Travis Davies July 8, 2011 at 3:34am

Here in UT you can find attorneys to do it for as low as $700 per file, but most good third party negotiators (mainly attorneys) charge 1%. You can either offer 2.5% as BAC or pay the fee out of your own pocket. It all depends on the file you have and most importantly who you have negotiating it, if its not you.

Personally I take most of the files, especially HAFA ones.

I am finding that in several of my files, particularly non GEC investors refuse to pay for 3rd parties no matter how high you go up the ladder. That being said i've only had the energy and patience to try it on a few files. I have better luck have my licensed TC do 99% of the calling. She does it for $800 for one lien and $1200 for two or more. I of course being a control freak end up doing half of it anyway just to make sure its done right.

If you want to get a third party involved make sure they have some good software that lets everyone be informed. Trent Chapman at Short Sale Genius has probably the best I've seen and works well if you carry more than a few files

Best of luck to you!

Smitty July 7, 2011 at 1:57pm

I think you hit the nail on the head Jeff. If you are a control freak there would be no way you could outsource your short sale to a 3rd party. Our brokerage works with many other Realtors, some with loads of experience who are sick of dealing with short sales and some who have never worked a short sale. The one thing they have in common is they were able to let go of that one part of the puzzle. First and foremost are the homeowners we work with. If they don't agree with our business practice, we cannot move forward. So far, that has never happened.

You have to keep in perspective that 5-10 years ago, Realtors had no idea how to negotiate short sales and it was "other" companies that did this job. Lawyers mortgage brokers, title companies, etc., did this work...not Realtors.

I get that it's not for everyone. It's definitely a niche market.

Jeff Payne July 7, 2011 at 4:23am

BTW, just to be clear, I am NOT against 3rd party negotiators, I have never needed one or have not seen the need for one in the future, it is just a business decision to use one or not. If I found the need for one, if I did more short sales, I would probably hire someone in house to work on my team as a negotiator or short sale specialist. Probably the control freak in me to not want to take the chance of handing someones financial future off to someone outside of my reach.
Jeff Payne said:

I dont think it has anything to do with that in my area, there is way too much to choose from, too many listings on the market as a short sale so the buyer doesnt have to pay anyone to negotiate for them. The listing agent took the listing knowing that they could not or would not work the short sale, then in my opinion the listing agent should pay for the services that are benefiting the listing agent. There is a reason that most lenders wont pay for third party negotiators anymore, what is that reason?
Smitty said:
Sellers are the only ones that should be hiring a 3rd party. (although we've been hired by the buyers) Most sellers don't have the excess income which is why charging the buyer works. It works all around as most selling lenders aren't paying 3rd party fees.

As a 3rd party negotiator, I've never struggled to get a buyer. On the contrary, most of our properties are under contract in 30 days or less. Any 3rd party that is struggling to get offers, is not working well with their listing agents. Listing agents should NOT be overpricing property. If the property is priced right, it will get an offer.

Jeff Payne July 7, 2011 at 4:18am

I dont think it has anything to do with that in my area, there is way too much to choose from, too many listings on the market as a short sale so the buyer doesnt have to pay anyone to negotiate for them. The listing agent took the listing knowing that they could not or would not work the short sale, then in my opinion the listing agent should pay for the services that are benefiting the listing agent. There is a reason that most lenders wont pay for third party negotiators anymore, what is that reason?
Smitty said:

Sellers are the only ones that should be hiring a 3rd party. (although we've been hired by the buyers) Most sellers don't have the excess income which is why charging the buyer works. It works all around as most selling lenders aren't paying 3rd party fees.

As a 3rd party negotiator, I've never struggled to get a buyer. On the contrary, most of our properties are under contract in 30 days or less. Any 3rd party that is struggling to get offers, is not working well with their listing agents. Listing agents should NOT be overpricing property. If the property is priced right, it will get an offer.

Jeff Payne July 7, 2011 at 4:16am

I agree with this for sure. If a listing agent takes on a short sale and knows up front that they are not going to handle it or can not handle it, they should expect to pay for someone to do their job for them. What is next, I am going to start charging buyers 1% or 1.5% of the sales price because I have an assistant who handles my transaction co ordinating and closing? Not much different in my opinion.

linda uribe said:

Thank you for the feed backs.

