Good morning, NREB readers. This week's Premium brief is about a familiar request: give up part of your fee so the deal can close.

In this illustrative transaction, you represent the seller. The home is under contract at $400,000. The buyer is using a conventional loan with 10% down, and the lender will sell the loan to Fannie Mae. Then the appraisal comes in at $392,000.

The buyer's agent asks the seller to drop the price to $392,000. The seller refuses, then makes an offer of their own: "I'll come down to $396,000 if you take $4,000 off your commission." Everyone looks at you. Split the difference, save the deal, move on.

Before you answer, check two things the request skips: who actually needs money, and how much.

The buyer was approved for a loan at 90% of the property's value, and for a purchase, the lender measures value as the lower of the price or the appraisal. So while the price remains at or above $392,000 and the approved loan-to-value remains 90%, the loan is capped at 90% of $392,000: $352,800.

The buyer planned to put $40,000 down on $400,000. With the loan capped at $352,800, a $400,000 price now takes $47,200 down. That is $7,200 more than planned, not $8,000, because 10% of the gap was already in their plan. The buyer has $2,000 beyond the down payment and closing costs they budgeted. So the shortfall is $5,200.

That number is the obstacle. Not the $8,000 appraisal gap, and not the $4,000 the seller asked you for.

A reduction in your listing fee does not go to the buyer. It lowers what the seller pays, and it helps the buyer only if the seller passes it on, through a lower price or an eligible credit toward the buyer's closing costs.

Run the seller's proposal. At $396,000, the buyer needs $43,200 down. They are still $1,200 short. Your $4,000 does not close the deal as structured.

The seller's side looks different than it sounds, too. With an illustrative 2.5% listing fee, the seller's proceeds after that fee are $390,000 at $400,000, with other seller costs unchanged. At $396,000 with your fee cut by $4,000, the seller nets about $390,100: slightly more than before. Under these assumptions, the price reduction costs the seller nothing. You would be funding all of it, and the buyer still could not close.

One more distinction matters before anyone signs anything. A fee reduction, a credit from you to the buyer, and paying one of the buyer's expenses are three different things. They help different parties, and lenders treat them differently. On this loan, Fannie Mae counts money a real estate agent puts toward the buyer's costs as an interested-party contribution, with limits, disclosure requirements, and a prohibition on using it for the down payment. And the listing agreement is typically with your brokerage, so the fee is not yours alone to change.

So the question is not whether $4,000 is a reasonable sacrifice. It is whether to contribute what was asked, offer a smaller or differently structured contribution, or decline because the payment does not resolve the problem and another route might.

That is what NREB Premium is for. Every Saturday, Premium works through one transaction problem with real arithmetic and language you can use. If you’re already a member, great! What comes below the break is already unlocked for you. For those who have not yet joined, below the break: the requested contribution against the actual need; where each dollar goes and whose position it improves; your earnings before and after, depending on who absorbs the cut; the alternatives that close this gap without your fee, and what each costs; when contributing is reasonable, and how much; the conversations with your broker, your seller, and the buyer's agent; and a worksheet for the next time someone asks….