I was wondering if any of you are using 3rd party negotiators for your listings?  What are your typical fees being paid.  Are you letting go of some percentage of your apples? Or is a buyer paying for some apples?

 

 

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I've seen 1-3% of the purchase price and also FLAT FEES.  I've seen them charged to the buyers and sellers agent and also to the buyer.

 

ALL parties should be made aware of how the 3rd party is paid BEFORE signing any contract.  IMO if you find out AFTER the fact, then you should be paying it.

I believe that the party that hires the third party should pay them if the third party can not get paid from the lender. 

 I agree with Jeff! The "selling agent" and/or buyer should not have to absorb a third party fee! I have actually seen addendums from the "Listing Agent's" third party.... that stated 'In the event that this fee "usually around $3,000? Sound familiar? If not collected from the lender or seller, the buyer agrees to pay!

I have also seen Listing Agents that have a third party negotiator fee to pay "count that as a reduction in commission to be split in the offer of compensation.

 

While we have made great progress with "lenders" no longer insisting on getting into the agents pocket for doing the job which truly is our job... producing a transaction (and then with so many other conditions, paperwork and plain old work) Dont touch my paycheck! However, there are some that want to take what appears to be an easier way out... but at someone elses expense!

I personally dont agree with third party negotiators/companies, and there are a ton out there. I get a least one e-mail a day promissing to "make you transactions" easier!  The sad part, I have seen transactions fall apart on most of these! The third party neglects to include certain assessments that are typical for an area,(usaully the listing agent doesnt even cover the market area)  they have not clue about, let alone read the sales contract, where it specifies that seller is to pay!  An FHA pre approval, (Cake), however third party didnt understand it! Then, the suprise addendum!  If you as the listing agent want assistance... then let the listing agent pay for the services!!! No different from paying a "personal assistant"!

Like everything else... if there is a situation where some can make money on other peoples problems... up pops tons of companies to take advantage of it! (Good, Bad and Ugly!)

 

 

I disagree.  I don't think sellers or agents should ever have to pay a 3rd party negotiator.  Most sellers are strapped enough, so let's add 1% of the sales price to them. Keep in mind if there is EXTRA money the sellers have, it will likely go to the lender.

Fannie mae specifically has guidelines that allow fees paid BY BUYERS to 3rd party negotiators because it has become such common practice now.  When you buy an REO property, the BUYER pays all of the fees involved.  So a short sale should be different? When a lender reviews a HUD, as long as total costs fall under the % guidelines set by the investor, they are approved, regardless of whether you think that the lender is getting less net. There are more and more 3rd party negotiators from lawyer’s offices, brokers, agents, title companies, and others with seemingly different experience.  Granted, not all are good, but then again, I've run into some pretty stupid agents attempting to negotiate short sales.  I know they all can't be bad because in my area they are doing a booming business.

I see NO problem charging a buyer a short sale negotiation fee so long as it is properly disclosed in the listing.  Let the buyer decide if the property is worth paying the fee or not. In June 86% of all single family and multi family properties with a $5000 negotiation fee were under contract in Massachusetts.  So the buyers don't seem to have a problem paying the fee. 

smitty I understand your position but still believe it is the responsibility of the person that hired the 3rd party. Should not be a problem because every third party negotiator that tries to get my business tell me that I will be able to make substantially more money because I won't be wasting all of my time on the phone :-) there is one in my area that charges the buyer but they struggle to get buyers to pay it which means they struggle to sell them. The 3rd party is hired for the benefit of the seller so the sellers side should pay.

Smitty said:

I disagree.  I don't think sellers or agents should ever have to pay a 3rd party negotiator.  Most sellers are strapped enough, so let's add 1% of the sales price to them. Keep in mind if there is EXTRA money the sellers have, it will likely go to the lender.

Fannie mae specifically has guidelines that allow fees paid BY BUYERS to 3rd party negotiators because it has become such common practice now.  When you buy an REO property, the BUYER pays all of the fees involved.  So a short sale should be different? When a lender reviews a HUD, as long as total costs fall under the % guidelines set by the investor, they are approved, regardless of whether you think that the lender is getting less net. There are more and more 3rd party negotiators from lawyer’s offices, brokers, agents, title companies, and others with seemingly different experience.  Granted, not all are good, but then again, I've run into some pretty stupid agents attempting to negotiate short sales.  I know they all can't be bad because in my area they are doing a booming business.

I see NO problem charging a buyer a short sale negotiation fee so long as it is properly disclosed in the listing.  Let the buyer decide if the property is worth paying the fee or not. In June 86% of all single family and multi family properties with a $5000 negotiation fee were under contract in Massachusetts.  So the buyers don't seem to have a problem paying the fee. 

Sellers are the only ones that should be hiring a 3rd party. (although we've been hired by the buyers) Most sellers don't have the excess income which is why charging the buyer works.  It works all around as most selling lenders aren't paying 3rd party fees. 

