Ute Ferdig - Greater Sacramento Area

Hello Bill. I feel for you and can only imagine how frustrated you must be. You are right, the insurance amount is indeed exorbitant, but I know that when the banks take out insurance to cover the property because the borrower stopped making the insurance payments, the premium is sky high and I have never understood why. The thing to do would be to try to negotiate with the insurance company and it does not sound like the bank even attempted to mitigate the damages. I don't know if the insurance company placed a lien on the property or not, but they know that they'll get nothing if the property is foreclosed on and it would be in their best interest to adjust the amount significantly.

You asked whether you have a contract and the answer is that you do have a contract that's contingent upon the lender(s) approval of the short sale. While the lenders did approve the short sale, their approval is based on certain contingencies (e.g., they receive a certain amount and escrow close no later than a certain date). The short sale approval letters that I have seen all stated that the lender could revoke the short sale any time prior to receiving the signed approval letter from the seller. Most sellers do not sign the approval letter until they go sign escrow papers, which unfortunately leaves room for changes and revokaction by the lenders. In your case, it sounds like they may have discovered the unpaid insurance bill after they issued the approval letter. Paying the insurance bill would leave them less than the amount on which the approval letter is based, which essentially renders the approval letter useless unless the insurance bill issue is resolved. I would have your agent check with the escrow agent and see if you can get the contact information for the insurance company. Trying to negotiate the bill down can't hurt. Good luck to you. - Yesterday, 15:56

Hello Cc. REO stands for Real Estate Owned and it refers to the properties that are already bank owned. So essentially, REO and foreclosure properties are the same. I am wondering whether you may have heard that REOs are better than short sales. I am not sure if better is quite the proper term, but buying REOs usually does not take so long because the bank does not have to go through the short sale process which can take weeks and months. I hope this helps. - Tue Sep 2 2008, 22:59

Tman. Here's another rant for you. Don't get used to it. I'll go back to ignoring you after this post. Enjoy it while it lasts.

You said:
"consumers looking for and getting discounts on commissions when buying or selling their next home is not my point of view, it's the transformation of an entire industry that is happening - but I thank you for the compliment."

I did not say it was your point of view. I said you only care about your point of view, whatever that may be. You are the one who said "we really don't care what they do in other countries..."

The way I see it, your point of view is that you think you are the only one who sees the change. You are just repeatedly stating the obvious. Yes, for crying out loud, the market has changed. There's nothing new about that. If you had read my post carefully, you'd understand that it's no longer about seeing the transformation. It's about finding a better solution. Shuffling commission money back and forth is not it. It's just a patch. I am not worried about the change. As a matter of fact, I wish there were a real reform, instead of the gradual change.

You said:
"no one mentioned your career and no one hinted, suggested or implied "tell people to get out of the business if they don't like it", that seems to be your translation ... "
~~~~~~~~~~~
You stated in your earlier post: "And your point is..? .. then you need to be in another line of work - simple. " Seems pretty clear to me what you are saying. Since it's all English, there's no need for translation.

You said:
" you've missed the point, profit isn't a 4 letter word ... "
~~~~~~~~~~~
Here we go again. You are hinting that somebody missed the point. Only Tman gets it. Not sure who missed the point this time. I just know that you must be talking about someone else because none of my posts mentioned the word "profit." I guess this was just another opportunity to go on about how the market has changed and how people are looking to pay less and how we better all wake up. Too bad Trulia Voices does not have a sound tool. You'd hear me snoring. I can take only so much of the same thing.

You said:
"realtors, like car dealers are already changing their business model .."
~~~~~~~~~~~~~
Just in case there's still somebody out there who has not heard it yet. Let's state the obvious just one more time. It sounds so much better when you put in different words and fill more space.

You said:
"Lawyers go to school for 7 or 8 years and it costs thousands upon thousands of dollars and then some ... then hopefully, they'll pass the bar exam the first time out ... "
~~~~~~~~~~~
I know you don't like it when we bring up the compensation of lawyers, doctors and other professions that require a post-graduate degree. There are only so many service professions/jobs to which we can refer. If you prefer comparing us to plumbers, electricians and so forth, it does not matter to me. The bottom line is that nobody works for free. A plumber might give you a free estimate, but will not come to your house and do a diagnostic for free. They either charge a flat fee or time plus material.
By the way, which law school offers a 7-8 year J.D. program? I am just curious. Just kidding. The one thing you are right about. It can be expensive to go to law school (even if it only takes 3-4 years to graduate). I guess if we made it just more expensive for real estate agents to get into the business, it would be alright to charge those high commissions. - Tue Sep 2 2008, 18:54

Tman - it's clear that you don't care about anything other than your own point of view. Don't use the "we" when you are really talking just about yourself. Your "solution" apparently is to tell people to get out of the business if they don't like it. Are you now career counselor as well? There's no question that nobody cares whether I make a commission, but that does not mean that I will not get paid a commission and it's up to me to conduct my business in a way that ensures that I will get compensated for the work I do. I am not attached to the commission based compensation model. I am open to anything that's fair for everybody and when you look around and see how others deal with the compensation issue, you might just come up with a solution that could also work here in this country. I know you don't care about how other countries do it, but that's just you. Those who are interested in a solution rather than just agent bashing will look at everything.

