mouthpiece to hide behind. Guess what? I got paid less than 3% on every deal and still made plenty of money. I also get tired of hearing about how many hours agents spend on Short Sales. Yeh sure, we have to wait around for 4 months while the bank does it's thing. But seriously, I might have 10 hours of actual work in a Short Sale. Lets face it people, we get paid a lot of money to do what we do for a living. Some of us should spend more time being grateful instead of blaming banks for their cash flow problems.
nancyd: (June 01, 2010 10:46am)
If you can imagine how much the world hated Hitler during WWII...that is how much I hate mortgage lenders (banks mainly) No one calls it price fixing when ALL of these banks keep the brokerage fees at the SAME amount all over the country. Agreed to brokgerage fees stated ina listing contract are negated and the bank is not even a party it. YET NAR & FAR sit on thier butts and e-mail members things like "how are we doing?" Selling short Sale properties and getting financing for a new buyer demands 4 times the work and knowledge today. The banks and the greedy careless practices (trading derivatives), etc. vastly contributed to the housing collaspe, which filled my area with foreclosures, and abandoned property. They caused plight where there had been thriving communities. Then to add insult to injury, we the tax payers, had to bail them out! PLEASE! Worse than that you have people like Cris Dodd and Barney Frank writing legislation to "revamp" the financial industry....make me gag
BTM: (June 01, 2010 10:42am)
It is very difficult to do short sales as a standard realtor. First, you don't have the negotiation skills. You must have an experienced, professional negotiator. Second, you have to beat the banks up or they will beat the hell out of you - this includes doing your own hardcore appraisal/inspections and doing forensic analysis of the notes. Third you need an investor involved - this allows money to be made in the deal for everyone even if the bank cuts the commission on paper. An investor also brings in the tools and time flexibility that allow 70% of these deals to close vs. 10% that normally close. Successful short sales require a team approach.
Funrunners: (June 01, 2010 10:28am)
Realtors & Mortgage Brokers: THINK about This; A growth market is interenational. baby boomers are retiring elsewhere, you can handle the deal, realtors can earn the fee. Right now approx 50k americans live in Costa Rica. Lets say only 1/2 own. That is 25k sales you did not make and loans you did not close. Stuart Title I am told is insuring title ,not sure check it. Most homes average $200K plus and most fees in Costa Rica%6. Now many realtor offices are there in the country but it is my understanding they do not fall under the same guildelines. or the laws are different,. I personally know of a deal that the real estate agent commission was 40% , which SEEMS they have net listings. the whole point of this is BABY BOOMERS are not only buying second homes but are moving.They need your help.For the interested Honduras will be coming on strong within a few years, have 800 mi of beach and less than 5 % is developed.. THEY HAVE HURRICANE. Panama they are BUYING IN THE MOUNTAINS..jOSHUA
5pence: (June 01, 2010 10:22am)
Bank owned Realtor management companies next? They were frustrated in trying to move into that field years ago by NAR, now they're being emboldened by their bloated size and egos and their demi-god treatment by the government? Fees for independents should never be the topic of conversation. As someone put it, it's like the bank is waiting at the ATM for someone to the withdraw money and then demand their cut for their mere presence. Short selling realtors are doing them a big favor! Fees should never be the topic of discussion after the fact. Realtors fees may seem exorbitant in some cases to some, but it all evens out. The realtor selling the million dollar home most likely lives in or near a million dollar neighborhood and everything costs more there just to exist. The market decides what's fair, not jealous outsiders or greedy banksters. What's a lot of money in commissions in one place is barely living wages in another.
Faun: (June 01, 2010 10:18am)
Ron, if you have a good attorney letter that has worked to get a bank, any bank, to approve a "jumbo" "non-agency" or "non-conforming" short sale at more than 5% total commission, please send me your contact information. I'll get in touch so you can email it to me and I will in turn distribute it to EVERY Realtor in my state and I will rally them to use it and never cut fees again to close a short sale.
