The Reverse Mortgage Short sale Option in Massachusetts and New Hampshire

Wednesday, May 16

The Reverse Mortgage Short sale Option in Massachusetts and New Hampshire

So you or a loved one are under water with their home and wondering if there is an option for you to sell. We offer reverse mortgage short sale negotiation (free to any seller {like our traditional negotiation}) and know the process thoroughly. There are some key things to remember when negotiating a reverse mortgage short sale.

1) Good news – The HECM is a “non-recourse loan”. This means that the HECM borrower (or his or her estate) will never owe more than the loan balance or value of the property, whichever is less; and no assets other than the home must be used to repay the debt.

2) The property (as with most short sales) MUST BE SOLD AS IS – This is a HUD requirement

3) An FHA appraisal MUST be submitted with the offer (paid by the seller – not buyer)

4) The services is likely NOT the seller – Payoff must go on line 504 of HUD-1

5) If the appraisal expires it is the SELLER’S responsibility to procure another one.

6) HUD is VERY specific in what are allowable costs on the sellers side of the HUD-1. We know what is and isn’t allowed, so if you have questions CONTACT us and we can go through your HUD-1 with you. If you put non-allowable costs on the HUD-1, you will prolong the sale

7) When title is pulled you will see two liens. One will be the servicer and one is the HELOC. The servicer will acknowledge in the approval the lien has a zero balance and the HUD-1 for release and then the HELOC is getting paid off

Keep in mind the above information and your reverse short sale SHOULD go smoothly. We are happy to assist you with your servicer and work with reverse mortgage short sales on a continuous basis. We may consider paying the FHA for a seller if they are truly insolvent.

Your Massachusetts, New Hampshire and Maine SHORT SALE CLOSERS!
Maryann Little, VP Short Sale Mitigation
Nick Aalerud, Exec VP Short Sale Mitigation, Broker New Hampshire / Massachusetts
http://shortsalemitigation.net
http://twitter.com/rapidshortsales
http://aapremierproperties.com
978-384-0032
603-505-4642 (f)
Stoneham, MA - Plaistow, NH
Short Sale Negotiation in Massachusetts and New Hampshire

Should you Raise Your Short Sale List Price? Massachusetts

Monday, March 19

Should You Raise Your Short Sale List Price?

 People always look at me funny when I say I love short sales.  Every sale is different and maybe that’s what I like.  I like getting the approval, and hearing the relief in the voice of a homeowner.  I like my team and all the brokerages we work with.  I will say though, that anyone that tells you they are an EXPERT in short sales you should always speak to them with caution.  I don’t claim to be an expert because this industry changes DAILY.  It’s almost impossible to be an expert.  I think what homeowners should be looking at when they hire a short sale negotiator is their approvals.  The proof is in the pudding so to speak.

So TWICE I’ve had something happen that I’ve been rather shocked by.  I had to write about it because I don’t know if it is the “norm” or the “exception”, but the question of the blog today is – SHOULD YOU RAISE YOUR LIST PRICE? – My knee jerk reaction immediately after saying it out loud is NO, ABSOLUTELY NOT.  Not in this market.  Heck no!  No way.  THEN, I had two properties close after some struggle in which we HAD to raise the list price.  Let me explain both.

Short Sale Property #1 sold in Hampton, New Hampshire last year.  It was the first resale out of a condo complex built in 2006.  These condos originally sold between $650,000-$800,000.  They were on the water and I remember having a long discussion with Tom McGuirk, the list agent about the fact it was the first resale out of the building.  Tom has worked in the seacoast market for years.  He’s in my opinion just about the best agent you can find in the Hampton market.  The seacoast in my opinion doesn’t seem to sell like the rest of the property in New Hampshire.  It’s a very unique market.  Anyways, Tom listed the property for $350,000, which he felt was competitive based on other condo resales in Hampton with a water view.  We were up against multiple auctions which is never fun.  We got two offers in.  The first was for $310,000 financed and the second was for $300,000 cash.  Now, normally I would take the cash over all day long over the financed, but it was executed first so that’s what we went with.

