Pursuant to a new NWMLS short sale rule, selling offices will no longer have to lower their commissions on short sales if the seller's creditors require that the total commission be reduced.
NWMLS Rule 101(g) currently provides that if a sale is a short sale and the seller's creditors require that the total commission or the selling office commission be reduced, then the listing office and selling office commission will be reduced equally. It allows the selling office's commission to be reduced without the selling firm's written consent. This rule will be deleted effective December 12, 2012. For short sales listed after December 12th, selling offices can be paid as stated in the listing. Thus, the listing firm will have to bear the entire loss if the creditor requires that the total commission be reduced. For short sales listed before December 12th, Rule 101(g) will still apply.
This means short sale commissions will no longer be subject to lender approval. If the bank refuses to pay more than a certain amount toward commission, the selling office can still be paid as published in the listing. According to NWMLS, Rule 101(g) is no longer necessary because Fannie Mae and Freddie Mac both have policies regarding short sale commissions and there is less uncertainty about how much commission a creditor will pay in a short sale. This will allow selling offices to collect their full commission on short sales.
For more information on rules affecting the short sale process, contact a Seattle Real Estate Attorney.
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Kirkland, WA 98033