SmartMLS Commission Rules are now Easier for Short Sale Listings!

Posted on 13. Feb, 2018 by ctlms in Blog, My Blog, News, Real Estate, Short Sale

SmartMLS Rules and Regulations now allow agents to advise other agents how commission reductions would be handled.

SmartMLS rules and regulations "Section 7.1.0 Disclosure of Potential Short Sale. Participants may, but are not required to, disclose potential short sales to other participants and subscribers. When disclosed, participants may, at their discretion, advise other participants whether and how any reduction in the gross commission established in the listing contract, required by the lender as a condition of approving the sale, will be apportioned between listing and cooperating participants."

I recently reached out to MLS Compliance and confirmed that it is now allowed for agents to offer an actual % to co-broke on the MLS and describe how any reductions to commission required by the lender would be handled.

As an example;

Your listing could offer 2.5% to co-broke, check the box for Potential Short Sale and in the Short Sale Comments state something like "Any reduction in commission, required by the short sale lender, as a condition of the short sale approval, will be split 50-50".

NOTE THAT THIS IS JUST AN EXAMPLE.  Check with your broker or office manager for your company policy on this.  Also, note that I would suggest including the language in the Compensation Notes Section since it is right near the commission offered section on MLS printouts.

The update to these rules should no longer make it necessary to list short sales at $1 co-broke to protect against cuts required by the short sale lender.

Brokerages may want to review these rules and determine if updating their company policies is in order.

Sean Wilder

Loss Mit Services

Mortgage Forgiveness Debt Relief Act Extended for 2017

Posted on 10. Feb, 2018 by ctlms in My Blog, Real Estate, Short Sale

The IRS tax exemption that many homeowners used to avoid takes from a short sale or other mortgage debt forgiveness has been retroactively extended to cover 2017.

This exemption was originally signed into law in 2007 and has expired and been extended a few times over the past several years. The last few times it was extended, it was near the end of the year after it had expired.  In those instances, it was made retroactive to cover the current year and was signed into law in Dec of that year.  The last time it was extended was in Dec 2015 and covered 2015 and 2016.

In 2017 the law was not extended at any time during the year and Jan 1 2018 came without any extension being signed into law.  On Feb 9 2018, as part of the bill signed into law to end the 2nd Government shut down of the year, this tax exemption law was extended to retroactively cover 2017.  It still does not cover 2018.

So what does this mean?

Any homeowner who had debt forgiven from a "Purchase Money Mortgage" on their "Primary Residence" in 2017 can use this exemption to completely avoid any of that debt forgiveness from being added to their ordinary income and taxed.  This exemption does not cover all mortgage debt forgiveness though.  If the property was not your primary residence for 2 of the last 5 years or the mortgage debt was a cash out refinance, you would not qualify.  But still, many more homeowners will benefit from this extension.

More about this exemption can be found at this link to the IRS website.

Link to Bill

Link to notice on IRS website

Sean Wilder

Loss Mit Services