This is a contunuation of my broker's post Aug 22. I represent the buyers. We are 2 days from closing and 3rd party negotiator presented the following on their company letter head trying to get paid. They never disclosed how they were getting paid during our negotications nor was it noted in the MLS.
(“S & S”) in cooperation with Christian, will negotiate the short sale for the above referenced property. As part of its services S & S will:
-Negotiate the short sale with all note holders.
-Negotiate with Associations as may be needed.
-Coordinate document gathering.
-Coordinate efforts with sellers, buyers, realtors, attorneys and mortgage representatives.
-Work on extensions if needed and desired by all parties.
-Keep all parties informed of the process throughout and/or be available for updates as
needed.
As compensation for its services, S & S, Inc. will charge the releasing note holder a fee of up to Three Percent (3%) of the sales price (“Negotiation Compensation”). S & S, Inc.’s negotiation compensation will be collected from the releasing note holder at the time of closing and not from the parties to the transaction or their agents. The parties acknowledge and agree that S & S’s compensation may appear on the buyer's side of the settlement statement, the seller's side of the settlement statement, or both. If any part of the negotiation charge is contained on the seller’s side of the settlement statement, the seller understands and agrees that the charge was negotiated with the note holder specifically for short sale negotiation purposes, and the seller would not otherwise be entitled to receive those funds as part of the closing or outside of closing. If any part of the negotiation charge is contained on the buyer’s side of the settlement statement, a credit will be given in an amount greater than or equal to the amount being charged. The resulting net charge to the buyer will be $0.00. The buyer understands and agrees that the charge was negotiated with the note holder specifically for short sale negotiation purposes, and the buyer would not otherwise be entitled to receive those funds as part of the closing or outside of closing.
Seller:___________________________ Buyer:_________________________________
Seller:___________________________ Buyer:_________________________________
Listing Agent:_____________________ Selling Agent:___________________________
The buyer's do not want to sign it. Can the negoticator hold up closing? Need help. BTW the buyers are financing.
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Here is another example, in my opinion, of why a 3rd party negotiator is USELESS and PROBLEMATIC! Just because the real estate agent is too lazy to deal with the bank, now the agent and buyers, unfortunately,are going to pay for it, I would ignore the 3rd party negotiator. I wouldn't pay them a single dime- Instead I would recommend that our 3PN "look for a new occupation"....LOL. I wouldn't have my buyers' sign anything.
Now whats going to happen is that the 3PN is going to be really mad. Eliminate their bank authorization IMMEDIATELY so they cannot contact any of the lenders involved. I would also follow up with a legal letter stating that if they contact anyone involved in the transaction or mingle in any way, there will be legal action commenced against them. If they try and attempt to cause you problems, I would contact your states real estate board and any other neccessary agency and report this guy and his company. Third Party Company's aren't too popular when it comes to state governments and their laws when it comes to protecting the consumer from certain "unscrupulous" situations.
Roger C. Fountain
Plano, Texas (Dallas area)
That's a bold statment, Roger
My first reaction is I wouldn't sign it!
However! Not paying could cost you the house!
When was your agent aware there was a third party negotiator?
I say there is at least one real estate license at risk and possibly four.
Once you sign it you've agreed to it.
Bill
Here is there short sale package along with the contract addenda they use, I dont see anything about buyer paying for their services.
http://debtfreeflorida.com/resources/S-S_Set_Up_Package.pdf
Jeff, good research. This is typical of many of the 3rd party firms here. They will usually try to get seller concessions to the buyer, and take their fee from there. This should be accomplished by: 1) Addendum to contract specifying the consessions, and an agreement from buyer allowing the fee to come out of the consessions. This can cause issues with the buyer's lender. 2) When they can't get this done, at the last minute they will try to hold the deal hostage and try to demand payment from the buyer/real estate agents. NOT the way to do business. There are of course, 3rd party firms that disclose everything up front, with signed fee agreements.
this is the business at the same address
http://debtfreeflorida.com/
BTW, I could not find an S &S Inc on sunbiz.org that is an active Florida corp.
Jeff didnt find it either, at not least active. So it would be hard to tell if any officer/owner etc, has the proper
license to do short sales. Now maybe Karen needs to look up the title company on Subbiz too! See if they have an attorney on board!
Frankly, when are buyers agents gonna "qualify the listing agent and short sale, before exposing the buyer to these types of issues! The seller, buyer, and buyer agent can get hurt.
I believe there are certain standards title companies must follow, and if it is not any attorrney/title, hopefully they are processing like they should be "per the contract" "per the approval letter" Interesting, how and at what point do these "third party negotiators" come into play?
I hope this situation works out for both the Buyer and Seller! This is most important!
We closed today. They took the 3% on seller line 507 on the HUD as closing concession goin to their company. Not sure how that got past Chase review of final HUD since there was no credit to the buyer. Hummmm.
I did not use the real name of the company in the 1st post.
Karen, by the way 3% is a Stiff fee. What was the sales price/fee?
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