Home Buying in Macungie>Question Details

Jsmith, Home Buyer in Macungie, PA

How is it possilbe for so many realtors to use "short sale negotiators" to sell short sales? There are no guarentees on time frame and

Asked by Jsmith, Macungie, PA Sat Feb 19, 2011

there is a fee for the service ($2000-$4000). It has been warned online about these "short sale scams" and I am just wondering how so many are getting away with this in the Lehigh Valley. It is taking advantage of the situation and is unethical.

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Hello JSMith,

What is the scam that you are referring to? The buyer presents an offer to the seller and the seller can choose to use a short sale negotiator. In order to protect their commission the negotiator can charge a fee for service from the buyerr because if the fee is collected from the seller it is more likely to be negotiated away by the lender. However, if you present an offer for $100,000 and the seller counters with $98,000 and $2000 to the negotiator, exactly what has it cost the buyer. The negotiator protects the sellers interests and the likelihood of the deal getting done dramatically increases. Most short sales fail because they are not handled propertly. There is no reason for a bank to hold on to a property that is costing them money. Obviously the purchase price has to be reasonable whether it be a HAFA or traditional short sale. At the end of the day it is the bank who is the one paying for the negotiator as all of the costs of the purchase are paid before the bank gets iot's money. I guess if the fee is charged up front and the deal is never consummated then you have been scammed but most negotiators are only paid at settlement.
1 vote Thank Flag Link Sat Feb 19, 2011
Don't fall for it. The short sale negotiator is part of the agents team. It's just a way for them to make more money. I have a team and have successfully negotiated short sales without charging for it. If you need help selling your house or buying one feel fre e to give me a call.

Sean LaSalle
Weichert Realtors
1 vote Thank Flag Link Sat Feb 19, 2011
Wow great question. I could write a book on what I think about this process but also feel for some of the agents like myself that work these deals. I started them in 2008 trying to help a family member and the term" short sale" wasn't even really known. The long and the short, agents get paid based off the commission but also after a split with the broker and a lot of times paying various fees. The whole deal doesn't go to them and as we are self employed we have tons of our own expenses so most of us have to work extremely hard to make it. I can tell you that the banks limit the amount of fee's or % a Realtor can charge for services and because short sales can take so much time and effort agents really should get paid more (by the banks) so many have went to 3rd parties to process these short sales to take the load off so they can spend more time doing the job of helping people find and sell homes. On the other hand you are right, some agents choose to pay someone in there office to do the paper work for a fee and then pocket the rest. Here's my opinion, if you tell your Seller the truth and they agree it this shouldn't be an issue, I personally have never charged extra and have just chalked it up to the cost of doing what's best for our clients in this market and look forward to the next hurdle that will come up. Lastly and this is IMPORTANT as I'm sure I'm not alone, when I have a buyer I'm working with and there are say 3 homes in an area they want to see I will point out to them that 2 don't have that fee and the 1 does and you can bet that property with the fee goes to the bottom of the list they have every time. This is a big problem as it is a real shame for those people trying to sell a home in this market that are in trouble and just trying to stop a Foreclosure. My advise find a good agent with a great heart for his/her clients and DON'T buy into the agent on the radio! Best of luck and blessings!
0 votes Thank Flag Link Sat Sep 1, 2012
While there surely may be internet scams out there, there ARE legitimate short sale negotiators. Some sellers and/or REALTORS(R) with seller agency may exercise their right of choice to utilize them. If you are looking to purchase a home, it is important to interview several agents and decide who you feel would best represent you in a Buyer Agency relationship. If your intent is to purchase a home being offered for sale as a bank owned (REO) property, as a short sale, or that is in foreclosure, you'll want to find an agent who has measurable experience in that arena so that you feel comfortable that you'll be best represented. If you'd like to speak with someone who can further provide practical answers to more of your questions like this, I've been working with these types of properties for years; you're welcome to call me to talk further. Faith Brenneisen, Keller Williams Real Estate, KW: 610-435-1800 x5109 or cell: 484-695-0932.
0 votes Thank Flag Link Sat Feb 19, 2011
I would suggest you find an agent that is trained in Short Sales. They would be able to negotiate with the bank without the help of an outside company.
0 votes Thank Flag Link Sat Feb 19, 2011
There are scams out there, but there are also legitimate short sale negotiators who do a good job. And they don't always charge an up front free. There are negotiators who only get paid when the short sale is completed (it can be part of the negotiations, and paid by the bank). Besides, as a home buyer, you shouldn't be paying anything for the service. This is usually paid by the seller.
0 votes Thank Flag Link Sat Feb 19, 2011
Yes there are many who use negotiators; but there are some who don't. All I can suggest is that you interview agents who can meet your needs and requirements.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Sat Feb 19, 2011
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