This property had one lien with Bank of America.  We went in with the offer and immediately were told it was too low.  They did the valuation and it came back at $400,000 and if we couldn’t get an offer in that range, the file would close.  Tom and I both knew the valuations person could NOT have understood or taken into consideration this was the first RESALE out of this building and the negotiator indicated that all the comps were from that building.  Everything was thousands of dollars higher because they were all new unit sold comps.  We were dead in the water, and Tom and I had a nice discussion about what to do.  He said, “Let’s show them it’s not worth $400,000,” and of course I thought, well how do you do that?  Anyways, Tom listed the property at $400,000.  The first buyer file was closed because they would not increase their offer to within the $400,000 range.  We knew we had a bit of time before the auction was reset so, we waited with the second offer in hand.  Not one other inquiry happened when we increased the price.  Obviously people understood that it wasn’t worth $400,000.  We waited until about 2 weeks before the next auction and we submitted the $300,000 lower offer.  We also submitted the same rebuttal value information that we did with the first offer.  The new negotiator ordered a new BPO.  This time, we were within range.  By the time the sale closed BOA and the buyer agreed on $317,000 and the homeowner had a perfect approval with no deficiency.  Unfortunately what did I learn?  That raising a list price does NOTHING but waste everyone’s time, however when we showed the bank the list price and there were no showings, they started to listen.

The second short sale that we raised the list price on we just closed and was located in Middleboro, Massachusetts.  This was similar to the first one, however took MUCH MUCH longer.  We initiated a sale in 2010 in the fall on this house.  After extensive conversations with the homeowners, and listing agent, they agreed to list it at $199,000 because the house needed work.  An offer came in close to list price and was presented to the lender.  I remember the negotiator saying, you only listed this so you could get a quick offer and he shut down the file and said the offer was too low.  I asked him what the BPO came in at and he said the $260,000 range, so we relisted at $254,900.  Tick tock tick tock from January 2011 to October 2011, small progressive price drops and then down to $199,000.  We finally got an offer in October, at just about the same price as the first one.  It just closed.  So in each case relisting at the higher amount did NOTHING but waste the homeowner’s time, banks time, list agents time, and above all drain the homeowners more financially.

Raising the list price does nothing but appease the bank, which you MAY need to do in some circumstances, but overall it’s a waste of time.

Your favorite short sale approval gal!

The LENTH of a Short Sale; Negotiation New Hampshire Massachusetts GMAC

Sunday, January 15

The LENTH of a Short Sale; Negotiation Beginning to End Case Study New Hampshire GMAC Sale.

We negotiate short sales in Massachusetts and New Hampshire Primarily (and a few other states) and I would say the number one question we get from homeowners is, “How long will my short sale take?”

Well there is no easy way to answer this question.  There are many factors that influence the length of a short sale, so I thought I would try to explain what will impact your sale length and then give you a case study of the GMAC short sale we just received approval on.

First, you should consider the time it takes to list your property and then get an offer.  Once you have that timeframe, disregard it.  There are many schools of thought, but I don’t take the time it takes to market and get a short sale under contract into consideration.  That is because you have some agents that list properties high, and do gradual price reductions.  That type of marketing takes longer.  It can take several months or even a year or more.  I personally don’t care for this type of approach because to me, this forces the homeowner into debt further by holding onto a property longer.  The longer they are on title with a property that is draining them financially, the worse off their situation becomes.  Then there is the other perspective that other agents take in which they aggressively market and get an offer on a property very quickly.  This obviously CAN speed up the overall time if it’s done in the appropriate way.  You cannot list a property way under market comps or your sale won’t be approved, but you can list it at the middle to low end of comps and have a strong chance of getting your offer accepted.

Now, when you have an executed purchase contract you can start the clock. 

One factor that can influence the length of the sale is the BPO.  BPO is the broker price opinion or the valuation of the property.  If the valuation comes in too high, then this can prolong the process.  Another BPO may have to be ordered, or you may have to wait until a BPO expires until a lender orders a new one, or you may have to combat it with a full blown appraisal.  You want to make sure your offer price supports the valuation price.

