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 Kristin Johnsen on
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Smitty,
Great post, I get paid only in the event of a successful short sale and the fee is never charged to the buyer. It isnt a buyers fee. I also work for the seller not the agent or the buyer. I would not be willing to pay the fee if I was a buyer purchasing a short sale. If the negotiations with the lender made me reduce my fee to make the deal happen than that is what I would do to get the deal closed.
Kristin
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Permalink Reply by Smitty on
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Kristin, the buyer pays the same total amount out of pocket either way for the house. NOT an ADDITIONAL negotiation fee on top of the total amount and I think that's why we've been successful, in addition to having complete disclosure from the get go. Charging the buyers is almost a norm for 3rd party negotiators where I'm from. I know that's hard for many to grasp, but the key with these transactions is disclosure, proper pricing, and open communication with all parties.
About 90% of the properties we negotiate are under contract within a month, so I know the fee isn't an issue. Those that aren't under contract are typically priced too high. We work VERY closely with the listing agent on competitive pricing.
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Permalink Reply by Kimberley Kelly on
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I am one of the "one-stop shopping Realtors" here in Palm Springs, California. I do it all, and it is the ONLY way I would do a Short Sale when I take the listing..into my 5th year in 2012. When I have a Buyer, I research the Listing Agent and if they are using a negotiation Company..I shy away. Not because of the $..but because it is infuriating for me to try to get information and have just one more obstacle to jump to actually get any!
I know there are good negotiation companies, but as with everything that catches on..there are more bad ones that are "specialists" because they see the potential money in handling Short Sales. They have no personal interest in the human beings attached to these often emotional situations. Seems every Agent is a "specialist" now..even those that have only closed 1 or 2 deals the entire year..and didn't even work those..they simply paid a fee to have someone else do it. How does that make you a specialist?? AAARRRGGHHHH!
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Permalink Reply by Richard on
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Kimberley,
I agree with you totally. Here in Tempe, AZ it seems that this pop up quite often in my property searches. And, I've been known to move on when I see it.
If I haven't said this before, I'll mention it now. I'm certainly impressed with your effort to "GET IT RIGHT" for the profession. I can imagine this being somewhat tough in the Palm Springs market where there are many high end homes. Anyway, it helps when someone like yourself can look at the transaction objectively and from many angles. This helps the profession in the long term.
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Permalink Reply by Ghana Bigsby on
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Questions.
Are you "shielding your buyers from seeing listings using 3rd party short sale negotiators? What about 3rd party transaction coordinators (one more obstacle to jump)?
Have you discussed your concerns and your opinions with your buyers? Who' is making the final viewing decisions?. You or the buyer?
An agent/brokerage doing their own short sale negotiation offers no guarantee of a smoother transaction. Nor does it mean you can micro-manage the agent/negotiator. It would be sad to find out the house that could be perfect for your buyer was missed due to biases.
I have used 3rd party attorney firm negotiators in the past to “assist me”. There was too much uncontrolled stressors for me. I no longer outsource my any part of my short sale negotiation. Better sucess, less stress (not more stress) and I can better handle obsticles that presents itself.
When I take on a buyer, it is to assist them in locating a house which can become a home they will love. I discuss and document the concers I may have and allow them to make final informed consumer decision.
Remember any listing on the MLS can be found on the multitudes of real estate for sale websites. I would not want to loose a buyer who is lead to "think" I was hiding from them available listings they might like. Their friend's or family are also searching the internet and knows an agent who will gladly show them.
Stay away from listings…”
….with uncooperative sellers.
If the listing agent is having difficulties with their seller, then beware the road ahead.…. where the listing agent does not have a shortsale package ready to submit to the banks within 72 hrs or less. What have they been doing? They should already have a prelim for you or have already ordered one for your review. All they should need is your agreed on contract and disclosures.
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Hi,
In my opinion, an agent should be prepared to allocate at least 5-10 hours a week to negotiate the short sale (multiple calls to the bank, document requests, review of documents to verify accuracy and adherence to lender requirements).
Again, in my opinion, an agent, should be far removed from the seller's hardship details and financials. Negotiating short sales hinders an agent’s time to show more properties and allows legal vulnerabilities.
Additionally as many have stated in their comments, it is not time or cost efficient and resources are required for short sales. It really depends on what type of hours your want to put in? 60-70 a week?
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Permalink Reply by Jeff Payne on
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Elizabeth, if anyone is spending 5-10 hours per week on ONE short sale, that person is the most inefficient person in the world. Where would all of this time come from? It should take maybe a few hours at most to gather the needed documents (most of that time is waiting for the docs to arrive) and should take no more than an hour to assemble the short sale package and from there it is a matter of follow up. If an agent is taking 5 to 10 hours per week on a short sale, I agree that it is not time or cost effective. Most likely if they take that much time on a short sale, they will also take forever to take a listing too.
One of the most often used "sales pitches" for our local title companies is that agents should be taking more listings instead of working short sales but that is one of the most often misleading or false statements. Agents need to learn how to be efficient with their business
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Permalink Reply by Nicole Stinson on
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I don't use third party Negotiators , I negotiate my own files. I think it is up to the listing agent to get the deal through and if thier not comfortable doing it and they chose to hire a 3rd party to do it for them , they should pay the fee out of their commission. Just as agents that use a TC you wouldn't charge a buyer or seller this fee because you chose not to handle your file .
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Nicole, I agree 100%
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Permalink Reply by Joseph Alfe on
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No, actually it should be up to the sellers, not the agent.
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Permalink Reply by John Treadwell on
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Well rumors have it that banks are going to stop all Neg. other than a licensed realtors to handle the short sales ,and that's the way it should be. I do all of my own ,and even take on some other agents files ,but no un-license people should not be doing any part of the deal. If you need someone else to do it for you then you should pay for it
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