Funrunners: (June 01, 2010 10:14am)
Dear CVBroker: As an appraiser I must point outthe information you have is incorrect and has often been spread as the true by many realtor. But the Appraiser Know the fact of the matter is that begging was the first and oldest profession, BECAUSE until a market value is established it can be sold..... smile enjoy the journey. Anybody want to play in the Costa Rica sandbox let me now. joshua southlandappraisers.com
Faun: (June 01, 2010 10:10am)
gwilcox72, we're on the same side, we just see things a bit differently. The real question is, can any Realtor afford to work for one minute, much less hundreds of hours on an average short sale, only to tell the banks "no go" at the 11th hour? I agree things would change if every Realtor stood up to the banks, but this will never happen because we are working ten times harder and earning less money. Last month's NAR publication indicates that across the country, Realtor earnings are down 25-30% from just 3-4 years ago . . . an interesting figure when you consider that the banks usually cut our fees by about 30% in a short sale!!!! We are all having to do short sales, like it or not, to survive, and nobody is going to throw weeks worth of work down the drain to get zero when we can at least get 2%. Not our usual, customary or even contractual fees, but much better than zero, especially when all we have to sell is our time and once it's been expended, we can't get it back.
Ron Quintero: (June 01, 2010 10:08am)
Hey GW...Good to see your name, you're right, the transaction is between the buyer and seller and the lender is nothing more than a lean holder, PERIOD. They are not on the HUD 1, offer to purchase, nada. You're spot on for the "contractual interference" reference as well. When they attempt to neg. the commish, it's time for the attorney letter pointing out the breaking of the law...documenting the harm the lender not acting in good faith is now creating damages for the borrower. I am once again doing a ton of work in this space, I am amazed at how much people don't know about this market.
BTM: (June 01, 2010 10:01am)
If most of the pressure is coming from banks - then again the market will correct this issue as long as there is no collusion among the banks - or between the banks and the federal government. Those banks that cut commissions will have fewer and fewer agents willing to sell their properties. Eventually the commission percentage will reach an equalibrium - one that is best for the consumer.
BTM: (June 01, 2010 9:56am)
I find much of this thread disturbing. I'm not an appraiser or a realtor - I'm an investor. I whine every so often about how much commission a realtor gets on a sale, but bottom line, LET THE MARKET HANDLE IT. The governement does not need to be in business of setting ANYONE'S compensation, including bankster CEO's. Government micro management of anything is a disaster! Ya'll have become too accepting of this level of control. If real estate agents make too much money then over time other agents and brokers will come in and offer services for less money. It happens now. Let free markets determine value. Not government. Socialism has never worked, anywhere, ever, not once.
gwilcox72: (June 01, 2010 9:52am)
Faun, the contract is between the Seller and the Buyer. I do mean to imply that the bank has nothing to say accept YES or NO. I do agree they get away with behaving in this manner. It is my contention that they get away with it because the realtor community allows them to. A lawsuit is not the right way to go for obvious reasons. Taking back the MLS's around the nation is. What if every MLS had a policy, acknowledged in writing by every seller whose home is facing a short sale scenario, that if the bank messes with ANY of the terms of the contract, the sale is cancelled and the listing agreement is voided? Fight fire with fire. Realtor commissions are subject to this type of theft because the community allows the theft to go on...I remember a scene from L.A. Story, starring Steve Martin, where the crook simply waits at the ATM as people withdraw funds...Similar, no?
DanSchweihs: (June 01, 2010 9:46am)
Here is a link from the NYT this weekend about Memphis: “Foreclosures and unemployment have destroyed black wealth and income and erased two decades of slow progress.” http://nyti.ms/9YVfeS Market failures like this are happening in many neighborhoods of many cities. A three percent cap on a low priced home is a deal breaker for a realtor. “Wage and price controls” under another name are still “wage and price controls.” See my earlier comment below. Additionally, FHAs current proposal to cap closing costs on all loans at three percent regardless of loan size will crush the “underserved”, the clients that FHA was created to serve. May of the “underserved” voted for Obama to get change. HVCC is also causing market failures. HVCC will be changed if NAR wants it changed. HVCC is “wage and price controls” implemented by an appraiser. Someone with influence (possible NAR) will have to stand up and tell the politicians that this isn’t working.
jcollins: (June 01, 2010 9:46am)
tortious interferance I do not think this would come into play. the bank is not standing in the way the are a party to the entire contract. when the buyer signed the loan papers, the made a contractual agreement to pay the bank back in full with interest. Now they are going back to the bank to change it the contract. This would put them in the middle of the entire contract. the can say yes, no or come back with a something different. I do agree they should not nego. the comissions after the contract is writen.