Secondary lenders can hold up a sale.  If a second lien holder holds out for more money than what the first is offering, this can stop the process in its tracks.  You have to anticipate these little bumps.
Undisclosed liens can hold up the process.  Pulling title up FRONT is one sure way to find issues.  If there is a lien on the property you were unaware of, it should get put on the HUD and submitted OR negotiated down or both.
Buyers or sellers flaking out will prolong your sale.  Buyers may not wait the time it takes to negotiate or sellers may decide to let a property go to foreclosure.  It will hopefully not happen to you but it CAN.  You should try to do your homework up front.  Make sure your seller is READY to sell and buyer is COMMITTED to the process.

INVESTOR MINIMUM NET, may impact your sale.  The investors have minimum requirements for their sales.  Most often, you won’t know this number until you submit an offer.  If the offer is too low, the sale can get rejected, and you may have to counter or start all over.
A loan getting sold and a new servicer taking over will GREATLY impact the time it takes to negotiate your sale.  This is my least favorite thing in the world.  I had a Litton Loan sale this year that took me one year to negotiate.  It went to the investor for approval and BAM, got sold to Ocwen, so now I start ALL over with a new servicer.

The above represents SOME of the issues that may impact the length of your short sale.  Below is an actual case study from our GMAC New Hampshire Short Sale Negotiation.  The below file had one mortgage and one lien.
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September 28, 2011 – Get call from frantic New Hampshire Homeowner.  Need to sell property.  Auction scheduled for October 11, 2011 (normally I don’t take these sales, nor do I like them, but we took a chance)
September 28, 2011 – Call local list agent to see if they will list property
September 30, 2011 – Property listed
October 10, 2011 – Spoke to Trustee – auction stopped for validation of debt – postponed until  11/22
November 8, 2011 – Purchase contract executed
November 14, 2011 – Package submitted to GMAC and immediate request for cancelation of auction sent
November 15, 2011 – File assigned to a negotiator after escalation
November 17, 2011 – Spoke to Customer Service as file still didn’t appear in Equator.  Didn’t know negotiator email, just got a phone.  Left a message to request interior BPO
November 17, 2011 – Spoke to Executive Office.  File declined for offer being too low.  Drive by BPO was completed November 7th.   Explained issues with property and asked for postponement.  Valuation could not possibly be accurate.  Left message for negotiator.
November 18, 2011 – Negotiator indicated an offer of $70,000 may get auction stopped
November 21, 2011 – New higher offer  of $55,000 submitted in hopes auction would be stopped
November 22, 2011 – Auction stopped.  Not sure why, but will take it.
November 23, 2011 – Immediately requested Interior BPO
November  25, 2011 – Title finally returned – Welfare lien found. 
November 28, 2011 – File finally set up in Equator via negotiator
November 29, 2011 – Finally uploading files to Equator as each task assigned.  Name affidavit need to be signed an notarized by buyer and seller.
December 1, 2011 – All files uploaded and sent
December 2, 2011 – BPO agent contacted us for valuation
Deceber 6, 2011 – Valuation complete.  New bank statements must be submitted as auction is set for 12/22
December 7, 2011 – all requested paperwork completed and uploaded
December 12, 2011 – calls, emails and faxes to negotiator and superior asking for postponement and status update
December 13, 2011 – still awaiting valuation review per negotiator
December 16, 2011 – email from supervisor she was escalating at valuation department
December 19, 2011 – called and LM for negotiator regarding postponement.  No response.
December 19, 2011 – emailed CEO or GMAC, superior of negotiator, negotiator and 5 other people about auction and the fact valuation was not back
December 19, 2011 – Auction canceled until 1/23 – Verified with Trustee
December 21, 2011 – Sent note to negotiator the welfare lien was going to be added on HUD-1 as soon as I got OK from town regarding discount request.
December 26, 2011 – Still hadn’t heard from town if they will accept discounted payoff on lien
December 29, 2011 – Town will take 20%  of balance
December  30,2011 – Sent in corrected HUD with lien added and asked for status update
December 30, 2011 – New valuation ordered.  Issue with BPO
January 2, 2011 – Valuation complete
January 4, 2011 – Called GMAC – Offer Countered to $65,000
January 7, 2011 – Buyer countered to $60,000 – Submitted new offer, and HUD-1
January  9, 2011 – Called negotiator.  Auction creeping up.  File put forward to investor for approval
January 10, 2011 – Called to find status update
January 11, 2011 – APPROVAL – SHORT SALE APPROVED – 30 days to close
January 12, 2011 – Coordinated with title company.  Closing set for January 31, 2011

