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kthamblin, Home Buyer in Portland, OR

We just put an offer in on a short sale home. The price is 349k with a 3% closing credit. Our realtor said we also needed to pay $4000

Asked by kthamblin, Portland, OR Sat Sep 22, 2012

for a short sale negotiator that is being requested by, I think, the seller/ other realtor or the bank? Either way, we don't need it, it sounds like it's more for the benefit of the realtors. We like this home, but we're in no rush to get in and we wouldn't be completely heart broken if we didn't get it. I feel it unfair to make us pay for this fee and I have been told by my realtor that the fee is not negotiable.....does this sound right or should we find a new realtor? Can we even use a new realtor on the same home if we've already put an offer in....(we are within the 3 day grace period to with drawl the offer)

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kthamblin’s answer
I completely understand the money doesn't go to either of the realtors....my only beef is that this other realtor is requesting the negotiator and then making us pay for it.
I had read web site after web site about how this fee is extremely unfair to be placed on the buyer.
We love the home, this transaction just feels unfair.

thanks for everybody's help though :)
0 votes Thank Flag Link Sun Sep 23, 2012
To be fair, a short sale negotiation fee has zero to do with extra money for your Realtor or the buyers agent, it goes directly to the negotiation entity. Some agents who work for the seller (listing agent), to help them sell their home when a short sale is in order (some sellers do not qualify), select a negotiator who deals with the bank(s) and other lien holders to provide a higher success rate of getting the sale closed. Short sales are unique at every turn and even the best short sale specialist is at the mercy of the lien holders and number of liens. If the house you're interested in has a separate company negotiating for the seller in addition to the listing agent there are sometimes added fees, such as the one you mentioned. You as a buyer need to identify early on, along with your agent, what the fees will be for you in any specific purchase, then decide if you want the house enough to pay it. There are many properties now being negotiated by the listing agent who are Certified Distressed Property Experts (CDPE) who will not require you to pay an additional fee, however beware they are not all created equal. You and your agent should investigate the agent whose doing the negotiating and ask up front about their level of experience in 'real' short sales they've closed successfully. Here's to your success!
Robin Weisgerber, Licensed OR Realtor
0 votes Thank Flag Link Sun Sep 23, 2012
thank you again :) I got on the phone calling everybody I knew that was a realtor or knew a realtor and asked about this fee and everybody told me, no, the buyer shouldn't have to pay this fee.
I am glad I came on Trulia because I think everybody is in agreement that it's pretty typical with short sales to have the buyer pay for it.

I think we love the home enough that we don't mind paying it. My other problem is our realtors stinky attitude when I questioned paying the fee (and really she hasn't had our best interest in mind while looking at home and trying to keep in our budget) It makes us not want to have her as our agent :(
0 votes Thank Flag Link Sat Sep 22, 2012
I just wanted to clarify, so you don't think your Realtor is being sneaky if she isn't. She doesn't get paid any commission on the fee you are paying for the short sale negotiator. These fees are fairly common with short sales, and the buyer is typically the only one paying the entire fee. The negotiator is hired to help the seller get out of some or all of the debts they will owe from selling the home for less than owed, and if the seller cannot get out of this debt or most of it, they will usually not be willing to allow the short sale, thus resulting in you not being able to buy the home.

However, you definitely should make sure the home fits at least 85% of what you are looking for and you should like the home. There is no perfect home that meets 100% of what you want, but, if you feel the price you are paying plus the cost of the fee combined is more than the house is worth to you, then you should reconsider. Good luck! I would love to know what you decide to do with the house. :)
Web Reference: http://www.PDXRockstars.com
0 votes Thank Flag Link Sat Sep 22, 2012
thank you both so much! I honestly feel like i can't completely trust our realtor because obviously the more we spend the more she makes. Do either of you know if it's at all common to ask for some compromise with this fee? Like maybe we split it 3 ways.....us and both realtors? It honestly only seems fair.

I had also heard from quite a few people that the negotiator usually gets 1% of the 6% commission as his payment?

Thanks again
0 votes Thank Flag Link Sat Sep 22, 2012
This is a something that is done with some short sales, not all. It is a benefit to the listing agent to have an experienced company negotiate with the Bank for them.

If you are not totally in love with the home and aren't willing to pay the fee than I would find another home to buy.

Make sure that when you are looking that you let your Realtor know that you aren't willing to pay the fee in the future and he or she will make sure to ask the lisitng Realtor if these costs would be involved before you submit an offer.

Best of Luck in your home search.
0 votes Thank Flag Link Sat Sep 22, 2012
Hi - the role of the negotiator is to work with the seller and the seller's bank with your offer to create a win/win situation for all. They work with the seller's bank to try to get them out of any further obligation for the deficit. As an incentive to the buyer to ride out this lengthy process - your benefit will be that you get the home for 10 - 12% under fair market value. Some listing agents negotiate their own short sales, but these take alot of time so those Realtors that handle very many of these will either use a company that charges a fee or they will have a negotiator that works as part of their team like I do and pay them out of the listing commission. I've seen these negotiating companies charge anywhere from a small fee to as much as $6000. Sellers do not have the funds to pay these fees so buyers have to be willing to pay that fee if they want the home and that should be disclosed to you upfront before you write your offer. Most buyers aren't too keen on paying this fee and I've seen homes sit for sale for 2 years and sell for pennies because no one would buy the home and pay that fee. You have to decide if the cost of the home plus the fee is worth it to you, because on listings using these paid negotiators - it is not negotiable to not use them and pay the fee.

As for a grace period on a short sale - until you have approval in writing from the seller's bank(s) that's acceptable to you, you have the right to withdraw your offer at any time. So - sounds like your Realtor is giving you correct info about the fee. If you have any other questions - we'd be happy to help. We run a ton of short sale listings at all times - however I have my own negotiator that works for me.

Best of luck!

Kelly Gebler, Principal Broker/Owner
Cornerstone Group NW @ Keller Williams Realty
0 votes Thank Flag Link Sat Sep 22, 2012
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