As delighted as I was over the announcement a while back that Fannie Mae short sales will pay full commissions on my Sacramento short sale listings, there seems to always be a twist in this business. It comes with the territory of being a Sacramento short sale agent.
Sacramento short sales are always on my mind. But this morning, I am thinking about my home state of Minnesota. Pondering whether Princess Kay of the Milky Way will get her head sculpted in butter for the Minnesota State Fair this year or whether Fair officials may opt to carve a hunk of butter into a likeness of Michael Jackson, like the organizers of the Iowa State Fair are planning.
I'm wondering how Senator Franken feels after his 8-month battle to take over Senator Coleman's seat. If victory tastes sweet or somewhat bitter after the long struggle. Will Franken make a difference as the 60th Democratic senator in Washington, giving Democrats the majority vote?
But reality snaps me back to the present. I've been working on one of my Sacramento short sales for 2 months when suddenly the lender announced it was outsourcing the file. The loan is held by Fannie Mae. It also is insured through PMI, which ordinarily isn't a problem. Typically, it just takes longer.
In this instance, a third-party vendor called yesterday to cheerfully announce that Fannie Mae will approve a full commission. In the same breath, she said her agreement with the short sale bank allows her to collect 1% of the sales price as a commission, on top of a $250 administration fee. This is like an REO lender hiring an asset manager to handle foreclosures. Both dip into the listing agent's commission.
The main difference is foreclosure agents handle a huge volume to absorb the hit while short sale agents typically do not.
It's bad enough that short sale banks try to cut agent commissions, but this development removes all incentive to treat Fannie Mae loans in a preferred status, plus it dings short sale agents' pockets even further. Pretty soon we Sacramento short sale agents may be paying the bank for the privilege of producing a short sale buyer.
Oh, wait, we already are.
Elizabeth Weintraub is an author, columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you.
The Short Sale Savior, by Elizabeth Weintraub, available in bookstores everywhere and at Amazon.com.
Sacramento Short Sale Agent, Elizabeth Weintraub, has the answers to your Sacramento short sale questions.
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Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.
Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
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The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
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Elizabeth
Hats off to Princess Kay. I kind of like the idea that people in Minnesota carve up butter. It seems everyone has their hand out these days for money.
I wonder who came up with that brilliant idea. Let's see the person that is going to get me out of this mess is the one that i should penalize the most.
I saw a Michael Jackson sand sculpture on television and it was kinda creepy, but then... nevermind. My in house REO listing agent just found out she has to pay a higher referral on this one company's listings. WTH?
Ewwwww....I have an idea....one we should all advance to congress...for every 100 short sales that listing agents close, they get $100,000 taken off their mortgage Or put toward the mortgage of their choice...how's that....can't decide if we want to get a snowbird hideway....or.....
Hi Tammy: Banks are finding ways to cut into our commissions all right. I'm confident that Flagstar looked at this particular short sale and asked themselves why should they put the burden of a Fannie Mae short sale approval on its already overworked staff when it could hire an outside company to do the work and take the agent's commission to pay for it.
This little twist has put my sellers back to ground zero, restarting the clock at another 45 days to approval.
Elizabeth, that's probably why Fannie Mae agreed to pay full commission earlier this year, just so they could outsource it and dip into our commission again. I figured there was a catch!
Sharon
Elizabeth,
That is something new to me. My last few closings come at 5% and the note that the Lender is not a Fannie Mae and Freddie Mack Lender
Wow. That's a new one. If this listing is signed with you, how can they outsource without your authorization? That is definitely something I need to wrap my head around.
Hi Melissa: They can outsource because they are approving the commission, and it just so goes that the bank is not approving a full commission payment to the listing and selling brokers. If we say no to the 1% fee to the third-party vendor, the bank will reject the short sale, which will harm our sellers to whom we have a fiduciary relationship. They've got us between a rock and a hard spot and don't care if they squeeze gonads, to be frank about it.