I am a listing agent involved in a short sale transaction. The lender has requested that I reduce my commission. The selling broker will not agree to accept less than what was advertised in MRIS. I included a comment in the remarks section that the commission was subject to lender approval. What happens if the selling broker refuses to take a commission that is less than what the listing broker offered in MRIS? Also, is it true that Fannie Mae servicers cannot condition the approval and closing of short sales on the willingness of the listing firm to alter its fee arrangement with the borrower as long as the total commission does not exceed 6%? Does this mean the mortgage company has to pay the fee if it’s less then 6%?If the selling broker refuses to accept a reduced commission, the listing broker must decide whether to accept the lender’s request and have only the listing side of the commission reduced or decide not to accept the lender’s request. Once the offer is submitted to the seller, the listing broker no longer has the ability to unilaterally modify the commission. The cooperating broker could agree to accept the reduced commission but she/he is not obligated to do so. Also, there is no obligation on the part of a listing broker to reduce his or her commission in response to an offer from the bank or a demand from the bank to do so. Moreover, the MRIS rule with respect to compensation is that if there is any conflict with the unconditional offer of cooperation and compensation made in the compensation field(s), the information in the compensation field will control. The cooperating broker earns the offered commission upon procuring a buyer ready, willing and able to purchase the property on terms the seller finds acceptable. Additionally, Article 3, Standard of Practice 3-2 of the NAR Code of Ethics states that REALTORS® shall, with respect to offers of compensation to another REALTOR®, timely communicate any change in compensation for cooperative services to the other REALTOR® prior to the time that REALTOR® submits an offer to purchase/lease the property. It also says that after a REALTOR® has submitted an offer to purchase/lease property, the listing broker may not attempt to unilaterally modify the offered compensation with respect to that cooperative transaction. Standard of Practice 3-3 says that the listing broker and cooperating broker may agree to change the cooperative compensation. Our guidance under these circumstances is always for the brokers to attempt to negotiate a mutually acceptable arrangement. Absent that, we remind the REALTORS® involved that in order to act in the best interest of their clients, REALTORS® should not allow dispute over compensation to interfere with the settlement of the property. REALTORS® should allow settlement to proceed and then arbitrate any commission disputes at a later time. Regarding Fannie Mae loan servicers, they may not require real estate brokers to reduce their commissions as a condition to a short sale approval unless the commission exceeds 6%. According to Fannie Mae, the closing of a pre-foreclosure sale cannot be conditioned upon a reduction of the real estate commission to a level below what the listing agent and borrower negotiated. An exception applies if the total commission is more than 6 percent of the sales price. REALTORS® will have to ascertain whether the underlying loan in a short sale transaction is a Fannie Mae loan. They may ask the lender or loan servicer whether the loan is a Fannie Mae loan and consider submitting the Fannie Mae Announcement to the lender with the short sale package. For a copy of Fannie Mae's Announcement 09-03 (Servicing Guide, Part VII, section 504.02), go to https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0903.pdf . If an agent wants to find out if a mortgage loan is backed by Fannie Mae, the agent may call 1-800-7FANNIE (732-6643) from 8am to 8pm EST. For Freddie Mac info call 1-800-FREDDIE (373-3343).