Total time from submission to approval – 2 months
Total time from submission to closing – 2.5 months
Total time from listing to closing – 4 months

Feeling of getting it done…PRICELESS!
Maryann Little
http://shortsalemitigation.net
http://massachusettsshortsales.net
http://twitter.com/rapidshortsales
978-384-0032

 

 

 

 

Buyer Paid 3rd third Party Short Sale Negotiation fees. FRAUD? I think NOT!

Saturday, December 17

Buyer Paid 3^rd third Party Short Sale Negotiation fees. FRAUD? I think NOT!

People throw the “F” word around like it’s the newest Hollywood trend. Unfortunately, what it primarily does is further misinformation along the internet like a contagious disease. Let me say up front, our firm is a 3^rd party short sale negotiation firm for others and we do charge our fees to the buyers. My partner Nick, owns a licensed brokerage in New Hampshire and Massachusetts and homeowners hire us to negotiate their short sales. I have heard ALL the “haters” arguments. I normally let things roll right off me, but sometimes stupidity merits a response.

I happened to be researching something on the internet today when I came across a blog written by a “hater” – You can tell a hater because the LOVE to throw out the term FRAUD or SCAMMER. Short sale fraud, mortgage fraud, FBI investigates fraud, flip scammer, 3^rd party negotiation scam, and they love to tout how much fraud there is in this country, but have very little in the way of substance and facts in their blogs. They regurgitate other blogs, or bias studies, and never actually RESEARCH the subject they write about. They will tell you not do deal with “that type of person” or don’t work with “that type of group”, when in reality THAT group may do an excellent job. They canvas the internet with the words fraud and scam and scare the crap out of homeowners, and readers alike. They make generalizations, have a clear prejudice against certain groups, and yet can’t seem to EVER cite the law in which the fraud has been committed. They sleep with the word SCAMMER under their pillow and foster the hate towards others.

So this blog in a nutshell claimed it was FRAUD for a 3^rd party negotiator to charge the short sale negotiation fee to the buyer. They CLAIMED that because the mortgage lien holder was netting less because of the negotiation fee, fraud was being committed. They professed the best way to address the fee is to add it as a seller concession. Now, I know why we don’t do that, but let’s examine this a bit.

Most third party negotiators charge in several manners. Some, charge the fee directly to the list agent, stripping the list agent of their hard earned commission. Some, charge the lender the fee in the form of seller concessions, and some charge the buyer directly, such as us. In each case there are areas that could raise an eyebrow if the fee was not properly disclosed up front. Now, in our case charging a buyer a short sale negotiation fee is disclosed by the listing agent in the description of the property on MLS. This puts the burden on the buyers. The buyers now have a decision to make. Do they want to buy a house that has extra fees included? It is not UP to an agent to make that decision for a buyer. I have read countless threads where agents say, “I just won’t show that property to my buyer,” to which I respond, “It’s not your decision to make!” If a buyer is ok with the fee and wants to see the house, it’s NOT UP TO THE AGENT to NOT SHOW IT.

