Commissions Can Not Be Part Of A Real Estate Sales Contract
An interesting situation has been coming up more and more in this depressed San Diego real estate market. REO (real estate owned) properties have become very commonplace. And the banks who own these properties are facing the inevitable fact that they are going to lose money when they finally do sell San Diego real estate that they own. They are however doing whatever they can as far as loss mitigation.
One of the things that banks commonly do is require the realtors who are involved in the transaction to lower their commissions. This is where certain implications arise from a legal standpoint. You see the contract negotiations are between the buyer and seller. Compensation offered between realtors is part of a separate agreement within the multiple listing services.
The root of the problem with requiring that the real estate agents reduce their commission as part of the contract is that suddenly the realtors become principals in that very contract! The only people that should be principals in that contract should be the buyer and seller. Furthermore, if a certain percentage was offered through the MLS and is then reduced after acceptance, it is a major violation of the MLS rules. Banks are actually doing this but there are legal implications that could come back to haunt both the banks and the listing agents.
Comments
Leave a Reply