Up Front Fees

Can any share with me the documentation they are using for upfront fees for short sale transactions? Fee range?

I appreciate your help,

 

Kimberly Sherrod

www.RealEstateGroup316.com

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Replies to This Discussion

Permalink Reply by Jeff Payne on July 15, 2011 at 9:41am
Can we charge an upfront fee? 
Permalink Reply by Beverly Cibulsky on July 15, 2011 at 10:03am
Wouldnt Charge an upfront fee, if my life, my licsense (feeding my family!)  depended on it
Permalink Reply by Jeff Payne on July 15, 2011 at 10:06am
I agree Beverly.   I have never and would never think of charging an upfront fee.  I take the listing, sell it and get my commission and get a very happy seller, in return I get referrals which is much more than any upfront fee.  You are a wise lady Beverly, glad that you are a member of this site!

Beverly Cibulsky said:
Wouldnt Charge an upfront fee, if my life, my licsense (feeding my family!)  depended on it
Permalink Reply by Beverly Cibulsky on July 15, 2011 at 10:35am
I am not sure if any legal entity can charge an up front fee on a short sale? (and not without tons of disclosures!)
Permalink Reply by Beverly Cibulsky on July 15, 2011 at 12:25pm

Thanks Harry,

I Believe true here in Florida,as well!  I think this may be a "national" ruling as well!

Kimberly, Please consult your broker for advise on this, as this is only our opinion and comments. We are only exchanging our opinions to  share and help out our fellow real estate agents, not to provide legal advise! Your Broker is the person responible for giving you direction!

Permalink Reply by Bryant Tutas on July 17, 2011 at 12:37am
In Florida there is nothing stopping us form charging an upfront fee. The FTC MARs prohibited it but not anymore. The only other obstacle is the SAFE Act. This just requires a proper disclosure.
Permalink Reply by Eric Mieles on July 17, 2011 at 1:02am

I think maybe we should ask Kimberly why she's considering charging an upfront fee? Are you just looking to make more money? Do you feel that the work you perform should be compensated this way? Have you considered the potential recourse of having sellers go to another agent when they do a little research and find out they can do it for $0??

I'm curious to her your thoughts.

Permalink Reply by Stephen B. McWilliam on July 17, 2011 at 1:14am
That headline used is totally wrong.  Advance fees are unlawful - period.  The FTC/MARS only involved a disclosure requirement.  FL s.494 and the Federal SAFE Act are the laws that prohibit charging any advance fee.  Furthermore, both laws further prohibit any fees being collected relating specifically to the short sale processing itself unless licensed under FL s.494 as a mortgage loan originator (f/k/a mortgage broker).
Permalink Reply by Liane Jamason on July 17, 2011 at 1:17am
Beyond the issue of legality, it seems ethically and morally wrong to me to charge an upfront fee to a Seller who's in a distress situation!  We are hear to help and will make money in the end, why do you want to charge an upfront fee?!
Permalink Reply by Bryant Tutas on July 17, 2011 at 2:06am

Stephen. I disagree. The FTC specifically states that agents are exempt from the ban on upfront fees.

 

The SAFE act and Chap 454 govern mortgage professionals not real estate licensees.

 

And this is a NATIONAL forum. So my headline is spot on.

 


Permalink Reply by Jimmy Williams on July 17, 2011 at 2:09am

Liane,

I agree wholeheartedly with you.  The one issue that I have with short sale transactions is where the listing broker is charging a transaction fee, (which most short selling banks won"t allow), so in order to collect the transaction fee, data storage fee or whatever bogus name it is called, is deducted from the selling agents commission.

Permalink Reply by Bryant Tutas on July 17, 2011 at 2:12am

Liane. Not all short sales are distressed sales. When I first approached a seller a few years ago and mentioned that I was thinking about charging an upfront fee for handling short sales she was excited about it!! She hired me because of it. She said that she was listed with an agent before who was helping her with her short sale and she felt bad every time she called for an update because she felt her agent was working for free. The fact that she paid me $250 upfront gave her a feeling of being more in control of her situation. She no longer felt like a charity case. And after that I charged upfront fees until the MARs ruling came out. Not once did I have a seller complain about it.

We sometimes have a habit of projecting our thoughts onto others.

When they may not think what we think at all.
Liane Jamason said:

Beyond the issue of legality, it seems ethically and morally wrong to me to charge an upfront fee to a Seller who's in a distress situation!  We are hear to help and will make money in the end, why do you want to charge an upfront fee?!

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