Now, let’s get onto the lender netting less because of the fee and the CRAZY claim that it’s fraud. So, let’s look at this fee paid by the buyer paid at closing vs. seller concession. YES, when a buyer offers $400,000 on property, like other 3^rd party negotiators, we allow the buyer to reduce the offer into the lender the amount of the negotiation fee. So for example if the $5000 negotiation fee is subtracted from the offer price, the lender in essence gets $395,000. Now, a purchase contract is generated, the offer to the lender is $395,000 and the $5000 negotiation fee is written right into the contract as an agreement between the buyer and seller for the buyer to pay the fee at closing. This fee is EXACTLY the same as when a short sale is listed and the buyer is responsible for smoke certificates, title V inspections, certificates of occupancy, etc., which are all usually the responsibility of the seller, but in a distressed situation, they historically become the responsibility of the buyer, as either the seller is under financial duress and cannot afford those fees OR the selling lender in an REO situation discloses those items need to be paid by the buyer. In each situation, the listing agent CLEARLY identifies those are the responsibilities of the buyer if they want the property. In the case of seller concessions, the buyer’s offer is the same. They are still paying $400,000 for the house, and the fee is deducted from the proceeds as a concession for the seller to pay. THE BANK NETS THE SAME AMOUNT $395,000 as in actuality the SELLER (Mr. or Mrs. Smith) is not really coming to the table with the money. So, the argument that it’s FRAUDULENT to charge a buyer a negotiation fee because the bank NETS LESS, holds no water. The BANK NETS THE SAME amount of money. Now of course, there are dozens of other fees that are deducted from proceeds of the sale, however I’m trying to make this simple so ANYONE can understand this.

It is NOT NETTING the lender less money to have a buyer paid negotiation fee. It is also not fraudulent for a 3^rd party negotiator to charge a short sale negotiation fee to a buyer so long as everything was disclosed up front, put on the HUD and in the contract. Disclosure is key. FRAUD is INTENTIONAL MISREPRESENTATION. Be smart enough to know who you are dealing with and if you have questions, ASK THEM! Don’t just write up irresponsible blogs and articles as there are plenty of those already on the internet scaring people.

Now less discuss one other outrageous comment I read which pertains to overpayment. This blog spoke about buyers overpaying for property if they pay a negotiation fee. Let me make one thing perfectly clear. SHORT SALES are considered DISTRESSED PROPERTY. A distressed property sells CHEAPER than their non-distressed counterpart because a distressed property is considered by the appraisal community as LIQUIDATED VALUE. (Please read my post on what liquidated value is) – MOST lenders will also take a percentage % of the BPO price. So for instance, the bank values the property at $300,000 and most lenders will allow an offer that NETS them in the range of $240,000 - $276,000 which is about 80-92% of the BPO value. The type of loan the seller has will give an indication what the lender will want to NET so for instance I’ve seen discounts up to 80% of the BPO value on conventional and about 90-92% on the BPO if the loan was VA/FHA. There is NO overpaying for a distressed property unless a buyer WANTS to overpay. I’ve only seen ONE buyer overpay for a property, meaning pay more than the BPO value and it was an investor who wanted the property to develop on the land. Also, no lender for the buyer will pay more than what the property APPRAISES for and appraisals are market value.

Third party short sales negotiators charging buyers fee CAN be and IS done correctly by many firms. Know who you’re dealing with, check their track record, ask for their approvals and make sure the fee is disclosed before you execute the contract. So long as the above have been put out on the table, you will likely have a smooth transaction.

http://massachusettsshortsales.net
http://shortsalemitigation.net
http://twitter.com/rapidshortsales
Maryann Little, VP Mitigation - Short Sale Mitigation, LLC
Nick Aalerud, Broker, AA Premier Properties, LLC
New Hampshire and Massachusetts Short Sale Negotiation
978-384-0032

Stop treating a Short Sale with less Respect! Massachusetts

Friday, November 25

Ok, I’ll admit. I LOVE short sales. LOVE LOVE LOVE THEM. I know I’m in a vast minority. Not everyone loves the challenge, nor can rise to the occasion. I TRULY love short sales in Massachusetts and while most people give the eye roll when I say we are an attorney state, I think most of the time it works to our advantage. I mean in New Hampshire you sign a purchase contract FIRST and THEN iron out details, but in Massachusetts you can sign an OFFER first which stipulates the DETAILS and THEN sign your purchase contract. It’s a beautiful thing.

The problem I run into is some of the agents I’ve spoken to seem to fall over backwards when I tell that inspections should be done within 5-7 days of signing the purchase contract. It’s as if BECAUSE it’s a short sale, it’s treated “differently” than a traditional sale. NOOOOoooooooo. This is the ABSOLUTE WRONG premise.