Terryann: (June 01, 2010 9:31am)
Well lets see. I sold a BofA short sale this year. The house was on the market for 8 months; then I was in the short sale for 11 months, 3 weeks and 2 days; sold it 9 times before I could get BofA to actually close; showed the house personally over 100 times; kept the lawn mowed, trash picked up, utilities paid for, weatherized, un-weatherized, faxed, emailed & fedexed 100's of times; thousands of hours in phone calls to agents, buyers, customer service and then threw in half of my commission (I would have paid more just to have it all go away) since the appraisal came in higher than the 9 offers. Yeah. $1.65 per hour when it was said and done and after I split with the broker, other agent and paid a referral fee. Just made $12K on another after ONLY 5 months working on it. It does even out, but after 30 years in this business & 4 declining markets I can tell you I have never worked as hard and only wish I was qualified to do something else. Is Dairy Queen hiring? Sounds good to me.
Faun: (June 01, 2010 9:29am)
gwilcox72, it may be tortious interference, but the banks get away with it because they have the right to approve the short sale, or not. If the answer is no, do you mean to imply that they cannot specify what they will approve so long as the other parties agree to it? Do you really think listing brokers are going to stand back and watch their Sellers go through foreclosure, which means all the work has been for naught and the Realtor will get paid zero? By the time the bank negotiations begin (with a live contract from a live buyer), the Seller, Buyer, and both Realtors already have lots and lots of time and emotional energy vested in the process. Anyway, I agree that someone needs to sue the banks, but who on earth has as much money and legal brainpower as they do? It's never going to be a fair fight. The only hope is for Congress to step in and regulate how the banks handle EVERY short sale no matter what the loan size or type of loan.
GvoxxRE: (June 01, 2010 9:28am)
One more thing...if you think RE agents are over-paid, you must not be watching the news. I don't see anybody here bitching about those FAT CAT bankers in Wall Street and FANNIE MAE making millions upon millions of bail-out money and/or multi-million dollar bonuses for doing absolutely nothing but making our jobs in the Real Estate market harder and f#@$#%g-up the econonmy!!! These are those very same companies and institutions, (as well as the government) that control our RE and lending markets. These are the people/groups that have taken away our livlihood. So if you wish to BITCH at your current situation and at the sad state of the economy, you need to look further up the chain of hierarchy and bitch and gripe at big banks and the governments ...not your local RE agent.
DenverREBroker: (June 01, 2010 9:23am)
Forget about the dollar amount of commission being paid; the $10,000 mark is irrelevant, small-minded, and far from the point. I don't know about all areas of the country, but banks do not pay competitive commissions in short-sale situations here in Denver, Colorado. If they will not pay the prevailing commission rate to either the Listor or the Buyer's Agent, then a smart Broker, given their choice, will find something more lucrative to do with their time than work short-sales, especially given the relative complexity and percentage of failure of those transactions.
gwilcox72: (June 01, 2010 9:16am)
Do you realize that in a short sale, if the lender does ANYTHING other than say yes or no to the terms offered then they are committing a crime. It is called tortious interferance. If the realtor community had the guts, they could back these banks down fairly quickly. Class action anyone? Co-ordinated MLS counterstrike?
crodent: (June 01, 2010 9:10am)
I am amazed at the comments that suggest that Realtors have done nothing to defend appraisers when since the inception of HVCC, I have regularly written & spoken to my representatives including last week Richard Shelby (Ranking member of the Senate Banking Committee), to get them to do away with HVCC. I have provided examples of what it has done to my personal business as well as that of reputable appraisers in my market area and worst of all what it has done to the sellers. This is one Realtor who has tried to defend everyones back! Unfortunately Shelby as well as others think their brains are better than we the experts. To turn this around, banks should be forced to sale homes for whatever the loan balace was period, they should also be made to repair damaged homes thus keeping communities up this in turn improve construction & spending etc. Win win all the way around. Enconomy improves, property values improve & buyers get nice homes & resales can once again compete w/foreclosures.
charity: (June 01, 2010 9:10am)
I think it is not wise for anyone to comment on the amount of another persons fees. The cost for marketing or the number of hours expended are always an unknown to others. I very much take offense when realtors try to say I charge too much for a loan. However, they often do not know the time I may have spent helping a buyer work on their credit, the difficulty of the loan or even the amount of babysitting we do. My husband tells me he could never do my job. After working for a year or more with a client, to think I should make only 1 point on a low sales price is insulting and belittles the hard work I do which includes a reputation for getting deals closed.
