Comment

Comment by Bryant Tutas on October 10, 2009 at 12:17pm

Deidre, Just charge for upfront marketing. As long as it is for services rendered I don't think it matters what it's for. Look at tit this way...what if the seller decided to hire a brokerage that charges a set fee upfront just to place the property in the MLS? Is there anything wrong with this? Of course not. All I'm doing is charging some now and some later.

Comment by Deidre St. Romain on October 10, 2009 at 8:07am

I have yet to do this but am looking into setting this up. Since we can't charge "transaction fees" I thought about setting up an LLC and calling it a mitigation service fee. People are now actually starting to expect it and why not? We all know how much preliminary work goes into this process not to mention once we actually get the contract and start the process. So yes I am for it and am going to institute it.

Comment by Mayra G Torres Cagigas on October 9, 2009 at 5:53am

I think that charging an up front fee (minimal) is acceptable and I too agree with Bryant it shows some sort of commitment from their end! MOTIVATION IS EVERYTHING...great forum I'm a new member and I look forward to sharing more and contributing as well!

Comment by Skye Hawk on October 7, 2009 at 5:56am

Josh- One of my clients is a successful Realtor in Miami who handles tons for short sales and he does charge a small upfront fee like Bryant to make sure they are motivated. This keeps the client motivated to see the process through. We have been successful and many short sale sales and the clients seemed to always come up with the funds for the fee.

Comment by Bryant Tutas on October 6, 2009 at 2:38pm

Kelly, I on the other hand do charge a small upfront fee on short sales. It has nothing to do with my confidence level but everything to do with making sure the seller is truly motivated. There is noting wrong with doing this. In fact most of my sellers WANT to put some skin in the game. It helps them to feel more in control.

Comment by Kelly Walters on October 5, 2009 at 3:44am

I do not believe in charging an upfront fee! If the client can't make his/her mortgage payment where are they supposed to get the money to pay these fees? Furthermore, any agent that has to charge an upfront fee must not have confidence in his own ability to get approval so he should probably just refer the homeowner to someone who can.

I do charge a processing fee in addition to commission but I show it on the HUD as payable at closing. I pad my fees and commission slightly with the full expectation that the lender will want to negotiate. My compensation ALWAYS comes from the lenders net proceeds and NEVER from the client. I've never had to accept less than a 6% commission and oftentimes I am able to collect a reasonable transaction fee as well.

I also handle all communication and document submission to the lender.These are complex transactions that the homeowners could not possibly be expected to navigate themselves!

AN IMPORTANT NOTE TO ALL AGENTS- please keep in mind that you represent the homeowner, not the bank. You can not rely on the instruction of the lender to get the transaction closed because they are only looking out for themselves! Our responsibility is to the client- get their home sold, work out a reasonable settlement with the bank, help them avoid foreclosure and minimize the damage to their credit. Hopefully avoid a deficiency judgement/promissory note. Also- marketing a short sale is very different from marketing a traditional owner sale! There is absolutely no reason a short sale listing should ever expire without an offer! I see this all the time in my market and it kills me because the sellers have by now given up and abandoned the property instead of getting the help they really need! Agents need to know when to swallow their pride and ask for help!!!

I have an addendum to my listing agreements that state that the homeowner is free to terminate our agreement at any point in time right up to the day of closing and owe me nothing. If they decide to keep the home or if the do not like the terms of the settlement agreement they are not obligated to proceed with the sale. I've never had any client walk away from the deal however because they know I've negotiated the best possible terms on their behalf.

OK- I'll get off my soapbox now. LOL! I love working short sales and invite questions from anyone that wants to learn more about them. Email me directly at [email protected]

Kelly Walters
Short Sale Specialist
Greensboro, NC