First, keep in mind we are hired by the sellers, so my job is to protect them. Most of the time the selling agent has referred us to the homeowner, and we’ve worked out many of the details of the transaction long before the first offer comes in on the property. I LOVE Realtors who “get it” – Realtors who list a lot of short sales “get it”, but there are some agencies that teach short sales…well…backwards.

Last week I got a call from an Andover, Massachusetts real estate agent, who was interested in referring us to her homeowners. She didn’t like short sale and then when I explained that we make sure inspections are done up front, she seemed to think buyers would never go for it. First, give buyers some credit. If they like the home enough, they will usually work within the parameters the seller set for the sale, but more importantly you CAN’T wait for the short sale approval and THEN get the home inspected or you could likely jeapordize the sale. Here’s why. Let’s say we negotiate a sale, and God forbid it takes 5 months. This could be sale that has gone back and forth with counters, multiple BPO’s, appraisals, etc., and then when the waters part, we get that nice approval, full deficiency release and then read we have 3 weeks to close. Well, let’s say, the buyer is FHA, the inspection process is pretty grueling and can take up to two weeks, which leaves you ONE week for it to get to underwriting and pass the many OTHER requirements the buyer’s lender set forth. It won’t fly. What if the SELLING lender is nasty and says, “Listen, we’ve given you FIVE months to get your financing, inspections etc., in order and all you are going to get is this three weeks to close,” then what? Ok, upon inspection you find a faulty heating system, or mold, or a Title V that won’t pass, you may have a SLIM chance to go back to the seller’s lender and ask for a reduction or change terms of the approval. WHY WOULD YOU WASTE YOUR TIME? WHY WOULD YOU WASTE THE SELLERS TIME? WHY WOULD YOU WASTE THE SELLING LENDER’S TIME OR YOUR AGENTS TIME? GET YOUR INSPECTION DONE UP FRONT BEFORE the purchase contract is signed and that way if there is a significant problem you can adjust your price before you waste anyone’s time.

Get your offer solid, and in order if you are serious about the property. The agent I spoke with said she works with buyer’s that go around making multiple offers on properties. Other than an investor who is looking to buy multiple properties, that doesn’t fly. If you are making multiple offers on properties, then you are HARDLY committed to any ONE property. Get your inspection in order, get your financing in order and a commitment within 45 days and you’ll have a MUCH higher success rate of getting your offer accepted. BUYERS SHOULD HAVE THEIR INSPECTIONS DONE LONG BEFORE SHORT SALE APPROVAL SO THERE ARE NO SURPRISES. You don’t want ANY hold ups at closing. Once the approval is issued, you need to get to your title agent and get closing scheduled ASAP, NOT get your inspection done..NOT get your financing in order then.

A short sale is the same as a regular sale, only the lender approves the sales terms. Don’t treat it with less respect.  Maryann Little, VP Short Sale Mitigation (negotiations) Massachusetts, New Hampshire and soon to be Maine
http://massachusettsshortsales.net
http://shortsalemitigation.net
http://www.aapremierproperties.com/Follow me on TWITTERhttp://twitter.com/rapidshortsales

A Look At Short Sale Negotiation Fees in Massachusetts

Monday, November 14

It’s funny because I usually let the naysayer’s comments roll right off me. I find people who freak out about a buyer having to pay a negotiation fee have NEVER CLOSED a deal where a buyer paid a negotiation fee. I can always tell an old school agent. They’ve been in the business a while, think they know everything about real estate, and are mostly close minded and unopen to “other” ways of doing things.

This is a true story. I won’t name the agent, but she’s pretty well known. One of my reps met this agent. They had a great conversation and our company was invited to speak at her brokerage on the North Shore. Whenever we are invited to speak about short sales it’s an honor. There are still a lot of agents in New Hampshire and Massachusetts who are not comfortable with short sales. So it’s a win win whenever we can speak at a brokerage. We went in, did our thing and later had her call us with her first referral. Now, she knew how our fees were collected and STILL gave us a referral. I reviewed the paperwork and saw the homeowner filed bankruptcy and “surrendered” the property. I kindly notified the agent we could not mitigate a short sale if the homeowner didn’t own it. She didn’t even seem embarrassed that she didn’t know this little tidbit of info, but it tipped me off as to why this home never sold. It was on the market well over a year at an outrageous price. ***SIDE NOTE**** [PEOPLE, YOUR SHORT SALES NEED TO BE PRICED AGRESSIVELY – NOT AT THE TOP OF THE MARKET]

