Who Pays the agent on an REO

12 Replies

I am interested to learn if the bank pays or does the buyer pay the agent on an REO. Also I know everything is negotiable but the website I see say they won't. Any advice from someone how knows?

The seller, i.e., the bank in an REO, usually pays the agent's commissions. That's how it worked with our last 2 REO purchases.

If anyone's heard of an exception, please let us know.

The commissions for REO are taken from the seller's side of the HUD1, so the seller ends up with a lower net amount. Of course, the only party bringing money to the closing table is the buyer ... But the purchase price to the buyer is unaffected by the commission.

Originally posted by Brian Colbert:
Thank you Mitch, an Orange county Man nice to meet you.

Thanks Brian. We've been BP colleagues for a month or so now. Hope all is well.

A lot of busy right now, not all good busy however..... But working with some big money guys trying to get them to cut loose on the funds. We will see. P.S. My bad I am running on over drive.

The seller typically pays for the commissions, but be careful of broker's adding on additional commission to the buyer side. This is often called a Broker Fee, Broker Transaction Fee, Document Storage Fee, or etc. This is often stated in the original offer. These fees are "ALWAYS" negotiable. Remember, the seller is already paying for the buyer agent's commission. The broker fee can be paid by the buyer's agent to their brokerage.

The Seller authorizes the payment to the Broker however I am on the side that all costs are actually paid by the buyer. The problem is that a Broker is always attached therefor in this situation not much can be done.

Originally posted by Steve Babiak:
The commissions for REO are taken from the seller's side of the HUD1, so the seller ends up with a lower net amount. Of course, the only party bringing money to the closing table is the buyer ... But the purchase price to the buyer is unaffected by the commission.
As everyone has stated, the seller (bank) pays the RE commissions, however, I disagree with Steve's entire statement for only one reason. The purchase price IS affected by the commission. Ultimately, the buyer pays for everything, transfer taxes, escrow, title, etc because they are the ones bringing the cash to teh table. If the seller did not have to pay any commissions, the purchase price could theoretically be lower!

Here we go again.We need to stop classifying broker/agents as REALTORS.

Not every broker/agent is a REALTOR.That doesn't mean they are less competent just that they got tired of paying bloated fees to the old NAR.

The real estate commissions for each state give a rat's #ss about the NAR.All they care about is license laws and protecting the interests of the public.

REALTOR designation is subscribing to their CODE OF ETHICS.Doesn't mean you have no ethics if you are a broker or agent an not a REALTOR.

Theoretically you could also argue banks could lose their shirts not having qualified brokers on the ground level handling their assets.

What banks pay is cheap in commissions compared to the infrastructure that would be needed to do everything in house.

Whether that buyer buys direct with the listing broker or uses a buyers broker the cost is the same BECAUSE the bank allocates for the total commission payout at the time the asset manager assigns the listing to the broker/agent.

It will just be xx percent on the HUD to 1 brokerage or split between the buyers broker and the sellers broker.

I am talking about the REO side in general and not short sales,etc.

Arent you suppose to use one of them fancy circles with a R in the middle when referring to a Realtor?

I always thought that was the only difference... ® Certainly not ethics...

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