As a 3rd party negotiator, I've never struggled to get a buyer.  On the contrary, most of our properties are under contract in 30 days or less.  Any 3rd party that is struggling to get offers, is not working well with their listing agents.  Listing agents should NOT be overpricing property.  If the property is priced right, it will get an offer.

 

 

I am a Short Sale List Agent in Palm Springs, California and am running into just what Linda is saying..alot!  I list, work and close my own Short Sales, but when I present an offer on a Short Sale, I ALWAYS find out if the Agent is working it themselves, is experienced, is using a 3rd party and who they are.  The List Agent is the key to a successful closing and if they are farming out their work, you'd better be really SURE that that negotiation company can manage and close a short sale.  I appreciate it when the Buyer's Agent grills me and I do the same to other Short Sale List Agents.  A good tip off to me is when the Listing Agent has something in the comments like.."Please do not call List Agent.  Please call  ***** or fax inquiries to****"  Not interested.  Too much space between the property and the Closer...sorry for you Linda-

Thank you for the feed backs.

I offered the sellers agent to assist him with the short sale( I used to work for citi as a Asset manger in the short sale dept) but because of conflicts of interest and I do not have a real estate license, I was not able to do so.

 

I dont think the buyer or buyers agent should pay for a 3rd party fees. Especially if the sellers agent does not want to handle or do not have the knowledge to negotiate the short sale with the banks. I understand that the sellers probably do not have the money to pay for the fees, if an agent hires somebody else to do their work, it should come out of their commission not the buyers or buyers agent.

 

 

 

"The List Agent is the key to a successful closing and if they are farming out their work, you'd better be really SURE that that negotiation company can manage and close a short sale. "

Well said Kimberley!!!!! and to the point...

Let's not forget Linda's selling agent! They are an angel... to give up money to make it work for obviously a great buyer who appreciates thier agent's efforts!

I agree with this for sure. If a listing agent takes on a short sale and knows up front that they are not going to handle it or can not handle it, they should expect to pay for someone to do their job for them.  What is next, I am going to start charging buyers 1% or 1.5% of the sales price because I have an assistant who handles my transaction co ordinating and closing? Not much different in my opinion.

linda uribe said:

Thank you for the feed backs.

I offered the sellers agent to assist him with the short sale( I used to work for citi as a Asset manger in the short sale dept) but because of conflicts of interest and I do not have a real estate license, I was not able to do so.

 

I dont think the buyer or buyers agent should pay for a 3rd party fees. Especially if the sellers agent does not want to handle or do not have the knowledge to negotiate the short sale with the banks. I understand that the sellers probably do not have the money to pay for the fees, if an agent hires somebody else to do their work, it should come out of their commission not the buyers or buyers agent.

 

 


I dont think it has anything to do with that in my area, there is way too much to choose from, too many listings on the market as a short sale so the buyer doesnt have to pay anyone to negotiate for them.  The listing agent took the listing knowing that they could not or would not work the short sale, then in my opinion the listing agent should pay for the services that are benefiting the listing agent.  There is a reason that most lenders wont pay for third party negotiators anymore, what is that reason? 
Smitty said:

Sellers are the only ones that should be hiring a 3rd party. (although we've been hired by the buyers) Most sellers don't have the excess income which is why charging the buyer works.  It works all around as most selling lenders aren't paying 3rd party fees. 

As a 3rd party negotiator, I've never struggled to get a buyer.  On the contrary, most of our properties are under contract in 30 days or less.  Any 3rd party that is struggling to get offers, is not working well with their listing agents.  Listing agents should NOT be overpricing property.  If the property is priced right, it will get an offer.

 

 


BTW, just to be clear, I am NOT against 3rd party negotiators, I have never needed one or have not seen the need for one in the future, it is just a business decision to use one or not.  If I found the need for one, if I did more short sales, I would probably hire someone in house to work on my team as a negotiator or short sale specialist.  Probably the control freak in me to not want to take the chance of handing someones financial future off to someone outside of my reach.
Jeff Payne said:

I dont think it has anything to do with that in my area, there is way too much to choose from, too many listings on the market as a short sale so the buyer doesnt have to pay anyone to negotiate for them.  The listing agent took the listing knowing that they could not or would not work the short sale, then in my opinion the listing agent should pay for the services that are benefiting the listing agent.  There is a reason that most lenders wont pay for third party negotiators anymore, what is that reason? 
Smitty said:

Sellers are the only ones that should be hiring a 3rd party. (although we've been hired by the buyers) Most sellers don't have the excess income which is why charging the buyer works.  It works all around as most selling lenders aren't paying 3rd party fees. 

As a 3rd party negotiator, I've never struggled to get a buyer.  On the contrary, most of our properties are under contract in 30 days or less.  Any 3rd party that is struggling to get offers, is not working well with their listing agents.  Listing agents should NOT be overpricing property.  If the property is priced right, it will get an offer.

 

 

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