Could you post the state law that states this? I'd like to check with the board owners, and moderator on this.
David, interesting. Who does the actual negotiations, the listing agent or a title co./atty?
David, would you post back the law please?
This Florida Statute (FS) 501.1377 also check FS Chap. 494 and Chap. 120.
This is the Florida Statute (FS) 501.1377 also check FS Chap. 494 and Chap. 120. I agree that doing any kind of "work around" is no my cup of tea and we don't. We simple charge a total of 8% on all our short sales some paid by the buyer and some paid by the seller. Any discussion of "negotiator fees" or this is for the negotiator, etc., etc, is off limits in our office and has no place here. Every Realtor has a bottom line they will work for in the free market place. Mine on Short sales of Residential properties is 8%. I command higher for commercial properties. Your thoughts?
Letter from the Attorney General from the State of Florida. See attachment.
Here is my "Devil's Advocate" if you will...
My concern would be that the extra 2% would either be extra earned commission for negotiating/handling the short sale thus in violation of FS 501.1377, or it would simply be an unearned fee/commission charged to a buyer, thus in violation of RESPA.
I would think that in order to (with a straight face) say that it is both an earned fee, but not earned due to short sale activity, you would need to charge 8% commission on all your listings by requiring the buyer pay the extra 2% as you state...if that were the case, then your short sale commissions would be the same as your non short sale commissions so the fee structure would not imply extra fee for short sale activities, it would simply be your firms normal commission structure.
Those are just my thoughts based on my understanding for what it is worth, which should not be confused with a legal opinion because it is not.
Good luck to you and I think in these areas, the most important thing is to under promise and over deliver so all your parties (buyers and sellers) on short sales are satisfied with your results. That along with making sure they get sound legal advice regarding the deficiency and tax issues (up front and through the process) and you have satisfied clients that had their problems solved. I don't believe the attorney generals have any desire to apply vague and conflicting statutes on a witch hunt unless someone has been harming the public intentionally or unintentionally.
Oaky, I'll chime in. I've read FS 501.212 before, and I don't believe it says what everyone keeps attributing to it, specifically that only attorneys and mtg brokers can charge a fee.
FS 501.212 deals with a "Foreclosure Rescue Consultant" and a "Foreclosure Rescue Transaction"
A "Foreclosure Rescue Transaction" (Definitions(2) (d) (1) ) "By which residential real property is conveyed to an equity purchaser and the homeowner maintains a legal or equitable interest in the residential property conveyed...".
This does not apply to a short sale.
A "Foreclosure Rescue Consultant"(Definitions (2) (b) "Means a person....foreclosure rescue services. The term does not apply to:
1. A person excluded under s. 501.202"
6. Licensed mtg broker
7. An attorney
s. 501.202 (6) Includes any licensed real estate agent under FS 475
So, first of all a short sale is not a "foreclosure rescue transaction"
Secondly, real estate agents are specifically excluded from application of the statute.
IMO, not an attorney, this ain't no legal advice.
Sorry guys, my retarded brain-to-typing-fingers connection went awry.
The reference above to "FS 501.212" is actually from FS501.1377.
The reference to FS501.202 within the body os FS 501.1377 is correct though.
Dave, this was written in 2008. Is there anything that is sooner?
This does not address, negotiation fees charged to the buyer. It does not address loan originator or attorney. It definitely address "UP FRONT" fees which the FTC has already addressed. I don't see where a negotiator cannot charge a fee for negotiation a transaction to be paid at closing.
I agree with giving the best service for a job well done. Regarding all the questions about negotiator fees.....the OFR in the State of Florida has been out there in real estate broker's office's for whom they are charging negotiation fees since they classify a short sale as a loan modification. They have been auditing and bringing charges against licensed Real estate brokers. Unfortunately this is a true fact and I bring this to your attention first hand. That is probably all I can say on a public blog. That is why I brought the attorney general letter that was sent to our licensing agency.