Monthly Archives: October 2013
DATE: October 24, 2013
RE: Broker Commission on HUD Home Sales
Per the US Department of Housing and Urban Development (HUD), commissions are split 50/50 with a maximum of 6%. Listing Brokers may earn up to 3%. Properties listed as Hard to Sell may earn a minimum commission of $1,250.00. A Selling Broker may earn up to 3% commission, but may also choose to reduce their commission to increase the net to HUD.
Per Section 3: Compensation in the Notice to Real Estate Brokers Neighborhood Listing Broker Services Agreement, after the property closing has occurred, HUD will pay up to 6% commission to be equally split between the NLB and Selling Broker. HUD will only pay commission after the property closing has occurred, and not merely upon production of a willing and able buyer. HUD will not pay commission if for any reason closing does not occur. The NLB is permitted to sell homes they list, except where prohibited by state or local law.
Bids accepted during the Lottery Period are not commission eligible. HUD will not pay commissions for participants in the Good Neighbor Next Door (GNND) Program, Government Agency purchases, and Non-Profit purchases. The qualifying Buyer receives a discount of 50% off the sales price for GNND. However, HUD does not pay a Buyer’s Closing Costs or Real Estate Broker fees on the purchase of property through the GNND Program. Closing documents should not show HUD as a source of funding for the Buyer’s Closing Costs or Broker fees. If the Buyer is purchasing the home with a FHA mortgage, the Buyer may include in the mortgage amount all of the Buyer’s reasonable and customary closing costs (including prepaids) and Real Estate Broker fees, and make a down payment of only $100.00. A Buyer using a financing option other than a FHA mortgage must comply with the terms and conditions of the selected mortgage lender.