I recently changed to a new Broker. Company claims, that if you use a certain Escrow Co., that they negotiate your SS for free. Bank get charged for that, and if the bank refuses to pay, it's OK. I know, that has been a lot of dicussion here, re-SS processors. My success rate is about 98%. SSS, I would like to hear your experiences. Thank you!
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Bryant,
Your correct I meant a contract signed upfront stating they will pay a fee in order to get there contract acceptedand move forward with the purchase. If they dont sign this then the contract will be recommended to be denied.
Don't forget though, that all decisions are that of the sellers. The agent can recommend, I can recommend, but the decision to accept or deny is always the sellers.
Good debate guys, there are going to arguments to both sides of this debate. Like Bryant said, keep it cool and dont resort to any personal attacks. Eric, Joseph and Smitty, all three of you are great contributors to this site and I appreciate your opinions and passion... Remember that we can all agree to disagree at times
Now Joseph I believe your getting a little touchy. No hard feeling. I said over and over I'm sure your well educated, versed and professional. I'm sure you know your stuff and just for the simple fact that me and you are debating real estate while many are eating lunch or watching TV is a testament to us staying current.
Please remember I just disagree with your with upfront fees in order to present an offer on a home and get it looked at by the seller. That's all.
Eric. I don't think Joseph ever stated anything about an upfront fee. His fees are paid at time of closing....just like ours. Now having said that I used to charge an upfront fee on listings. Whether they were short sales or not. I've been considering doing it again.
Ok guys. Lets keep the personal attacks out of the conversation.
Don't make me........
The beauty of our business is that there are MANY different ways to help folk and many ways to charge for our services. As long as negotiators are operating within the law then who are we to judge the way they handle their business? Shouldn't the consumer have choices? Isn't it ultimately up to them to decide who they want to hire and how they want to pay for those services?
I mean let's be real....MANY agents are harming their sellers by being completely clueless about short sales. So I say kudos to anyone that is actually helping.
Buyers just want to buy a house. If the value is there then they truly don't care about what fees that have to pay. But of course a lot of this depends on how the deal is presented to them. If they are poisoned right out of the gate then their options are going to be limited. Maybe it's best for us to fully understand how these alternative compensation models work so we can be in a better position to discuss the cons AND pros so they can make an informed decision.
Our jobs are to educate not to make decisions for our customer/clients. Don't you think?
Here's the revelation Smitty....I am a negotiatior. Have over a hundred and have done them for a while. When getting into negotiating for others I saw the business models out there and new the market was commoditized. Saw the various models and choose to find another way and get compensated on the back end by lender (There are ways).
I'm not stating that to say my way is right and your way is wrong. I just fundamentally believe it's not a required cost that should be put on top of the other costs because you had to be creative and get paid. Your trying to bundle in the 3% fee with the other costs when buying a distressed property.
Yes, I know it's the buyers choice but lets look at a scenario. Buyer saved for down payment. Worked hard, saved right, got a loan, saved reserves for 6 months of payments plus living expenses. Did the right thing and didnt want to go over a certain monthly or down payment. Got FHA, negotiated closing costs and got a home. Now in your model he would have been overextended and/or would have ahd to dip into his reserves to pay YOU because you negotiated the short. When an agent, who was experienced, professional and knowledgeable could have done the same if not better job.
Smitty to be correct short sales have been going on for decades. It was a strategy used by investors when finding a homeowner with little or no equity and they called it "Creating equity out of thin air) there were many who were successful and it was another way for them to get a deal done when novice investors saw no deal at all. The investors would do it themselves not call a negotiator. It has been around for a while it just happned to be an adopted skill by those that wanted to stay relevant as our market shifted.
I don't believe only Realtors can do processing. Again we have the same job partner and I believe anyone can do this niche successfully if dedicated, determined and dilligent about learning and getting better.
Eric, this is what I'm not understanding in your argument:
"Now in your model he would have been overextended and/or would have ahd to dip into his reserves to pay YOU "
No one is dipping into reserves. What does the buyer want to pay for the house? They want to pay a total of $130,000, now in both Joseph's and my model (and we both charge differently) the buyer can reduce the offer amount the price of the negotiation fee. So let's say the negotiation fee is $3000. Well, the P&S into the lender would be $127,000 and then the $3000 would be brought to closing. Realistically I would have the buyer even put in a lower offer if I had comps to support it and knew I could get a deficiency release AND let's say they put in an offer for $118,000 and I knew they would go up to the $130,000, and the lender says, "we want an additional $5000 to release deficiency," well, now I have a buyer who can give that additional $5000. I have NO problem allowing a buyer to lower an offer if the comps support it.
I haven't seen a reason why yet you are so against this. You don’t want your buyer to pay a negotiation fee, but would you allow them to pay a HOA fee? I’m sure your buyer’s would take a seller credit for closing costs right? What other fees in your state are the responsibility of the seller that you’ve seen that in a short sale situation become absorbed by the buyer.
Eric, bottom line – It’s a contract, and two people have to agree to it. If a buyer doesn’t WANT to pay particular costs associated with the purchase of a house, THEY DON’T HAVE TO, HOWEVER if the SELLER has made that a stipulation of the sale, then the buyers can pound sand. If the seller feels strongly enough that that is a condition of the sale, then that’s it. You can make a decision to not show those properties I guess. I don’t agree with that at all, but don’t you feel that those decisions should be up to the buyer and seller?
“I will state it again I bet if I was to sit down with your sellers and explain everything about a short sale and the potential for them to miss out on a buyer because you ahve attached a fee they would realize it's not a necessary service that needs to be added on. Plain and simple!!”
Eric,have you looked into buyer paid fees at all? How do you know the sellers will miss out? That is purely speculation…just your opinion. Have you looked in your state for all the short sale listings with a negotiation fee and done a percentage of how many are under contract?
But Joseph we all do. Why is that your argument?? It may sound good to a homeowner who listens and then signs your form but to professionals who are dedicated we provide that service when we choose to take a listing and work dilligently for our seller.
I will state it again I bet if I was to sit down with your sellers and explain everything about a short sale and the potential for them to miss out on a buyer because you ahve attached a fee they would realize it's not a necessary service that needs to be added on. Plain and simple!!
Im sure you love what you do and do it well but that's not the argument. The argument is if it's right, ethical and advantageous to our sellers who are facing foreclosure.
Okay so I mispoke. They can see it, fall in love with it, place an offer on it but ultimately not have a shot because it will be turned down per "Your Recommendation."
I guarantee you, Eric, you would be turned down flat by the majority of my sellers. Why? because I have a great track record. I take the time to thoughtfully educate the sellers and agent about the process. I care enough to make sure sellers have competent legal representation, and I make freely available references by sellers, agents, and attorneys who have worked with me. Plus I have a decade of experience as a lending executive and I probably know more about the entire short sale process from listing to closing than all but a few elite agents. Put my reputation and track record of close to 1,000 short sales closed since 2005 against some egocentric agent with a few? Please...
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