Entry by Holly Hall Wilson

Hud Paper Trail - Rebate?


So I started today with a close. My sellers opted for a FAIRLY traditional model, but they did such an outstanding job on their part that it made my job easier and we've actually closed less than 2 months after listing. Since I'm my own Broker, I don't have to fill out any Disbursement Authorizations. My paperwork is usually a rebate from the traditional 3% and I back out the fees that I normally incur and we do a line item credit. Can someone help me with the way the handle the paper trail for the HUD? Do you provide the title company with a flat fee or do you "discount" ?


I'm not an expert on this stuff Holly but I would say this cries out "Flat Fee".

Holly, and everyone, please make sure to choose a subject when beginning a new entry. If information is to be searchable it is important that we keep our filing organized.



Holly Girl!

I agree with Mollie, flat fee, BUT as laws in each State vary with Federal laws, I would ask the title company their opinion as well.

In some states I can see that doing a flat fee may meet State requirements, but not broker requirements, but you could convert the flat fee to a %).

My legal rule of thumb is when in doubt, check Realtor.org, call an atty or ask your Broker, but because YOU are the broker, maybe check with another Broker friend as well, call the school where you got your BK license and ask them. It is always better to be safe than sorry imho. I go into over-kill when it comes to legal issues ;-)

Hope this helps!
Paula Bean
Orlando, FL

Hi Holly,
I'm not sure we answered the question. I for one don't quite understand what you want to do. Here is what I think your situation is:

1) The sellers agreed to some traditional level of commission (your listing agreement).
2) You excelled at getting the home sold in a relatively short period of time with outstanding cooperation and contribution from your sellers.
3) You want to reduce the fee coming to you because of the short period and the sellers stellar performance.

The question then is "how do I give some quantity of rebate to the sellers and how to reflect it on the HUD?"

If that is the question, then here is the way I have done it with the cooperation of the settlement company (or attorney as the case may be). This assumes the laws in Texas allows rebates as they do in Virginia.

Page two of the HUD shows the entire agreed upon fee and the distribution to the listing and the selling brokers.

An annotation is made in the broker disbursement area on page two that the listing agent is providing a rebate to the seller and the amount.

On page one of the HUD the rebate is shown as a credit to the seller.

The settlement company should just disburse an amount to you that represents the agreed upon fee minus the credit.

This way, the paper trail is complete. The HUD represents the exact amounts as stated in the listing agreement and the rebate amount is documented.

I agree with Paula ... explain what you want to do to the settlement company and let them give you the final advice. What is important is that the paper trail reflect the entirety of the transaction in case you are ever audited.

This has nothing to do with the type of fee. It's about the proper documentation of rebates.

I apologize if I completely misunderstood the question.

This page contains a single entry by Holly Hall Wilson published on February 19, 2008 8:52 PM.

Basic Question - How to Charge was the previous entry in this blog.

HELP Needed with Response to Email - Out of Town Buyer is the next entry in this blog.

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