How does the Negotiator Get Paid?
I know this questions is very general, but I would like to see opinions and discussions. I have been partnering with another person for several years. He's great at the negotiating, I'm great at the Real Estate side. Lately the lien holders have completely taken the negotiating fees out of the HUD, although leaving the Commissions at 6%. The negotiators, from several different approaches, seem to want at least 1%. I don't mind pay this out of my commission, but I do mind seeing that the distressed homeowner is walking away with more incentives than I am commission. I see where a lot of short sales are asking for Buyers to pay the 1%, but I also see a lot off feedback from Buyers agents that this is ridiculous. Opinions? If a distressed homeowner is receiving $3000 from HAFA, how can I legally ask that they pay their own negotiating fees?
Replies to This Discussion
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Permalink Reply by Donna McClelland on
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Well said.
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Jeff - OMG! I don't want to get into a pissing match with you, but PLEASE, have you never had a buyer fall out? Or two, or three? Have you never had to negotiate back and forth between parties? Have you never had to resubmit packages because the lender lost it? Have you never had to request documents from your agents and/or homeowners multiple times? Excuse me, but I do not get paid nearly enough for the time I put in and I am a top negotiator and extremely organized. And if you just think I am only a third party negotiator, you are mistaken. I am a licensed real estate broker and have been doing real estate for 9 years. I have done my own negotiations on my own short sale listings and even I would not do them myself anymore. But you are entitled to your opinion.
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Permalink Reply by Jeff Payne on
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Not getting any pissing match, I just think that anyone who is spending hours on the phone for a short sale does not know what they are doing or are just very inefficient in my opinion. If you do not get paid enough then why are you doing it? just a question
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I do it because I love the challenge and I love being the hero when the transaction is successful (I've only had one sale not approved in my career). It feels so good to help the homeowners, especially when they are in severe distress. I guess I'm not in it for the money.
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Donna, I knew that answer when I asked the question. I have great respect for you and anyone who has a servants heart
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Permalink Reply by Smitty on
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Jeff, some agents ARE too busy to deal with short sales. I know you don't like the "pitch" but I get testimonials from agents when we complete a sale for them. I just completed another sale for an agent ranked #1 in the country for a particular brokerage that I've worked on 8 sales with. His testimonial in regarding hiring us as a 3rd party negotiator reads:
"Allows me time to actually sell real estate and not be a secretary for the banks."
I realize hiring a 3rd party is not for everyone, but some negotiators are well worth it to outsource. I like what Harry wrote about his approach to short sales. He does quality vs quantity and I think that really depends on your preference. Some agents want the amount of sales, and some want the quality of sales. It's a true statement and those who likely do quantity, outsource.
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Smitty, we can agree to disagree. A secretary to the banks? really? I do a fair quantity and feel that I understand them enough to know that short sales do NOT take the amount of time that many people try to make you believe. If it does take them countless hours, they need to educate themselves and build a system. Working a short sale is a system and the system that we use is designed to take much less time. I totally disagree that those who do quantity outsource, if you think that is true you should call Fred Weaver, Kevin Kauffman, Brian Gubernick . Kayte Gentry, Knolly Williams and Trent Chapman, some of the very top short sale agents in the entire country, just to name a few.
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Permalink Reply by Nick Curcio on
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Yes if you don't have 50 - 75 listings at any given time. You see by trying to do it on your own you are wasting time that you can be prospecting. I understand that there are A LOT of idiots out there calling themselves negotiators but I pride myself on closing 90% of the short sales we start out with. All of you 3rd party negotiator haters need to understand that all 3rd party negotiators are not bad.
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Permalink Reply by Kevin - Greenville, SC on
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The advance fee ban is no longer in effect for Real Estate Agents in good standing. I personally however do not charge one.
Until further notice, the Commission will forbear from taking any enforcement action for
violation of the MARS Rule with the exception of the Rule’s prohibition against
misrepresentations in Section 322.3(b)http://www.ftc.gov/os/2011/07/110714marsrealestatepolicy.pdf
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This has been discussed a LOT on this site. Please search old threads
http://shortsalesuperstars.com/forum/topics/typical-fees-for-3rd-pa...
I charge the buyers. I've never had a problem getting paid. Fannie Mae has particular guidelines on how to treat this fee as a seller credit, but you are right there are those investors and servicers who have started putting the clamp down. It depends on the lenders involved. If you charge the buyer it MUST be disclosed up front. We actually put it right into the listing. It's up to the buyers if they want to see the house or not.
The buyer pays the same amount either way. If a house costs $300,000 then in the example above on seller concessions, the negotiation fee of $3000 would be reduced from the NET, so the amount to the lender is $297,000. If you charge a buyer cash at closing they can reduce their offer the same amount. So the offer to the lender is $297,000 and they pay the negotiator at closing on the HUD the $3000 fee. Either way, the buyer pays the same for the house and the lender NETS the same. I find it the safest way to get paid.
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Smitty,
How do your client's feel about this? What if the Bank would take a net of $300,000 for instance to approve the Short Sale, but would decline at net of $297,000?
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Kevin, I have never not gotten paid nor have I ever had an issue getting paid. The key is disclosing the fee RIGHT UP FRONT in the listing before anyone steps foot in the house.
As far as your hypothetical question (and it has never happened) we would eat the fee. My reputation is what drives my business and keeps getting us referrals. BUYERS AGENTS refer new business to me. To me, that is a HUGE compliment. It means I've done my job. However, I don't work for agents. I work for sellers.
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