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Keep us informed. Your situation happens all too often in my area.....
Whomever represented you should take that $500 out of their commission to pay the negotiator.
Gabe: I am sorry that you are having this experience. And it also appalling to me, that no one indicated to you, that if you feel the agent did not do his/her job, every agent has a Broker that you can call. In my office, many times the agent had to pay out of the commission for similar mistakes. In California, you can charge the buyer for negotiating a short sale, however that needs to be disclosed on the MLS, by the listing agent. This is one of the things I look for, when searching for property for my buyers. I disclose, and they decide if they want to go see that property.
in the newsletter today
In reality, you the buyer is not negotating the short sale; nor is the short sale negotiated on your behalf. When the agent took the listing and decided to do a short sale he/she should have either have the ability to negotiate the short sale directly or had in place an agreement with a third party to do same.
Unless you signed an addendum or this was disclosed to you in the purchase and sale contract then in my opinion you are not obligated to pay it. Visit: www.FLshortsalePros.com for some more FAQ's
I am a broker in CA and a master of making buyers pay for negotiation fees! ;)
First off, if this is on the HUD as a commission, it is illegal unless a certain type of disclosure was given with respect to wording and font.
Outside of the HUD, you will need a separate agreement between yourself and this negotiation company. However, this company CANNOT collect any fees upfront unless they are a lawyer and have entered into a lawyer/client relationship with you. Since you are the buyer, I don't even see how this is possible as they are not able to negotiate a debt settlement in your behalf. Also you were right, they cannot hold up this transaction because of your refusal to pay.
Maybe for kicks, you might want to file a small claims for your $1000 if this company didn't have a verbal or written agreement with you AND they were performing a service for the seller and not you. Chances are they were doing a service for the seller (debt settlement) and the listing broker (approval of debt settlement based on a purchase contract between the two brokerages).
All in all, I would have to see how this whole transaction was setup to better help you. Signed disclosure is key. In fact, my personal disclosure says the following:
"The buyers, <buyer names>, is/are aware that the seller is negotiating with the lender(s) on the property located at <address> to reduce their respective loan balances by an amount sufficient to permit the proceeds from the sale of the property to pay the existing loan balances and other seller allowable expenses on the property. The buyer is aware that there may be expenses, normally paid for by the seller, which the lender(s) will not pay, and that may have to be paid by the buyer in order to complete this transaction."
It goes on to say that you will be responsible to compensate the brokerage for x dollars and that real estate commissions are negotiable between buyer and broker.
I had to have this created because I was losing too much money in short sales.
Congrats on the purchase of your condo. I am in Orange County, CA and in my area, you can't buy a dog house for 100k! ;)
First of all, the fact that you mentioned he is your friend, speaks volumes on how much you value that friendship.You also mentioned that he is just starting out?So I can only guess that he is being coach and advised by his/her Broker of record.
And the way he handled the "fee" was on the advice of that Broker...That agent needs to get a new Mentor,if not Broker. Friendship is far more valuable than loosing your friend over $1000.00. However if he does not take the consol of a friend, and the experience that you both have just experienced, then his value of your friendship maynot be as high as yours.
It is a tough situation...The Bible say's take the issue to your friend work it out, friendship is far more valuable than $$.If he sees his mistake, and corrects it, it is all good. His association speaks volumes, Have the two of you sat down to speak with his Mentor/Broker?
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