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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Exactly, just like all the buyer paid fees on an REO.

Who pays for a service has no baring on who the service is being given to. Also it has nothing to do with fiduciary responsibilities. Any party can pay any costs involved in the transaction as long as it is by mutual agreement and is fully disclosed if required by RESPA.

Exactly! Disclose early, disclose often!

@ Karen Mathers - In my area (Seattle/Tacoma market) about 50% charge fees and that is not including the Bankruptcy cash fees that are being charged on top of the 1 - 1.5%  Those Bankruptcy fees are cash out to the 'Trustee' (what an oxymoron,) cannot be financed and are anywhere from $5,600 - $45,000 in the price ranges I typically work.  I don't touch those as I do feel that the Trustee is just 'capturing' a share of something they are not really entitled to and many homeowners are being forced into shortsale by the Trustee.  But that is another issue.

In regard to the title/escrow company negotiating these on your behalf and maybe they do or maybe they don't get paid - is just as unfair and predatory in my eyes.  Why should that burden be placed on my escrow/title team members and they not be compensated for their time and efforts?  They won't be in business long if that happens enough. Businesses need to earn a profit in order to exist.

I believe that as listing agents if we do the work of the negotiating, processing and facilitating of a shortsale, we should absolutely 100% be able to charge and receive a separate fee, especially if we are operating under our own LLC or S-Corp.    It is because of these unfair constraints on agents to be able to charge a fair and equitable fee for their time and services that many people are getting 'creative' on the HUD. 

I think we can all agree more dishonestly in the wake of all of the greed and dishonesty that has already taken place, is not going to help our industry one bit.


@karen - Again you are not qualified to tell a seller or buyer that a negotiation fee "discourages" the sale esp if you haven't been involved in a transaction where one was charged.  So I'm not sure you should be telling a seller anything.

I'm not sure what market you are in but most lenders want FMV for a property.  If your offer isn't within a FMV range, it likley won't be accepted.  Yes, short sales are good deals in comparison to their non distressed counterparts, but I don't see buyers getting HUGE steels.

Also your title company getting fees on the HUD is STILL a charge to the buyer.  It comes out of the proceeds of the sale, but it's still a charge the buyer ends up covering in their offer, so just because it's on the HUD and paid doesn't mean the buyer isn't paying for it.

Why shouldn't a "negotiator" no matter WHO they are, get paid for negotiating the deal? Do YOU work for free? As long as it is disclosed upfront and on the contract/and or HUD, and buyer agrees to it in writing, so there are no discrepancies...and the short sale is still a good deal, etc...to the buying side? Then what is the problem? No one works for free.....   the short sale negotiators ARE negotiating the short sale for all involved to be able to close a deal and sell the home....

The negotiators whether it be a realtor or independent negotiating co. don't get paid half as much as tons of attorney's trying to do this....

What's disgusting is that (at least in LA and Orange Cty areas of Ca) I know several attorney's that are doing this and getting paid MORE than the entire commission of 6% on these deals... really? As if THEY'RE doing ANY MORE work

than a realtor negotiating the sale? Why do u think these attorneys try to convince a seller to go with them instead of an agent??? 1 guy just got paid 7% on a 1 mil deal..because he's an attorney, yet they cut the realtor's commissions to 5%...

I think I just realized what license I'm studying for NEXT...


BRAVO Sheyenne...!!!! could not have stated it better.



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