BiggerPockets

Ive been working on a possible short sale and received the following from the listing agent

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**** and I work with a 3rd party company that negotiates
all our short sales...They have the relationships with the lenders and are able to make the process of getting each deal to closing that much smoother...Should you make an offer, please keep in mind there is a 1% buyers fee. The VALUE to you and your client is less headache and time on working this deal out with the lender. Not to be presumtuous, but you
would want to make an offer that considers this cost.
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I called BS and that fee has been now negotiated to the seller on the HUD statement

However any 3rd party that receives money at closing raises red flags that there is some sort of mortgage fraud involved. So im looking every where i can find for second thoughts and on this, and would appreciate any feedback.

I don't have a problem with the listing agent farming out the short sale process. I don't think it's their job to do, they need to be showing houses and qualifying prospective home buyers.

I do have a problem with anyone who says they have 'relationships' with the bank, unless your dating the banks and paying alimony on former 'relationships' with banks.
All we can do is try to 'persuade' the bank, they still have their guidelines to follow so they don't get in trouble with bank auditors.

It's good that you got the 'crap' charge on the sellers side, from my experience I've always been told what they want to 'NET' so anything outside of that they don't really care about as long as you disclose to them.

Again I could be completely wrong, I'm only 1 guy who does a handful of these a month and I'm sure there is someone else here that does a lot more than I do.


Good luck

there is a solution, i will pm you.

eh, i was a bit irritable last night when i checked out this 3rd party.

Although i'm grateful for all the responses, this doesn't sooth my concern that a 3rd party is getting cash at closing. But perhaps thats just the way it goes in theese economic times

Seemo i replied to you PM, would appreciate your feedback

Thanks SeeMO,
Now i understand!!

We had told the selling agent that we were going to reduce our offer based on the dollar amount of the 1% fee. Thats when they said the bank would pay it and move it over to them on the HUD statement at closing.

also appreciate the comments regarding closing. I know legally im not liable, but from a business perspective knowingly participating in a suspect deal isnt the way i want to run my business.

Hence the point of my post.

As always grateful for the feedback

And these negotiators deserve to be paid.
it is an entirely separate skill set and a different job than marketing the property.
As long as it comes from the lender then you aren't "paying " it anymore than you are paying the other costs of the transaction like title escrow etc.
The hardest working person on my short sale team is the negotiator in the a short sale transactions.
Stick together and demand the bank pay these fees. The reason the banks cut commissions etc is because they can. If more realtors would toughen up or get out of the negotiation business (which is brand new) and let people like Mitsu and my girl earn a living the job would be easier.
Mitsu I like you already, want some more deals? PM me.

What we have been doing out here on the left coast is having the buyer ask for a credit of 1-2% in the contract.
It is one more bargaining chip is all when the short sale negotiator makes a deal, says you have a deal, just waiting for the final investor approval, and then the investor comes back after everybody hears the deal is done and they cut the commissions or other closing costs from the seller's side.
They are playing you like a harp from hell but as long as people get taken by it they will keep doing it.

George,
There's enough people taxing every deal as it is. Title and escrow will never go away, commissions are only there if somebody is in the deal before you and adds them, but the Loss Mitigation piece is a brand new thing and most people see it as a new expense with little or no added value thye just don't understand it maybe. I've met BS artists in every arena and they all have to pass the same smell test before getting my money or getting my recommend
As with real estate people, gurus or attorneys I use them if they add value in excess of their expense. Otherwise I am used to doing things myself. I like it that way and I only delegate when someone proves their ability to add value.

Well for whatever its worth
I made my offer in February, we received no reply from the listing agent & this property is still listed is still listed in the FMLS as active

So much for that 3rd party mitigator

Hey George,

You need to ask your agent why the house is still active in the MLS. That has nothing to do with the mitigator. Your agent should still be looking out for your interest in the contract.
The mitigation company gets the short sale package together, gets it through the process (the hardest part), and then gets an approval or counter offer to you. They have nothing to do with the MLS, writing of the contract, or any of the real estate stuff the agents get paid a commission for.

Does your contract allow the home to stay active on the MLS?

Also, I am not sure why you are not hearing status on the short sale. I usually send a weekly update on my files. It is up to the agent to pass that info to you, if they don't give me your email address for updates.
There are a lot of bad companies out there, like in any other business. It also depends on the bank on how quickly the file is reviewed, 2 weeks, 30 days, 120 days +. However you and your agent should be getting status.
Good Luck
Mitsu