CVBroker: (June 01, 2010 9:08am)
Such an old, outdated argument. Sales being the oldest profession and as such, that oldest profession still has $10 hookers and $1000 call girls - same product, different perspective. The $10 hookers complain that they have the same goods and are just as effective and have the same value but who among all of us doesn't see the difference? Quality is in the packaging - real or perceived. Those of you who complain about the commissions on cheap houses - move to an area where the prices are higher. We are in a profession that allows us that freedom - put the effort into motivational moves and suck it up. The haters will always tell us that we make too much, we work too little, we don't deserve it. We don't need to be our own stumbling block. Off to work now - have a great day!
brainstewn: (June 01, 2010 8:59am)
I totally agree with Brian and Frank that a pay day over $10,000 is nothing to complain about! But while we are pointing out exorbitant paydays how about the mortgage industry charging an 80% commission on the first year of their loan? I'm an independent because I never found value in a large company and the huge split many of them take to cover overhead. But keep in mind that by the time the agent pays off the delinquent company account and the company split the agent is left wanting. Besides isn't it illegal for one party to interfere with a contract? In a short sale we request a short-sale – we don’t demand a short sale.
GvoxxRE: (June 01, 2010 8:58am)
I absolutely agree w/Faun & Ron Q.! This is exactly what hard-working, ethical RE agents go through, (of course, there are lazy & unscrupulous Realtors. No doubt, we all know & dealt w/a handful of them.) People who think hard-working RE agents are over-paid have no clue what it takes to make a living being a RE agent. Why not get your license, take all the tests, pay those exorbant fees every time u need to renew or add an extention to your license (S.A.F.E.,) pay MLS fees, pay ENO, pay NAR & CAR fees, pay for advertising and marketing, pay for living expenses, etc. THEN...deal w/flakey buyers & flakey unprofessional agents, deal w/unrealistic home owners, fight w/the banks, then god forbid you make a measely $17K & give some of it to your broker! Short sales & REOs take 3-6 mos. to close (IF they close,) because of these stupid banks & lately, many of these deals fall out. The banks run the market & get in the way of the deal. So if u think we're over-paid, then JOIN THE CLUB!
charlottehousehunter: (June 01, 2010 8:55am)
As an agent that does short sales, I get completely aggravated by commission complaints by agents. COME FREAKING-ON People! You've made a lot of money for just waiting while I negotiated the file and got that approval our clients. If you want more money, ask your client to pay the difference. In most REO sales, the higher the dollar amount, the lower the commission percentage.
Faun: (June 01, 2010 8:11am)
Wow, after reading most of the posts here, it is truly shocking to see how uninformed most INDUSTRY folks are about what really goes on in a short sale. ChicagoLen, it is the lienholder (bank) that always demands a commission cut after the buyer has been secured, not the Seller. The Sellers see how hard their Realtors are working and they want them to be paid. The banks, on the other hand, see our livlihood as another source of funds and demand lower commissions AFTER the buyer has been found, the purchase price has already been negotiated and approved, and we are waiting for THEM to LET the deal close. That is why your Realtor friends are so upset -- the banks hold our deals hostage and demand that we cut our pay, so they will get more money, AFTER we have already performed and put a buyer and seller together. That's like showing up for a job and having your employer cut your paycheck by 33% for the WORK YOU ALREADY DID last month!
FLRealtor: (June 01, 2010 8:06am)
My buddy Joe, is a very succesful appraiser. HE CLAIMS he is nothing more than an order taker, i.e. gets the order, processes it with lots of data and photos, makes an educated price decision. I believe appraisers do much more. However, he's NOT in sales. SALES make the world go round. Without salespeople, the world stops. Order takers might "understand and accept" flat fees, while ethical, successful salespersons CREATE BUSINESS. They create an environment which helps their clients make the right decision. This may include items such as school info, land splits, zoning and commercial codes, material defects, paperwork/managerial skills, public relations, negotiation, marketing,and FOLLOW UP. I say, let's get paid for our TALENTS, not what we do. "Mr. Clapton, accept the fact that the local guitarist, gets $100 a night. When performing here, you must accept $100." A new agent once said "I get paid too much". I told her, yes, she did, and should look 4 another line of work.
