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benjamin
2820 Posts |
 Posted - 03/31/2008 : 1:13:44 PM
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We have been working with a client for months,an independant Realtor has shown her at least 50 houses, made offers a 2 REOS,not accepted.
After all this time,she has a family frickin realtor friend that says he will give her back cash $2000 from his potential $3,000 commission, if she will go with him.
If I assume this is not legit, would I be correct? |
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benjamin
2820 Posts |
Posted - 03/31/2008 : 1:18:24 PM
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| The buyer has no real estate afilliation. |
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slants
4281 Posts |
Posted - 03/31/2008 : 1:21:20 PM
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quote:
Originally posted by benjamin
We have been working with a client for months,an independant Realtor has shown her at least 50 houses, made offers a 2 REOS,not accepted.
After all this time,she has a family frickin realtor friend that says he will give her back cash $2000 from his potential $3,000 commission, if she will go with him.
If I assume this is not legit, would I be correct?
Cash no, but realtor may issue credit to buyer through escrow. |
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goodguy1
1681 Posts |
Posted - 03/31/2008 : 1:23:38 PM
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I would have to say it is not legal..
if you can't prove it (cash deal) then there's not much you can do.
Just advise the client that with all of the scrutiny going on in toda's mortgage transactions, you'd hate to see him/her on the front page of the news!
my .02 |
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americanheartlan
2237 Posts |
Posted - 03/31/2008 : 1:24:24 PM
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| I've had a Realtor do this to make a short sale work. |
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benjamin
2820 Posts |
Posted - 03/31/2008 : 1:28:25 PM
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He said he would give her cash after closing.
If it is a credit on HUD, I can almost understand.
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jkurland
261 Posts |
Posted - 03/31/2008 : 1:29:08 PM
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| I know that several of the realtors here (in GA) and in Virginia offer a "buyer rebate" of up to 1.5% of the sales price. I have no idea how it is structured, but with so many of them offering it, I am certain the lawyers have already figured it out and it is legal. |
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goodguy1
1681 Posts |
Posted - 03/31/2008 : 1:31:01 PM
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you know I just remembered that article and news story about Redfin Realty out West..they were doing all kinds of these transactions..
I stand corrected..I guess. |
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CoralSnake
11184 Posts |
Posted - 03/31/2008 : 1:33:45 PM
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| If it is done as a refund after closing, it may not be legal, but not much you can do about it. |
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slants
4281 Posts |
Posted - 03/31/2008 : 1:39:09 PM
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quote:
Originally posted by CoralSnake
If it is done as a refund after closing, it may not be legal, but not much you can do about it.
Kind of foolish for a realtor to rebate cash post closing. After paying income taxes on the $2,000 rebate out of the other $1,000, he'll be lucky to have made $500. I guess there is no accounting for greed and stupidity. |
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Tsnyder
8301 Posts |
Posted - 03/31/2008 : 1:39:13 PM
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Plain and simple... every dime that changes hands in a
real estate transaction must be disclosed on the HUD1.
Any outside promises or after-the-fact kickbacks
are illegal and unenforceable.
Tsnyder |
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Tsnyder
8301 Posts |
Posted - 03/31/2008 : 1:46:57 PM
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No... many do it because they're ignorant of
the law. Others do it because they just don't
give a damn... still others because they're
arrogant and believe they won't get caught.
quote:
Originally posted by Banker0679
??? so that's why everyone does it!
quote:
Originally posted by Tsnyder
Plain and simple... every dime that changes hands in a
real estate transaction must be disclosed on the HUD1.
Any outside promises or after-the-fact kickbacks
are illegal and unenforceable.
Tsnyder
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mganovsky
2114 Posts |
Posted - 03/31/2008 : 2:00:17 PM
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It would fall under "interested party contribution" to reduce buyers closing costs. On the other hand it is up to the lender; more and more on the instructions to the closing agent it states " realtor can not contribute to closing costs. I think if it is stated in the PA and it is up front to the lender then the U/W would approve it.
Per the sellers guide: All contributions may be paid by any interested party to the property sale transaction, although limits will be imposed on the amount of contribution allowed. At the end of the section it also stipulates; that any monetary transaction between the seller and buyer or an interested party that is not lited on the HUD1 and done after closing is not legal and the loan can not be delivered to fannie mae.
The above can be interpreted any way you want. I would call the lender you want to send the deal to so as to make sure they allow it. |
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rtrefflich
3862 Posts |
Posted - 03/31/2008 : 2:05:38 PM
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I've credited RE commission for closing costs on the HUD and have never had a problem with it. as long as the lender agrees and it is noted on the HUD it should be fine. If it is a cash deal it is not fine. Agents used to advertise that they would credit back 25% to the buyer to use them as the buyers agent.
Don't know why anyone would credit back cash, are you going to 1099 them for the cash you gave them?
quote:
Originally posted by mganovsky
It would fall under "interested party contribution" to reduce buyers closing costs. On the other hand it is up to the lender; more and more on the instructions to the closing agent it states " realtor can not contribute to closing costs. I think if it is stated in the PA and it is up front to the lender then the U/W would approve it.
Per the sellers guide: All contributions may be paid by any interested party to the property sale transaction, although limits will be imposed on the amount of contribution allowed. At the end of the section it also stipulates; that any monetary transaction between the seller and buyer or an interested party that is not lited on the HUD1 and done after closing is not legal and the loan can not be delivered to fannie mae.
The above can be interpreted any way you want. I would call the lender you want to send the deal to so as to make sure they allow it.
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CoolMtgGuy
4064 Posts |
Posted - 03/31/2008 : 2:06:36 PM
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| Like Tsnyder said, if it is on the HUD, it is legal. In CT, I never saw any buyer rebates but it is very common here in Florida. If a buyer has an opportunity to share in the re agent's commission, that is hard to beat ... and can you really blame the buyer? |
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monarchdad
1811 Posts |
Posted - 03/31/2008 : 2:08:18 PM
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| There is absolutely nothing illegal about a Realtor crediting back some of their commission to a buyer. Your other Realtor just basicly got undercut. |
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benjamin
2820 Posts |
Posted - 03/31/2008 : 3:05:26 PM
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TSnyder, Mgan, I would tend to agree with you, especially today with all the scrutiny.
I did not realize it was so prevalent elsewhere.
At this point and time, I believe I will contact the State of Michigan.
Thanks for everyones input, it not cut and dried. |
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