All Forum Posts by: Kim Knox

Some Brokers prefer to not have agents that only do their own sales and listings.  When Agents are the principal to the transaction, the liabilities are exponentially higher. 

Additionally, there are cases when it is actually smart for you to still use another Realtor in your transactions (even if you are licensed). For example, if you are a Buyer AND the Agent in a short sale transaction, a Bank will often deny you a commission when they issue an approval. This has also happened in REO sales, where the required Affidavits disallow Brokers who are Principals to the transaction to collect a commission.

I am not in your State, but I thought I would help. To be a licensed Realtor: Mandatory Association membership costs $600 a year-ish. Monthly MLS fees for each person is roughly $60. There may be initial fees to start up. You could call your local association and get a break down of exactly what fees are required for membership to both the MLS and the Association of Realtors.

To obtain a Real Estate License, it will cost around $500-ish, including the costs of having the National and the State tests proctored once your classes are completed.  Check onlineed.com.  You can take all of the classes online, at your convenience.  proschools.com is another online place to get your license.  I have used both.

Now for the other fees, outside of membership.  The costs per sale will vary, based on the brokerage you hang your license with.  You could be charged by the Principal Broker a % of each commission earned, or they could charge you a flat rate per transaction.  In addition to brokerage fees, you have the typical costs of doing business.  Marketing, gas, etc..       

You are required to work under a Principal Broker as a licensed Sales Person for 3 years.  Find out if the Brokerage you hang your license with will allow property management activity.  Many Brokers find Property Management an unnecessary liability.  

There is a process to just get your license to be a property manager ONLY which does not require the 3 years, but that license limits your ability to act as ONLY as a property manager, and disallows any real estate sales activity.  Best to hang your license with a Brokerage that simply has existing Property Management activity (who already has insurance to protect that kind of activity).  I have no idea of what fees are applicable to Property Managers that are in addition to what I named above.   I just handle my own rentals, without the involvement of my brokerage.        

As a short sale listing agent, the advantage of working with the listing agent is that Agent may talk to you directly and determine if your situation warrants the Seller risking their time on your offer.  I should mention, if you work with the listing agent, it is not the typical negotiation between Buyer and Seller.  It is much more of a collaboration than a negotiation between clients. 

I want to know the answers to several questions before I support a any Buyer's offer.   In my experience, people who are purchasing to occupy a home, who are more emotionally invested, are the better risk.  If you are an investor that may write several offers, but have the financials to back up multiple purchases, that can be fine too.  If you are an investor who has the financials for a single purchase, but I get the impression you have a lot of offers out seeing which one will stick, I will not write your offer.   I will politely tell you I am not in position to take on another client, and suggest you find your own Agent.  

I really don't care if I represent the Buyer for more commission, or if that Buyer has independent representation.  What I care DEEPLY about, is getting an approval for someone who will close the deal.  Approvals are NOT transferable to the next Buyer.       

Some short selling banks actually reduce the commission paid in dual agency situations.  

Getting a short sale in contract prior to it hitting the marketplace has become increasingly difficult, government backed foreclosures now require a listing to be active on the market for 5 business days, and require proof of the listing being live on the MLS (Agent Detail Report to be uploaded into the system the day it goes live). Further, the Agent has to sign (and notarize) an Affidavit confirming that the home was available to the public at large and that open market competition was gained for a minimum of 5 business days.

Not only will MLS fine the Realtor, their is confidential information in the MLS (security system codes, gate codes, key codes, etc...) The liability for this kind of activity extends far beyond a fine from the local MLS board, in my opinion.

Plus in my MLS, if I were to give out my login credentials, it would log me OFF when you accessed. It is a bad idea all around for the Realtor.

Banks have an appraisal to establish fair market value, and that is what they put it on the market for. Their loss or gain is irrelevant. They will often ask the appraiser to give them a price that will enable it to go pending sale within 30 days of being active on the open market (mls).

@Brad Grimmel A sale contract usually has a close of escrow date on it. That would serve as the limit on when the short sale approval needs to have a response, because beyond that date, you would not longer be in a valid contract unless you executed an extension. Our State required short sale addendum gives a deadline on the date approval is required by, but I generally use the COE date in that as well.

Brad, making multiple offers is a tactic used by some investors, and supported by few agents. With short sales, that Listing Agent and Seller can be fighting for months to get an approval for YOU. I always ask the Buyer's agent if they are throwing a bunch of offers around to see if ONE sticks. If the answer is yes, my recommendation to my Seller client (on a short sale) is generally to reject that offer and wait for another buyer. I should mention that my market is low inventory with no shortage of Buyers who will commit to a short sale.

Every good agent has contingencies that protect a Buyer in the event they have to back out. Now if your contingencies are satisfied or inspection periods expired, then you can be at risk. Short sale approval should be one of your contract contingencies, and bank approval is generally required to be in writing. At written receipt of formal approval, contract deadlines commence. You should acknowledge the conveyance of formal approval in writing. This is just how I conduct business, which eliminates the confusion you are currently faced with. Rejections should be in writing too.

Short Sales are very time consuming and often emotional for the Seller. If I go through the time (months) to get an approval for a Buyer and they back out once I have secured formal approval, I am LIVID! What an abuse of my time, and now my Seller Client is that much closer to foreclosure! That makes for a VERY bad day. =(

Short sale approvals are non-transferable, they are specific to the Buyer in contract only. The process needs to start from the beginning again if the Buyer fails to perform.

All offices will be interested in telling you what they offer their Agents. YOU interview THEM, not the other way around. You are an independent contractor looking for an Agency to represent. Find a managing broker that you are comfortable with, and compare the commission schedule and benefits they offer. Then, decide what environment you will be most successful in. The franchises have classes, but so does the local association, and the escrow offices. You can find education everywhere you look as a licensee. You want to find a brokerage that supports your unique set of skills and your aspirations. It is MOST important that Broker you will be reporting to is someone you are comfortable with because Real Estate can be a beast in the beginning if you do not have the support of your Broker. Good luck, the world is your oyster!!

Has Fannie Mae returned all of the bank addendums and executed state contract to you? Until they do, you do NOT have a deal. It can take time to get the executed contract, so it does not mean that it is not in route to you.

Has the sale been marked Pending Sale through the MLS by the LA as a result of your sales contract?

Ask the LA if they have accepted any other offers at this point. They could have just rejected your contract requiring corrections (like if you missed an initial or a date in the contract when it was sent for Seller execution).

My feeling is that the offer was sent back with correction requests. They will not execute unless perfect. The listing agent might have to make a call to the Asset manager to make sure they are accurate in telling you that you are in contract. Getting an executed contract involves a series of steps, particularly in a government REO.

Good luck. You are forced to rely on what the Listing Agent tells you or your agent. You have reason to be concerned, because if they start counting your contract deadline days as of the date you were informed of your acceptance, you could be missing your deadlines and putting yourself at risk of losing the deal.

The rent vs the purchase price is AWESOME (music in the background kind of awesome!) However, most lenders require 1 year of rental history to consider that income, and you will NEED that to be counted as income to refinance, in my opinion. You are already 33% debt to income without even considering any of your other debt as you sit. Without the additional income (from the rental) counted, you might not have the options available that you envisioned to re-finance. I don't believe Homepath will allow you to place another lien on the property for the down payment (I assume the personal loan will place a lien on the subject property).

I don't want to discourage you, because you are smart to add real estate to your monthly revenue (very smart), but this seems like you have limited discretionary income to be financially comfortable in a high risk endeavor.