Common Sense: (June 01, 2010 8:04am)
Ron's right. After all, the real point of a forum like this is to shut people up and avoid diverse points of view. Education may be expensive, but as Ron shows us, ignorance is bliss.
ChicagoLen: (June 01, 2010 8:01am)
Re-negotiating a commission after the fact is wrong. If they didn't want to pay it (and I don't care how much it is) then they should have either negotiated down BEFORE signing with the listing agent, or found another agent.
Ron Quintero: (June 01, 2010 7:42am)
I usually do not waste time in these types of forums due to what I witnessed today, uninformed and uneducated opionions. First commissions. Unless you have sold RE...SHUT UP. It cost thousands more to market a high end property than a lower price home, it's not a level playing field. Second, if the RTL knew what they were doing, they would know how to make the bank realize, they don't pay the commissions on a short-sale nor does the bank get the tac credit for the write off's for the short-sale...the seller does...99% of RTL's don't know that one either...last item...99% of RTL's don't use RESPA 6 when doing a short sale and are just bending their clients over. Did you know that it is illegal for a creditor to report lates when their is a qualified dispute? Yep ALL of my clients that have filed small claims court POST closing has won and they get a court order to the bureaus to remove the trade line in it's entirety. Think education is expensive, try ignorance!!!!
Faun: (June 01, 2010 7:40am)
Actually, the Realtor community has been responding to issues like HVCC since it started. We have not enjoyed watching our competent appraisal friends leave the business only to have our transactions, and therefore our income, derailed by incompetent appraisers working for pennies on the dollar. Most Realtors cringe at the thought of wage or price controls no matter who is on the receiving end. To all who've commented and are just taking a calculator out to figure the commission on a large sale, you're making the same mistake that lures a lot of less-than-qualified people into the real estate business -- eying the commission without having any idea of the investment of time and money to earn it.
Common Sense: (June 01, 2010 7:38am)
Donloyd, It's called the free market and that is now public enemy #1.
donloyd: (June 01, 2010 7:23am)
I think the main point has been missed. The fee, regardless of amount, is an issue of contract law. No one puts a gun to a seller’s head and makes him sell at a specific fixed percentage commission rate. The commission is negotiated and agreed to. Discount broker’s fees have not worked as is evidenced by the disappearance of the many offices that tired them in the past. There was not enough commissions were coming through to keep the doors opened. There is no law against selling your own real estate but that doesn’t work either. Most folks don’t know on how to prepare, market, negotiate, or protect themselves from those greedy lawyers who are hovering over the scene like a flock of buzzard waiting pick the bones clean. If there’s is a successful attempt at “fixing” real estate broker fees, more offices will close, fewer people will be in the business, myself included. Maybe being a Walmart Greeter won't be such a bad thing.
Bella Broker: (June 01, 2010 7:22am)
Further more it's disturbing to see one part of the industry happy to see another part is affected by this awful marketplace. I thought it was terrible that we have been unable to use local appraisers, especially in my area where you can drive 20 minutes and it is a different real estate microclimate and you have an appraiser "from the city" coming out trying to compare apples to oranges-it just doesn't work. Empathy and working together for the good of all is what should be the order of the day.
joecolorado: (June 01, 2010 7:18am)
jgruenke: dont get me wrong,I think Realtors are a special breed,but dont dismiss appraisers as realtor wannabes.Some of us didnt join the appraisal profession because we wouldnt or couldnt or didnt want to be a Realtor.Who cares? the main issue here is whether you as a Realtor are going to do something about the outside unwarranted unwanted control/manipulation of your fees.You have a strong lobby,appraisers dont, maybe the NAR can do something to make these idiots realize what their bumbling myopic inefficiencies have done to a gazillion Real Estate professionals and the employment tax base that goes with it..You need to stand up and be counted and demand service from your organization that is meant to protect your interest.Maybe appraisers/brokers can ride the NAR coat tails,who knows?its just time for an org that HAS the power to make this an issue that needs to be addressed and mended NOW,p[referably without the input from a bankers' paid politician.
