Bank Of America Cutting Commissions?

In the continuing struggle for anyone to accomplish a short sale (we hear that about 70 percent of short sales fail), we recently heard from several Northern California short sale agents that Bank of America began cutting commissions to 5 percent on most of their deals.

This new commission cutting seems against “guidelines” considering that we saw a top Bank of America VP speak to an auditorium full of real estate agents in San Francisco that Bank of America remains committed to a fair and equitable system of compensation for the work done by real estate agents in the short sale process.  The B of A VP mentioned that the percentage amount may be based on investor and/or mortgage insurance guidelines, gross offer amount, and other factors.

With no specific investor guidance, Bank of America claims they typically pay a 6 percent commission with a $3,000 minimum on the majority of short sale transactions, scaling to a minimum of 5 percent on transactions exceeding $1 million.

Why should this commission cutting matter to anyone expect agents? Homeowners who need to short sale will find that the few short sale agents who know how to structure a short sale will find less incentive to battle the banks on their behalf if they see the banks automatically cutting the commission. If servicers such as B of A claim the cut is result of “investor guidelines” then either the servicers need do a better job of going to bat for the agents (not likely) or the agents will have to show their value directly to the investor.


Filed under Banks, San Francisco, short sales

2 responses to “Bank Of America Cutting Commissions?

  1. Whyis Thisfair

    BOM and FNMA have reduced their commissions paid to Realtors®. Boycotting might violate the Realtor® Code of Ethics. However, real estate brokers and agents not affiliated with NAR can easily and in very good conscious stop showing Bank of America and Fannie Mae properties.

    • ladyrock

      You do make a good point. Most banks will say that the commission is based on investor guidelines. It’s all about what the bank nets. To make a true case, agents should get the weight of NAR or CAR or whatever organization they belong to and push back on the banks.

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