I offered the sellers agent to assist him with the short sale( I used to work for citi as a Asset manger in the short sale dept) but because of conflicts of interest and I do not have a real estate license, I was not able to do so.

I dont think the buyer or buyers agent should pay for a 3rd party fees. Especially if the sellers agent does not want to handle or do not have the knowledge to negotiate the short sale with the banks. I understand that the sellers probably do not have the money to pay for the fees, if an agent hires somebody else to do their work, it should come out of their commission not the buyers or buyers agent.

Beverly Cibulsky July 6, 2011 at 1:22pm

"The List Agent is the key to a successful closing and if they are farming out their work, you'd better be really SURE that that negotiation company can manage and close a short sale. "

Well said Kimberley!!!!! and to the point...

Let's not forget Linda's selling agent! They are an angel... to give up money to make it work for obviously a great buyer who appreciates thier agent's efforts!

linda uribe July 6, 2011 at 1:18pm

Thank you for the feed backs.

I offered the sellers agent to assist him with the short sale( I used to work for citi as a Asset manger in the short sale dept) but because of conflicts of interest and I do not have a real estate license, I was not able to do so.

I dont think the buyer or buyers agent should pay for a 3rd party fees. Especially if the sellers agent does not want to handle or do not have the knowledge to negotiate the short sale with the banks. I understand that the sellers probably do not have the money to pay for the fees, if an agent hires somebody else to do their work, it should come out of their commission not the buyers or buyers agent.

Kimberley Kelly July 6, 2011 at 1:02pm

I am a Short Sale List Agent in Palm Springs, California and am running into just what Linda is saying..alot! I list, work and close my own Short Sales, but when I present an offer on a Short Sale, I ALWAYS find out if the Agent is working it themselves, is experienced, is using a 3rd party and who they are. The List Agent is the key to a successful closing and if they are farming out their work, you'd better be really SURE that that negotiation company can manage and close a short sale. I appreciate it when the Buyer's Agent grills me and I do the same to other Short Sale List Agents. A good tip off to me is when the Listing Agent has something in the comments like.."Please do not call List Agent. Please call ***** or fax inquiries to****" Not interested. Too much space between the property and the Closer...sorry for you Linda-

Smitty July 6, 2011 at 12:21pm

Sellers are the only ones that should be hiring a 3rd party. (although we've been hired by the buyers) Most sellers don't have the excess income which is why charging the buyer works. It works all around as most selling lenders aren't paying 3rd party fees.

As a 3rd party negotiator, I've never struggled to get a buyer. On the contrary, most of our properties are under contract in 30 days or less. Any 3rd party that is struggling to get offers, is not working well with their listing agents. Listing agents should NOT be overpricing property. If the property is priced right, it will get an offer.

Jeff Payne July 6, 2011 at 12:04pm

smitty I understand your position but still believe it is the responsibility of the person that hired the 3rd party. Should not be a problem because every third party negotiator that tries to get my business tell me that I will be able to make substantially more money because I won't be wasting all of my time on the phone :-) there is one in my area that charges the buyer but they struggle to get buyers to pay it which means they struggle to sell them. The 3rd party is hired for the benefit of the seller so the sellers side should pay.

Smitty said:

I disagree. I don't think sellers or agents should ever have to pay a 3rd party negotiator. Most sellers are strapped enough, so let's add 1% of the sales price to them. Keep in mind if there is EXTRA money the sellers have, it will likely go to the lender.

Fannie mae specifically has guidelines that allow fees paid BY BUYERS to 3rd party negotiators because it has become such common practice now. When you buy an REO property, the BUYER pays all of the fees involved. So a short sale should be different? When a lender reviews a HUD, as long as total costs fall under the % guidelines set by the investor, they are approved, regardless of whether you think that the lender is getting less net. There are more and more 3rd party negotiators from lawyer’s offices, brokers, agents, title companies, and others with seemingly different experience. Granted, not all are good, but then again, I've run into some pretty stupid agents attempting to negotiate short sales. I know they all can't be bad because in my area they are doing a booming business.

I see NO problem charging a buyer a short sale negotiation fee so long as it is properly disclosed in the listing. Let the buyer decide if the property is worth paying the fee or not. In June 86% of all single family and multi family properties with a $5000 negotiation fee were under contract in Massachusetts. So the buyers don't seem to have a problem paying the fee.

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Typical fees for 3rd Party Negotiators

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Well said Kimberley!!!!! and to the point...