Hi Guys,

Our team has been working on some strategic planning and we were surprised to find a lot of the short sale listings in our area that demanded that the buyer would be responsible for a short sale negotiation fee , attorney fee for the seller's attorney, or some portion thereof.

We would be interested in hearing your thoughts on this model. 

Does it discourage offers?

Thanks in advance.


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AMEN Joseph. I'll even go a step further and tell the agents I work with to put in the MLS listing that lender approved discounts are available on almost all of their short sales.  Very often I can negotiate for the lender to pay certain closing costs for the buyer even in ADDITION to allowing a seller credit. In fact - I just got an approval on a 790K original max offer down to 745K plus got almost all closing costs covered.  Even after my fee the buyer has saved over 22K. Full release for the seller.They are thrilled and have already referred both the agent and our company to several of their friends, all looking for home in that price range. 

I believe in being creative and getting win-win-win deals for everyone.  

Hi Bryant/Marti.  It sounds like the AZ and WA markets are very similar in terms of regulations.  I also weed out tire kickers for my shortsales by contingencies of earnest money deposits made to escrow at time of mutual acceptance between buyer and homeowner/seller as well as inspection within 7-10 days.  I have had some agents get upset about this and I do understand where they are coming from.  One of my shortsales are probably not going to be a good fit for them. 

As Bryant said, my duty is to the client I signed up to represent.  It is already a stressful situation to lose your home.  I  am not going to muddy an already difficult and challenging process with accepting a contract only to have them 'change their minds' due to inspection or they found a prettier, shinier house down the street and now my seller is at square one with an even tighter timeline. Tight contracts to protect your client that are fair and reasonable are always a good thing.  Establishing a business model that you know works, will protect all parties and allow you to continue in 'business' and not in rescissions, is also good for everyone.

When I am on the buyer's side, I follow the same wisdom that Marti does.  If it is an agent with a good reputation for closing - no problem.  If it is not, we pass until we find one that does work.  


I find it a little humorous that even with all of the great strides we have made with publicizing more property information and setting up automatic search & valuation sites, etc. so that clients can find their own properties, those computerized programs still cannot determine what is a 'sellable' listing and what is just a listing!  

One thing I am absolutely sure of is that anyone who is a real estate broker in today's market is earning every red cent of their commission and more.

Thanks, Bryant.

Buyer commitment is such a huge part of success in short sales.  Buyer and their agents don't balk at paying for the inspection pre-approval?


No, it helps move the file through the system more streamlined, but that’s if they know what they are doing. Most 3rd party companies are slow and over worked, but some are amazing but only get jobs through word of mouth, because they are that great and ensure the short sale is approved in 45 days.

Our law firm handles the short sale negotiations and charges an attorney fee at closing which we try to get the Lender to pay but, it the Lender does not pay then we charge the Buyer.  If you disclose this in the MLS it should not be an issue.  We have the Buyer sign a contract addendum along with the sales contract so it is not surprise.

We are located in Broward County Florida and traditionally, the Buyer pays for title insurance in this county, so in the case of a short sale, the Lender will pay for the Buyer's owners policy, and depending on the sales price this amount can easily be greater than the fee.

Inventory is also so low that Buyer's want these properties and are willing to pay the fee.  If one Buyer has an issue there are usually 10 more anxious to have their offers submitted.

As we all know negotiating short sales is a long process and sometimes you get what you pay for.  If I were a Buyer;s Agent, I would tell my client it;s better to have a competent Attorney working on the short sale then someone who has no clue what they are doing negotiating for free!!!!

Wendy Rosenberg

Vice President Title Express, LLC

Some excellent discussion on this!  I agree that in some cases, when it is beneficial to all parties, it's doable.  In AZ, only Realtors and Attorneys can negotiate short sales, as mentioned by one of my colleagues previously.  Also, what I would love for all of us, the 1%, to do for the rest of the 99% out there is to educate.  On a larger, $500K home, I see where this can certainly make sense, as outlined in this discussion.  But, that isn't where I'm seeing it here in Phoenix.  If you are taking a lower-priced listing in a primarily FHA buyer geography, this may not work for the buyer or the seller.  I guess the lesson here is:  know the specific area of your market, know what you're doing so you can monitor the process, and do what's best for your seller, which is to get the deal done.  One of the key key key components in that is to attract as many qualified, educated buyers as possible. Interview the agent(s) on both sides.  Make sure they are committed (on both sides) to getting the deal done.  

So, to Chris' question regarding strategic planning, set out a plan that will do the right thing by the seller/buyer - whomever you represent.  If its an area of the market that will support it, such as buyers are falling out consistently, maybe it's the right thing to do for the seller.  Just don't limit your buyer pool by placing restrictions that are not achievable.  And disclosure is KEY!  I come across a lot of listings where the fee isn't disclosed in the MLS and I don't find out about them until the agent interview.  At that point, the interview is over ...  That's not cool, but it's also not legal in AZ where we are governed by State Statute and some of these actions are actually crimes ...  EEK!  Best to all!  And be careful out there ... :)

I personally negotiate my own short sales, so as a listing agent this is a non-issue.

