Friday, April 30, 2010

Latest on Real Estate Commissions By Michael Henry O. Smith

In the global news today, real estate commissions are making a lot of wave. If it is not the Canadian Real Estate Association struggle with the competition bureau, it will be a Realtor chastising another Realtor for having a reduced commission structure to help sell condos, etc.

Real estate as a legal term in some jurisdictions like the United Kingdom, Canada, USA, Australia and The Bahamas that includes land along with improvements in it, such as buildings, fences, walls and other site improvements that are fixed in a location and can not be moved is distinguished from other terms like real property and assets.

This is to say that when we mention real property, we refer to the land with other inclusive things on the surface like trees, mineral resources and other related structures. Real property can be referred to as a permanent nature such that has the interest, benefits, and inherent rights thereof.

Whereas real estate talks about developing and the developed inhabitable structures such as mansions, sky scrapers and so on. Recently, the Obama administration opted to expand its $50 billion plan to reduce home foreclosures.

This new program is aimed at helping some troubled homeowners to modify their second mortgages or piggyback loans. Under this arrangement, the treasury department will offer cash intensives and subsidies to lenders who agree to substantially reduce the monthly payment on second mortgage or forgive those loans entirely.

This plan will restrict an opening in the administration usual program, which offered subsidies to lenders who agreed to modify the primary or first mortgages of homeowners who had fallen felonious or were in risk of doing so.

Meanwhile, millions of homebuyers have utilized the second mortgages to buy houses with little or no down payment or to invest on home improvements and other acquisitions. Even though they have been called up to renegotiate, it has been predicted that at least 4 million homeowners will face foreclosure proceedings this year, up from about 2.2 million in 2008. Administration officials said about half of those people had second mortgages.

However, every real estate commissions are negotiable. There is no problem with negotiating a commission, the aim is to make a reduction or come to a compromise on terms based on the criteria of businesses you have done together in the past. A good number of Realtors have adopted this system and have made a huge success.

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