Sellers agent is charging the BUYER a 1% fee to negotiate the short sale...heres the language:
"Processor is negotiating a short sale, or discounted mortgage payoff, on behalf of the Seller and
Buyer of the Property. Processor, Seller, and Buyer agree and acknowledge that this sale is to be
conducted by including a Buyer Discount Fee of 1%(one percent) of the sale price but no less than a $2,500.00 minimum, to be paid to Processor ("Buyer Discount Fee"). The Buyer Discount Fee shall be paid by the Buyer to the Processor as an additional settlement charge to be included on the HUD-1 Settlement Statement and will be paid at the time of closing."
and the sellers agent won't even present the offer to the seller unless the buyer agrees to sign this addendum...1) is this legal and 2) are any of you doing this and 3) has it been done to any of your buyers?
Thanks
Tags:
Kent - Agree. But there are some agents who create corporations in order to just charge extra. I've seen it. It is going on in my market place.
Kent Dills said:Wendy, Please re-read the original post. No one is suggesting that the real estate agent is getting paid double. This is simple a way to get a third party negotiator paid and not have to carve that value-added expense out of the Realtors' commissions/pay!
Wendy,
That is the situation in the scenario I encountered...the wife (sellers agent) is a partner with the husband (negotiator) in the company that is getting paid the 1% fee.
Wendy Rulnick said:Kent - Agree. But there are some agents who create corporations in order to just charge extra. I've seen it. It is going on in my market place.
Kent Dills said:Wendy, Please re-read the original post. No one is suggesting that the real estate agent is getting paid double. This is simple a way to get a third party negotiator paid and not have to carve that value-added expense out of the Realtors' commissions/pay!
Then you've revealed it - just an agent finding a way around the system.
Steven Jackson said:Wendy,
That is the situation in the scenario I encountered...the wife (sellers agent) is a partner with the husband (negotiator) in the company that is getting paid the 1% fee.
Wendy Rulnick said:Kent - Agree. But there are some agents who create corporations in order to just charge extra. I've seen it. It is going on in my market place.
Kent Dills said:Wendy, Please re-read the original post. No one is suggesting that the real estate agent is getting paid double. This is simple a way to get a third party negotiator paid and not have to carve that value-added expense out of the Realtors' commissions/pay!
Exactly!
Wendy Rulnick said:Then you've revealed it - just an agent finding a way around the system.
Steven Jackson said:Wendy,
That is the situation in the scenario I encountered...the wife (sellers agent) is a partner with the husband (negotiator) in the company that is getting paid the 1% fee.
Wendy Rulnick said:Kent - Agree. But there are some agents who create corporations in order to just charge extra. I've seen it. It is going on in my market place.
Kent Dills said:Wendy, Please re-read the original post. No one is suggesting that the real estate agent is getting paid double. This is simple a way to get a third party negotiator paid and not have to carve that value-added expense out of the Realtors' commissions/pay!
Let's say that my husband used to be a loan Mitigator for a major lender. He lost his job and now has created his own loan mitigation company (instead of collecting unemployment and complaining about the economy) and is negotiating SS and because he knows the system well he is very good at it. If my husband negotiates some of my own deals...(I'm a broker/agent) you guys are saying that he should work for free because we are related?
3rd party negotiators are very common now days and they charge a fee for their services, it's disclosed in the MLS that the buyer pays X and any buyer's agent knows this ahead of time. Because SS are usually acquired below market value because of the circumstances surrounding the sale, chances are that the buyer is still getting a good deal for his/her money and coming ahead.
Ultimately it is the buyer's decision whether to proceed with the offer or not, if buyer's agent feels that they need to make sure buyer understands that there is a relationship between negotiator and seller's agent then buyer's agent should make sure his buyer understands and if buyer feels like this is unacceptable then they can move on to another property.
Disclosing is best and perhaps the seller's agent should disclose to that seller that he/she is related to the negotiator from the moment they establish a formal listing relationship.
Just my 2 cents.
Steven Jackson said:Exactly!
Wendy Rulnick said:Then you've revealed it - just an agent finding a way around the system.
Steven Jackson said:Wendy,
That is the situation in the scenario I encountered...the wife (sellers agent) is a partner with the husband (negotiator) in the company that is getting paid the 1% fee.
Wendy Rulnick said:Kent - Agree. But there are some agents who create corporations in order to just charge extra. I've seen it. It is going on in my market place.
Kent Dills said:Wendy, Please re-read the original post. No one is suggesting that the real estate agent is getting paid double. This is simple a way to get a third party negotiator paid and not have to carve that value-added expense out of the Realtors' commissions/pay!
Hi, Jeff -
You don't say where you are from, but if it is California, you might be in luck. The RE Commissioner put out a rather strongly worded document about expecting a Buyer to pay the negotiator fee.
http://dre.ca.gov/pdf_docs/ca/ConsumerAlert_ShortSalesUpdate.pdf
Charging the buyer these fees may be a violation of RESPA as a junk fee. There is no value-added for the Buyer since the Listing Agent/Seller is working with the lender on behalf of the Seller. Also, raising the sales price to cover the fee while giving the money back in the form of "closing costs" is a bundle of problems and likely, fraud, on many levels - such as re-routing money that the bank would have probably kept for themselves; using the charge as a way for them to get more commission money by hiring someone to do the work that should be a part of his duties.
Anyway, apparently the CA DRE have gotten a ton of complaints about this issue. This Alert begins with this statement in bold type and underlined:
This DRE Short Sales update is written on the growing, questionable, and sometimes unlawful practice of short sale negotiators ("SSN") requiring/compelling Buyers to pay the SSN's fee.
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