But I do see listings in my area where it is disclosed on the MLS that the buyer is to pay the Negotiator fee of $xx. I personally advise my buyers against considering these properties. Why should the buyer pay for the seller to complete his short sale?

In my opinion the listing agent should allocate the commission split so that it is paid on the listing side from the commission.

But..yes, if you are advertising a listing as such..you are limiting the interest of buyers.

Hello superstars!! ;)

We are a 3rd party (Debt Management Service Provider) DMSP. Licensed and bonded in the state of Oregon.

Specializing in debt settlement liens and short sales. Our fee is paid by the buyer at closing through Escrow.

Fee is disclosed on the HUD 1 settlement (buyer side). Buyer fee agreement is uploaded in RMLS and negotiations company is disclosed in agent private remarks, buyer agents are aware that there is a 3rd party negotiations fee on the active short sale listing.

This is becoming more customary in our market today. Also, I can agree with Smitty....that is does not discourage offers.

We close 99% of our short sales successfully.

Educating buyers and agents is the Key! 


Facebook- Royalty Negotiations / Linked In

The question Chris asked was "does it discourage offers".

I am seeing a lot of people respond by telling how they can do it and it works. I believe it does work most of the time.  The question was "does it discourage offers" and it does.

I just have a hard time selling something that I do not believe in.  If my son were buying a house, could I tell him to buy a short sale that is way below market value, pay hundreds of dollars for inspections without knowing if the seller can deliver at that price and then tell him he needs to pay 1% for the seller's negotiator?  My answer would be "No".  I would certainly tell him why and let him make his own decision but my presentation is not going to be so rosy.

I have a local title company that has well over 100 short sales in progress all the time.  They give me weekly updates and have done a fantastic job with all the short sales I have sent them.  I guess my question would be why do I need to work with someone that needs to charge the buyer 1% of the purchase price?  What are they doing differently that justifies this?

Don't tell me they get them done faster as anyone that has been doing short sales for a while knows how to put a good short sale package together and follow up regularly. 

I just don't get it?



Karen, I totally agree.  The best way to pay for the 1% fee is to only give 2.5% to the buyers agent and the listing agent only take 2.5%.  There's the 1%.  If the listing agent wants the buyer to pay for the 1%, then it only means that they are greedy.  They can say all day long that the lender "may" cut their commission.  That's hogwash.  The lenders are willing to pay 6% in 99% of cases.  If they don't want to pay the 6%, then the negotiator needs to negotiate and not just push paper.  My short sales go to a 3rd party and although the extra 1/2% would be nice, I don't think its fair.  All the risk is on the buyer's side.  Everyone needs to win.  Having the 3rd party negotiator allows me to concentrate on what I do best and that's get listings.  Some listing agents just can't stand being fair.  They are even offering 2.5% to the buyers agent on traditional sales.  They take 3.5% and give 2.5%.  I personally keep a log of agents that are doing this type of thing.  I check it to see if I'm dealing with a money-grubbing kind of agent.  If I am, then I don't trust them as far as I can throw them.  Bad reputations are hard to get rid of.

@Mike Rizzo: I totally disagree.  I don't remember ever agreeing to a pay cut down to 2.5% especially when every single business operations fee I have has risen anywhere from 10-30% in the last 3 years!  Of course, I do the work of a 3 percenter, so I feel no shame or greed in being compensated what I have rightly earned.

In a shortsale the risk is more with the Seller more than the Buyer, in my opinion.  If the Buyer decides to back out and go buy something else, they have that option.  My Seller is losing their home, they do not have an option of messing around with a flakey, scavenger of a buyer trying to pick their bones for the lowest offer they can get away with and then backing out.  This could result in a Foreclosure for my Seller rather than an organized and strategized shortsale.  The Buyer still gets to buy a house no matter what happens with my Seller.

I like to 'get' listings as well, but I also fully service them so I disagree with the perception that I should somehow lower my standards and income to meet someone else's who does not want to put the time, care and professionalism into the transaction that I will. 

If you are in the Seattle area, you can add me to your personal log as I absolutely take 3.5% and offer 2.5%.  I also negotiate the shortsale and have negotiated my own paycheck up front. 

When I represent the Buyer, especially in a shortsale, I completely have no problem taking 2.5% or I have a Buyer's Agreement for 3% in place and they make up the difference. 

I don't think this is the Wild West, I think we all need to be a little more assertive in keeping our standards high so that we can offer a superior level of service and be viewed as the professionals that I believe our industry should reflect.

You are spot-on Megan,,,!



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