Bella Broker: (June 01, 2010 7:18am)
Well, has any appraiser has to market a listing for a year? I think not, they are hardly one and the same. We don't get paid up front, we get paid when we close an escrow and regardless of what you think, it is a lot of work and requires a lot of knowledge especially these days.
brokersue: (June 01, 2010 7:14am)
Common sense, in my market this lack of income has already weeded out the number of realtors. Many of us that are highly experienced (I have been licensed for 25 yrs) are sitting back and waiting for someone to straighten out this mess. I see mostly newer, inexperienced realtors dragging the buyers around to these unsellable short sales. It just burns me to have to show these low paying listings, as I take my agency seriously. Today I have to drive 3 hours round trip to make $1,400. My last paycheck was March first and I do not know when the next will be. Thank god my house and car are paid for! This is an impossible environment for any real estate professional to make a living and support a family. With that I mean, appraisers and mortgage people. Something needs to be done for all of us, but I do not hear any load voices.
GODLIKE: (June 01, 2010 7:00am)
Wow, finally a response from the Realtor community! All it took was to hit their pocketbook TOO. You could have cared less when it was only the lowly appraiser and mortgage person. Yes, Realtors are overpaid for the work they do. I've been the training director for a national real estate chain and have seen that most listing agents sit back, prop up their feet and wait for MLS to sell their houses. I've also seen most selling agents are afraid to ask questions of their potential buyers and just chauffeur them all over town making unnecessary work for themselves. BUT animosity aside maybe now we can all band together and get each other's back.
kkric: (June 01, 2010 6:46am)
Hey people. Just because the banks have screwed appraisers and mortgage brokers does not mean we should cheer their efforts to screw real estate brokers. We need to band together and strike back. To start, knock a percent or two off any BPO's you do.
jgruenke: (June 01, 2010 6:46am)
It's funny that this appraiser actually thinks that we realtors are making a killing. Sir, no disrespect but if you were able to make a killing being a realtor you wouldn't be an appraiser. I work hard for my money, and with short sales I work a lot harder than normal. Joel Gruenke, CDPE Certified Distressed Property Expert Philadelphia Region
Common Sense: (June 01, 2010 6:45am)
Real estate commissions are too low on low priced houses and too high on high priced houses. Think about it. Sell a $50,000 house and earn $1,500 on average. Sell a $1,000,000 house and earn $30,000. There is a difference in the amount of work required, but is it that much of a difference? The truth is, real estate agents spend more money and effort marketing themselves than they do marketing their listings. By reducing or flattening the fee structure, the vast majority of agents who are scraping by on less than one deal per month would be forced to seek other employment. This would reduce competition to a few professionals who would then be able to make a good living while providing a valuable service. This would be good for the industry as well as the clients they serve.I also believe this would move public sentiment about real estate agents away from "just above lawyers" to somewhere in the realm of "just below accountants".
frankgaray: (June 01, 2010 6:38am)
Joe - I getcha, my point to the other person was that appraisers don't have a flat fee. They DO take variables into consideration to determine their fee. Same goes with a Realtor or a Loan Officer. Certain variables determine the fee. One of those variables is the price in the Realtor's case.
rbsplace: (June 01, 2010 6:35am)
Foreclosed homes in our area are selling for 12-30k. Try keeping the lights on with 2% of those sales prices.
GaryP: (June 01, 2010 6:31am)
Dan you bring up a good point. Wage and price controls is exactly what is happening now under the name of "consumer protection."
joecolorado: (June 01, 2010 6:29am)
Frank, appraisers dont base their fees on value.Its illegal.They should however base their fees on a quantum meruit basis.each job is different,each job takes a different set of "fee rules", time, location, difficulty etc.etc.etc.(I'm sure you've heard all this before now),each job warrants its own assessment of a fee.It has worked out pretty well for me to have my fees on a reasonable sliding scale,but each appraisal office I am sure is different in how they assess their fee scdale.I do have a minimum fee for any appraisal work,but its not based on value...... just giving you a heads up.
