(MRIS, Dec. 31)–Recent Market Conditions have seen a rise is the number of Short Sales. A Short Sale is an arrangement with the seller’s lender allows the property to sell for less than the amount of the current mortgage and closing costs. It is imperative that an advertised Short Sale Price first be approved by the lender. Short sales are complex transactions for the seller, the listing agent, the buyer and the selling agent. MRIS has added two pick list items to assist both listing and selling agents”Short Sale” has been added under the “Current Financing/Loan” pick list. The listing agent should select this field to disclose to other MRIS subscribers that the property is subject to a Short Sale and in addition to the seller, the lender will have to approve the buyer’s offer.
One of the issues surrounding Short Sales is Commission. To reduce the expenses associated with a short sale, the lender may insist on a commission fee reduction. The commission amount listed in MRIS is the amount that the cooping broker can expect to get paid for procuring the sale of the property. An additional pick list item, Comp-Subject to 3rd Party Approval, has been added to the Contract Info Pick list.
According to the Rules and Regulations, the obligation to compensate a cooperating broker may be excused by an Arbitration Board if through no fault of the listing broker or agent and the listing broker/agent exercised good faith and reasonable care it was impossible or financially unfeasible for the listing broker/subscriber to collect commission per the listing agreement. An Arbitration Panel should consider all relevant facts and circumstances including when the listing broker knew that some or all of the commission would not get paid and when it was communicated to the cooperating broker.
Only an Arbitration Panel can determine if the coop commission can be reduced or eliminated. MRIS does not conduct Arbitration Panels. Arbitrations are handled by the local Shareholding Associations.
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