Buyer's agent commission

[Zoe]

Seeing more and more contracts where seller is paying buyer agent's commission. Contract will state something like seller is paying 3% of purchase price to selling broker (broker assisting buyer) at closing as a concession to buyer.

 

[Tom D]

Also starting to see a breakdown on the MLS sheets, but not sure about that. Fannie has given no clues as to how to handle it, but i don't think it's a concession in the way we have been using it.
The problem to me, did that affect the sale price. In some neighborhoods they will all have that, or none of them will have, that buying concession. Now when it's mixed up how do you figure that out.
The ones here, seen buyer actually paying their agent, the sale price hasn't been over the list price, maybe lower. But is the interest rates affecting that also right now.

More little bear traps to put my appraising foot into. Just can't wait for the new uad to roll out, to completely kill my desire to do them, even part time. Well, maybe part time won't be so annoying.
My direct lenders don't annoy me. And some new ones, just learn what stupid they want in their report.

 

[Zoe]

Also starting to see a breakdown on the MLS sheets, but not sure about that. Fannie has given no clues as to how to handle it, but i don't think it's a concession in the way we have been using it.
The problem to me, did that affect the sale price. In some neighborhoods they will all have that, or none of them will have, that buying concession. Now when it's mixed up how do you figure that out.
The ones here, seen buyer actually paying their agent, the sale price hasn't been over the list price, maybe lower. But is the interest rates affecting that also right now.

More little bear traps to put my appraising foot into. Just can't wait for the new uad to roll out, to completely kill my desire to do them, even part time. Well, maybe part time won't be so annoying.
My direct lenders don't annoy me. And some new ones, just learn what stupid they want in their report.

That is another thing. It cost NAR a bunch of money. This is a result of the ruling on NAR to correct disclosures to the consumer.

It is not like the seller is saying I will pay all your closing costs in the amount of $X.

I got your point.

 

[Zoe]

My hope is CFPB will jump on HUD on truth in lending disclosures soon. It may happen on separation of appraisal fees. You never know?

 

[Zoe]

Until you know. I have emailed them. There is a battle going on with separation of fees on appraisals.

I have that fact in my brain.

Lobbyist are in the mix. I have that fact in my brain.

CFPB won't play when it comes to the consumer. You can bank that.

 

[Larry Phillips]

Seeing more and more contracts where seller is paying buyer agent's commission. Contract will state something like seller is paying 3% of purchase price to selling broker (broker assisting buyer) at closing as a concession to buyer.

Good morning, it seems that appraisers are interested in the amount paid by a buyer for a property. How that payment is allocated or used by the seller is a moot point.

 

[J Grant]

look up RE mortgage websites such as Rocket Mortgage ( where they explain that a seller paying a buyer broker commission is not viewed as a concession)
look it up on the Fannie/Freddie website where they do not consider seller-paid buyer agent commissions as outside the concession tolerance limits

Did you folks believe that NAR, the RE brokers, GSE's, and lenders would let concessions treatment of it stand? They protect their commissions and allies fees in the tens of thousands of dollars.. Only the appraisal dinky fees in the hundreds of dollars are subject to TRID and phony concerns about saving the consumer money.

 

[J Grant]

Fannie Mae and Freddie Mac will not count buyer’s agent commissions as part of their allowable interested party contributions (IPCs), according to announcements from the government-sponsored enterprises (GSEs) on Monday.

The GSEs noted that this guidance was not an update to their selling guides but a clarification on the treatment of seller-paid real estate agent fees.

Based on the selling guides in use by the GSEs, property sellers are allowed to make financing concessions toward the borrower’s closing costs at a maximum amount of 2% to 9% of the property value. In their guidance issued on Monday, the GSEs note that “fees or costs customarily paid by the property seller according to local convention are not subject to these financing concessions limits.”

“Buyer agent fees have historically been fees customarily paid by the property seller or property seller’s real estate agent, and, as such, they are currently excluded from these financing concession limits,” according to the statement from Freddie Mac.

Moving forward, the GSEs say that if these fees continue to be “customarily paid by the property seller according to local convention, they will not be subject to financing concessions limits.”

These clarifications come after the National Association of Realtors (NAR) reached a nationwide settlement agreement with the plaintiffs in the commission lawsuits. If the settlement is approved by the court, although agents and home sellers will not be able to list offers of compensation on the MLS, home sellers may still offer to cover the buyer’s agent fees if they so choose.

 

[Zoe]

Good morning, it seems that appraisers are interested in the amount paid by a buyer for a property. How that payment is allocated or used by the seller is a moot point.

I agree Larry.

 

[Zoe]

This is my point. It cost NAR a bunch of money. Now you know why you are seeing it more in sales contracts.

https://connectmls.smartmls.com/hc/en-us/articles/28046916675099-NAR-Settlement-and-the-MLS-An-In-Depth-Guide

There is a reason for truth in lending disclosures and ethics.