GaryP: (June 01, 2010 6:29am)
Since NAR seems to be the only industry association to have any clout on the Hill, maybe they can get something done about the attack on compensaton, industry wide. Of course, I sicerely doubt that they will have appraisers and LO's in mind when they go knocking on doors. However, I would hope that they see that an ever dwindling number of LO's and appraisers is hurting the industry as a whole, and ultimately agents as well.
Funrunners: (June 01, 2010 6:28am)
Well It appears to me that the real estate professionals should demand a fair and equitable platform from which to practice there profession. It is not going to help anything fighting among ourselves. Realtor did not stand up for the appraisers or have not yet, the appraisers have no voice and the lender just needs to close a loan. Lets go to bat for each other,not for any unreasonable demands, Simply to be allowed to work in a fair market. the government is getting into places it does not belong. Semper FI SouthlandAppraisersUnion.com
DanSchweihs: (June 01, 2010 6:28am)
“Wage and Price” controls have never worked in the long run except in the limited case of a natural monopoly such as an electric utility or water company. They might work in the short run. But they always fail. Always!!! They usually sound good to voters when called by a different name. “Wage and Price” controls were a miserable failure in the U.S. in the 1970s and have failed in every country since the beginning of history wherever they have been tried. The unintended consequences always harm the group they are intended to help. Always!!!
mark: (June 01, 2010 6:22am)
Reatlors - Its about time. When they have to split their 6% fee they are the first to tell me, a mortgage broker, to cut my fee. Abuyer complained about ther Realtor GARP fee from HER, and their response was that the lender will cut one of their fees to make up for it. A RE Broker actuallly tells their associates that their first response to fees is to tell their client to tell the mtg broker to reduce their fee. Realtors are not really working for their commission anyways. Appraisals have to call a central showing number to schedule appointments. Appr appointments are not even handled by the RE Agent anymore. WE even have Realtors giving access codes to buyers because they dont want to show the home. If the RE Agent want help, then they should help get the aprpaisers fees back and remove the AMC and then help the mtg broker by keeping them in business.
frankgaray: (June 01, 2010 6:21am)
I think a flat fee is a bad idea for realtors or loan officers. Appraisers don't get a flat fee, they get a different fee based on the value and complexity of the property. What really stuck out to me personally about the email is how the realtor considered splitting $17k with his broker made him a 2nd class person. No one wants their commission to be cut, but, $17k? I think a cartwheel is in order! Just MHO.
joecolorado: (June 01, 2010 5:45am)
No matter how hard you work at a situation,your fees should reflect what you consider your worth,it is soon apparent if your self assessment is overvalued.There is no excuse for anyone to state,if you have performed to the terms of the employment contract,that the fees are to be reduced,but,by the way,thanks for bringing a buyer to the table but they now dont like the fee.That question about fees may be contractual, and should have been worked out before the Realtor brought a buyer to the table not after.Just another example of banking arrogance.
FLappraiser: (June 01, 2010 5:38am)
Joel, Your response has missed the target, as usual with realtors. Actually a flat fee would work perfectly, realtors just think they are entitled to more than they are worth. Do you have any idea HOW LONG it takes to do a proper appraisal on a modest home? My guess is not. I on the other hand DO KNOW about sales, since I am also a realtor and have been since 1974, an appraiser since 1966. Please DO NOT try to insult me with all the HARD WORK crap. Realtors are highly overpaid for what they do, I know! Realtors have been telling buyers for years that their service won't cost the buyer a thing because the seller pays the commission. Where does the seller get the money from to pay the commission...from the BUYER! Because the realtor has calculated this amount into the sale price. So, in the end the buyer ends up paying for everything, not the seller. Realtors now fear their gravy train is teetering on the tracks. Appraisers now are working more and receiving less due to the AMC'S.
