Negotiation shorts sale for other realtors, is anyone charging fees instead of the commission%?
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Permalink Reply by Jeff Payne on
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I just charge the commission but we do charge an admin fee on all of our buyer sides. There is a local attorney here who tries to charge 1.5% "clear title fee" but has trouble getting buyers to agree to it.
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Permalink Reply by Dwight Riley on
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Thanks Jeff, are you negotiating short sales for other realtors ? If so do you charge a flat fee or ask for a % of their commission?
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I only work on a referral basis with other realtors
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Permalink Reply by Bryant Tutas on
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I usually just co-broker the listing side and we split the listing side commission 50/50. The listing broker and I work together. They handle the property and I handle the short sale and the seller.
You could though very easily charge the buyer side a percentage or a fee. It's all in the presentation. Just simply state in the MLS that "Seller will contribute 3% towards Buyers closing costs. 1% of this goes to the 3rd party negotiator for handling the short sale." Then just add an addendum to the contract. This way you are giving the buyer something instead of taking away. Plus they know before they even look at the property that this will be required. Simple
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Permalink Reply by Smitty on
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There are a lot of Realtors (lawyers, 3rd party negotiators, title co's) in my area that charge the buyer a fee. It MUST be disclosed on the MLS clearly. 86% of all single and multi family listings in June with a fee to the buyer were under contract in Massachusetts.
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Smitty, that is a strong number. Buyers in our area have way too much to choose from and typically shy away from the buyer fee. We are working with a buyer right now who asked for a credit for the amount and we are closing this month. I think that our problem is that the usual suspects that charge the buyer fee here still think that the strength is in numbers and the easy ones rise to the top and the tough ones get ignored....
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When putting my investigating cap on, the properties under contract were all priced WELL. So, none of the listing agents seemed to overprice the properties. I also think New England hasn't been hit like the rest of the country...well, let me take that back. It's still a distressed market out here, and there are a glut of homes on the market, but I think compared to the rest of the country we may be a bit better off.
Let's face it Jeff, any home will sell at the right price. The trick is to find the balancing point acceptable to the buyer AND lender.
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I agree 100% Smitty, pricing is the key to get the offer. Our area is a pretty small area, only 250 sales occur each month in our county. everyone knows everyone and I think that the main player charging buyer fees has turned enough people away with their lack of a good success rate that the word has spread about them.
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That's key too. If you're planning on charging the buyer, you better be able to back up your success a bit.
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Permalink Reply by Richard on
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From a buyer standpoint, and if required I'd rather see Bryant's approach to recovering fees. It's upfront, simple and fair.
Bryant Tutas said,
"You could though very easily charge the buyer side a percentage or a fee. It's all in the presentation. Just simply state in the MLS that "Seller will contribute 3% towards Buyers closing costs. 1% of this goes to the 3rd party negotiator for handling the short sale." Then just add an addendum to the contract. This way you are giving the buyer something instead of taking away. Plus they know before they even look at the property that this will be required."
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Thanks Richard. Buyers are smarter than agents give then credit for. Agents assume buyers won't do this and buyer's won't do that. Usually it's the agent's fear or lack of knowledge that is the stumbling block...not the buyer.
This is especially true when it comes to having a buyer sign a buyer broker's agreement (BBA). Agents really struggle with using these when the reality is buyers WANT them. A BBA is beneficial to the agent and the buyer. I rarely speak with a buyer that doesn't get that. I'm all about full understanding and clarity when it comes to who we work for and how we get paid.
Richard said:From a buyer standpoint, and if required I'd rather see Bryant's approach to recovering fees. It's upfront, simple and fair.
Bryant Tutas said,
"You could though very easily charge the buyer side a percentage or a fee. It's all in the presentation. Just simply state in the MLS that "Seller will contribute 3% towards Buyers closing costs. 1% of this goes to the 3rd party negotiator for handling the short sale." Then just add an addendum to the contract. This way you are giving the buyer something instead of taking away. Plus they know before they even look at the property that this will be required."
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I like Bryant's approach too. The problem is some lenders won't allow a seller concession to a negotiator, for instance HUD does not allow processing fees.
Keep in mind no matter WHAT the buyer is paying the fee. I do think Bryant's presentation is better, but no matter what that fee whether it comes from the purchase price or not is truly coming from the buyer.
I think for me I'd rather do it in a way that any fee for services WILL get paid rather than trying with certain lenders that won't allow it and finding out after the fact.So HUD doesn't allow it but Fannie Mae has guidelines that do. Sometimes you don't know until you're already WELL into the negotiation.
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