Anyways, the home didn’t sell, homeowner filed bankruptcy and the home was surrendered. I also got the distinct impression this agent didn’t even know what was going on with her own sales. So, the following week she contacted me again with another homeowner referral. She asked me to explain all of the risks of the short sale to the homeowner with one of her top agents on the line. When I was through the agent stated how fully impressed she was with my knowledge and thanked me. Then the fun part began…the paperwork. I gave the homeowner the packets for each lien holder on the property. This house was listed so I logged on to see what she had done with the listing. This house was nothing more than a mobile home, or at least that’s what it looked like. She had it listed at $300,000. I almost fell off my chair. That was back at the beginning of March and I just looked at the listing. It’s down to $250,000 and this is just about the beginning of JULY. What a waste of time!!!! This is what KILLS me. Anyways, I’m off track. So I explained to the listing agent how we have to put our disclosures in the listing. The seller was all set to go forward and we explained that potential buyers need to know up front that there is a negotiation fee and it’s up to them if they want to go forward. Suddenly, after two referrals and speaking at her brokerage, the agent couldn’t wrap her mind around the negotiation fee. Remember my “old schoolers?” Well this was one of them. After going back and forth via email and explaining AGAIN how we do this, she was not comfortable, so I kindly stated we really shouldn’t go forward if she wasn’t comfortable. It will never work if the listing agent is uncomfortable. It was very cordial, however very confusing after the two referrals and invite to speak at her brokerage.

More and more 3rd party negotiation firms are popping up, from lawyer’s offices, brokers, agents, title companies, and others with seemingly different experience. Everyone charges a bit differently. I know MOST of those that charge the buyer like we do, because they have the same fee structure. Agents are SICK of short sales (or at least the agents that come to me) – So, I decided to research this a bit more. In NNERENMLS, (neren) Nick (my partner and a broker) told me there is no way to do a search of files with a keyword. Maybe there is, but he couldn’t see it. However, in MLSPIN there is!! So I wanted to check to see about the horrible “negotiation fee” some agents seem to be very wary of. Here is what I found. Out of 28 Single and Multi Family Listings with a negotiation fee (primarily $5000 to the buyer) only FOUR were not under agreement. This is good news for 3rd party firms who negotiate and charge a fee to the buyer. I realize this is a progressive type of listing, but the proof is in the pudding. If buyers didn’t like the house, they likely won’t pay the fee, but only FOUR homes out of 28 were not under contract, which tells me buyers will 1) pay the fee if they want the house and 2) the house is priced right!! Remember my old school agent from above? Her $300,000 listing has been on the market for four months and is down $50,000 from where she started. It is still not under contract. Most of our listings are under contract within 30 days. This gives the opportunity to attempt to get the homeowner out of debt quicker. I don’t understand why an agent would price a home at the top of the market. This home will sit for a longer time on the market than necessary.

Buyers will pay a negotiation fee for work performed. This fee should only be paid upon delivery of the deed. NO ONE should be charging a fee up front, unless you are a lawyer. I’ve had some question the fee which is why I wanted to blog about this. For the naysayers out there, currently on the market 86% of short sales in Massachusetts with a negotiation fee are under contract. So the buyer’s paying a fee is NOT an issue especially if the home was priced right. Imagine if the home above was priced at $225,000 out of the gate? I suspect that’s the price it needs to get to before it has some major activity. Don’t be scared of buyer paid negotiating fees. It’s actually the best way to charge for a 3rd party negotiation service.

We’ve been able to save agents a LOT more commission this way as other 3rd party services charge the buying and selling agent. Why give up MORE of your commission in a market where you’re working three times as hard for less pay. It doesn’t make sense. Thank you to all the amazing agents in New Hampshire and Massachusetts. We wouldn’t be in business without you.

Maryann Little, VP Short Sale Mitigation http//shortsalemitigation.net Massachusetts
See original blog HERE at
Massachusettsshortsales.net