There is no question that savvy buyers have the tools to look for houses on their own and they can reduce the # of showings a buyer's agent may have to do. What's your point about that? Just because the buyer now can thift through hundreds of homes online does not mean that all buyers no longer expect their agents to also look for the right house for them too. However, let's assume that I work with a buyer who takes the home search completely off my to-do-list. That still does not entitle him/her to a portion of my commission. If you want a commission, get your real estate license and earn your own. The only way you can pass on a rebate is by continuing to charge the seller a high enough commission so that you can give a rebate. Well, the seller also wants the commission cut because the seller does not want to pay the buyer's full commission now that it has become so easy for the buyer's agent (I don't think it has become easier, but I am just going along with this for the sake of argument). Soon enough, there's no money left to rebate to the buyers. The whole idea that the seller should pay the full buyer's commission so that the buyer's agent can pay a rebate to the buyer is simply ridiculous. If a seller wants to give the buyer a buyer's incentive, let them do it directly, not through the buyer's agent. It would be much cleaner if everybody just paid for the services that they use instead of making the seller pay for the buyer's services and then the buyer's agent gives part of that money to the buyer because he/she really did not deserve all the money. What a bunch of nonsense. Just because rebates are more common now than they were 5 years ago does not mean that they are making sense and that they'll be the way of the future.

In closing, I am in favor of a compensation model that is fair to everybody and I am open to a healthy discussion. I am not interested in comments from those who don't care about finding a workable solution. Stop complaining and running amok with rebates. Become part of the solution that benefits everybody. - Tue Sep 2 2008, 07:11

Jared. Thanks for the reply post. It looks like you'd be willing to pay for services you use in exchange for not being locked into a contract. I believe if everybody were willing to pay on a per use basis, there would not be a need to have a term contract. The problem with the strictly commission pay is that you can spend many hours and never get paid because the client decides to have someone else write up the offer. This does not only happen when the client is dissatisfied with the agent. It would be interesting to find out how real estate agents get paid in other countries. I know in my home country, real estate agents get paid even more and you also have to pay an attorney to write up the contract and handle the recording, similar to how things are done in non-escrow states. How do real estate settlement attorneys get paid (by the hour, flat fee, percentage???). - Mon Sep 1 2008, 20:35

Jared. Sorry, I beg to differ. The topic here is whether Realtors should charge a percentage commission. That's different from just charging a commission. I have yet to see a constructive post that actually suggests a better solution. Everybody seems to be really eager to criticize the current compensation structure, but nobody has bothered to suggest a viable alternative. It seems like all the consumers are very happy when we work for free. What kind of compensation do you suggest. If it's not commission based, how do you propose real estate agents should be paid? Any constructive comments will be appreciated. - Mon Sep 1 2008, 19:52

Boy Oh Boy!!! Another thread gone bad. Why is it that any time someone asks a question about commissions and/or compensation for real estate agents, there's so much hostility coming out in the thread? I think there's room for improvement and I would certainly welcome a healthy discussion of the topic without all the venum. It's one thing to criticize the current compensation model, but it's yet another to come up with something that's better and fair to everybody. Comparing real estate sales people to car sales people, doctors, lawyers and the like really does not add a whole lot to the solution of the problem. The tasks that a real estate agent performs are not comparable to what a car sales person does, nor do they compare to what a doctor or lawyer does and we are governed by different rules and laws.

Whether the compensation is based on commission or an hourly rate, there's always the argument that the agent either had no motivation to negotiate a lower price or artificially inflated the hours worked on a transaction to make more money. Perhaps a flat rate service would be fairer, but it would have to be paid independent of success. The fee would be significantly lower per transaction, but it would be charged for every listing and paid up front. This way, those sellers that actually close no longer have to pay for all those that don't close. Furthermore, if buyers also pay for their agent's services, it's possible to charge sellers a lower flat rate fee because they no longer pay the buyer's agent. I am not sure what the best and fairest compensation model would be. I just know that calling real estate agents every name in the book and putting them down every chance you get does nothing to come up with a better compensation model that works for everybody.

To Shouldibuy. I am wondering whether you feel that you received a helpful answer to your question. I would also like to ask you a question. What kind of compensation would you consider fair for a buyer's agent and who should pay for it? Since buyers typically do not pay their agents, I am really curious to hear what solution you'd consider fair. This is a serious question, not an attack on your original post. - Mon Sep 1 2008, 16:53

Hello P. You already know that it's not the correct price and I would think that the agent corrected the mistake by now, but even if they did not, they still don't have to sell it to you for $41,900. The website is an invitation to make an offer, but it's not an offer to sell at the stated price. Otherwise, you'd just send an acceptance, not an offer. I am sure the Countrywide website also contains a disclaimer concerning accuracy of property information. When you see an advertisement in the paper for a car and the price is wrong, you can't go in the store and demand they sell it to you for that. However, if the mistake is small enough, the merchant may agree to honor the advertised price just to keep the customer happy, not because he/she is legally obligated to sell it for the advertised price. If it's a true mistake, there is no issue with false advertisement either because there was no intention to deceive or mislead. - Tue Sep 2 2008, 08:41

Hello Milan. When you look at the per square foot price for a home, that price includes the value of the land. For appraisal purpose, the value of the 66 sqft of gross living space is not determined by multiplying the overall per square foot price by 66. When you look at the appraisal report and you look at the sold properties that the appraiser used for the appraisal, you'll see adjustment amounts to account for differences in GLA (gross living area) and you'll see that 66 sqft does not diminish the value of the property by almost $25,000. Unless the lesser GLA affected the appraised value to the point that it appraised below the contract price, I am pretty sure that the lender/seller will not agree to a lower price as they don't guarantee you a specific per/sqft value. You can submit a request, but I would not get my hopes up. This may not be what you hoped to hear, but it's based on my experience with lenders. Good luck to you. - Mon Sep 1 2008, 20:06