jgruenke: (June 01, 2010 5:22am)
Actually, a flat fee would not work for the Real Estate community. People in the higher end homes take a lot more time to sell than the one's in the lower price ranges. So, If there was a flat fee of 4k nobody would sell the million dollar homes. Also, if you look at a high end realtor and and lower end realtor you would see that the lower end realtor does more units but makes the same as the higher end realtor. Also, I do not see any bank working hard on short sales... in fact I see the opposite. Currently it takes 4 times the work to close a short sale for half the money. And it looks like everyone forgets that most realtors have to split their commission with their broker so that paycheck is now 5k. You really cannot compare appraisers to Realtors. Appraisers do a lot more units than Realtors. Realtors work a heck of lot more hours on our clients to make sure they find a home and they close. -Joel Gruenke, CDPE Keller Wiliams Philadelphia Region 215-962-4326
joecolorado: (June 01, 2010 5:13am)
Faun,I am appraiser and I feel your outrage pain over your lost fees,BUT appraisers have been dealing with a 30%-50% reduction in fees for over a year with pretty much no help from anyone and no complaint process either.I mentioned on this site,one year ago+/- that Realtor's fees are next and that NAR should be working hard to stop this intrusion as we are all being targeted. believe me when I say this,the banks want a piece of ALL of the money in a property transfer transaction, not just the interest in the deal.Banks are greedy,they get their cake and they eat it too.They will not stop at reducing your fees, but will want to control how you get your money and when,your fees are still a target,whether you deserve the level of payment or not,someone out there in the banking industry thinks you are getting paid too much and they will get their pound of flesh from your hard work.
FLappraiser: (June 01, 2010 4:55am)
Well guys now the egg has been broken, about time. It is UNETHICAL for an appraiser to base the fee on the value of the property. Why is it not also UNETHICAL for a realtor to do the same thing? I am also a realtor and have long believed in a flat fee for sales, graduated of course but based on the complexity of the property, NOT THE VALUE, just like the appraisers. I'm sorry realtors, you do not work twice as hard to sell a $400,000 home as a $200,000 home. So, why shuld you get paid twice as much? It is about time this practice comes to an end.
linda-joey: (June 01, 2010 4:46am)
Faun, I am on the lender side...have you seen what has happened to our compensation in the last few years? Agreed, there is alot of work in a short sale, for both the realtors and the lenders...but that is still a respectable payday.
brokersue: (June 01, 2010 4:36am)
Great topic today guys! Been waiting for you to address this big problem. If this administration could see to putting us Realtors to work instead of putting us out of work we might be well on our way out of this mess! In my market we have seen the values cut in half and the commissions cut lower then they were when it was a crazy sellers market and competition for listings was fierce. I am only working with buyers now and it burns me when I have to show them listings at 2.5%, then a deduction of office fees anywhere from $250-300. The listing broker not wanting to pay the fees their office dictates to keep the lights on. We should be making more, how about 4%-6% for motivation to sell??? The banks are price fixing our commissions to the level that it is not worth getting in the car. By the way, Our forclosures in my town are in the $30K-$60K range, no $10,000 pay days here. I would make more working at Walmart, after expenses. I would like to know where the NAR is??????
brokersue: (June 01, 2010 4:35am)
Great topic today guys! Been waiting for you to address this big problem. If this administration could see to putting us Realtors to work instead of putting us out of work we might be well on our way out of this mess! In my market we have seen the values cut in half and the commissions cut lower then they were when it was a crazy sellers market and competition for listings was fierce. I am only working with buyers now and it burns me when I have to show them listings at 2.5%, then a deduction of office fees anywhere from $250-300. The listing broker not wanting to pay the fees their office dictates to keep the lights on. We should be making more, how about 4%-6% for motivation to sell??? The banks are price fixing our commissions to the level that it is not worth getting in the car. By the way, Our forclosures in my town are in the $30K-$60K range, no $10,000 pay days here. I would make more working at Walmart, after expenses. I would like to know where the NAR is??????
Faun: (June 01, 2010 4:10am)
You lost me at hello. You've just downplayed one of the major reasons the economy and the real estate markets are not recovering as rapidly as they could be . . . because nobody is paying any attention to the non-performing luxury market. It matters not what the amount of the payday is for the Realtor . . . do you guys have any idea how long it takes and how much extra work goes into successfully closing a short sale of any dollar amount? There are no rules, no HAFA guidelines, and the banks are absolutely ruthless with the very Realtors who are bringing them the deals and getting these troubled assets off their books before they are forced to foreclose and lose even more money. If somebody came along and forced you to participate in their losses, to the tune of 33% of your livlihood, you guys would be all over it. But since it's a Realtor making the complaint, oh well, the payday was over $10,000 so what's the problem? Your response lacked any relevance to the underlying issue.