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Short Sales in CT > Blog > Bank of America: Understanding Short Sale Agent Commissions
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Bank of America: Understanding Short Sale Agent Commissions

December 5, 2012


Understanding Short Sale Agent Commissions
Bank of America pays commissions to licensed real estate professionals who close acceptable short sale transactions.

Commissions are:
  • Allocated from the sale's proceeds to qualifying real estate agents or attorneys at closing
  • Calculated as a percentage based on the total/gross sales price of the property
  • Usually divided between the buyer and seller agents, as per mutual agreement
The maximum commission for all acceptable transactions is as follows and is paid when the short sale reflects positive mitigation:
Sale Price
Maximum Commission
$0 - $49,999
$3,000
$50,000 - $999,999
6% of the total price
$1 million - $2 million
5.5 % of the total price
> $2 million
5% of the total price
Flexibility is allowed in the commission structure when the short sale does not reflect positive mitigation* or if the minimum acceptable net proceed** is not met. In these circumstances, the real estate agent may choose to reduce his/her commission to meet minimum mitigation requirements.
Exceptions:
  • Dual agents unrelated to either party will receive a 4% commission
  • In some situations, commission is limited per investor guidelines/investor approval and may vary
Acceptable and Unacceptable Short Sale Transactions
In an acceptable transaction, commissions will always be paid within the following guidelines:
Related Party
Connection
Commission Paid?
Buyer (Including Individuals Representing Entity Buyer)
Representing self with valid license
Yes
Related/affiliated with selling agent
(agent representing buyer)
Yes
Related/affiliated with seller
Short sale declined
Related/affiliated with listing agent
Short sale declined
Acting as the listing agent
(agent representing borrower)
Short sale declined
Seller (Homeowner)
No connection to any party
Yes
Representing self with valid license
Short sale declined
Related/affiliated with selling or listing agent
Short sale declined
Related/affiliated to buyer
Short sale declined
Acting as selling agent
Short sale declined
Dual Agent
Dual agent unrelated and unaffiliated to buyer or seller
Yes
All others
Short sale declined
* Positive mitigation is the amount of loss Bank of America will mitigate by accepting the short sale as opposed to foreclosure.
** Minimum acceptable net proceed is the amount the investor requires to complete the short sale transaction.
An eligible short sale transaction is made on an arm's-length basis, meaning the buyer and the seller have no personal, familial or professional (business associate, business interest) relationship and the property is listed for sale on the open market at fair market value. There may not be any actual or implied conflicts of interest.

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