CA DRE 01338444
Professional Attention and Real Results
Seven Gables Real Estate
CA DRE Lic # 01354281
Without being privy to any other information, it appears to me that you have some negotiating to do with the listing broker, to the tune of a $10,000 reduction in his negotiating fee. Charging $14,000, in addition to earning a sales commission, ( Which might be anywhere from 2.5% to 3.5%, unless he is the ONLY agent involved.) is OUTRAGEOUS!
This sounds like a transaction with an attorney involved, which tends to blow expenses WAY out of whack.
I have personally witnessed such an attempted transaction of the $650k price range - I say "attempted", because the $25k in attorney fees, which they wanted to foist off on a prospective buyer, killed that potential sale, and the lender ended up foreclosing on the property - wiping out ALL the other liens, including the attorney, except that the attorney probably still had recourse against the poor seller, whose house got taken away from him.
Back to your situation, $14k is a RIDICULOUS fee to have to pay in order to buy a $400k house. In addition, it probably has to be out of pocket, over and above your down payment, making it even more ridiculous. As another poster suggested, the "going rate" for short sale negotiations is 1% of the purchase price, and THAT is usually shared between the two brokers. ( 6% listing, 1% to the negotiator, and 5% split between the agents.)
It sounds like YOU should probably get some legal advice, before you go any further in this transaction.
Good luck in sorting things out.
The most that should be paid is 1%. Something doesn't sound right. The 1% often comes out of the commission split but can be added if needed. Make sure all monies are disclosed to your lender and paid through escrow.
At this point, you probably need to push back and hammer on the short sale lender and/or the agents involved to get the fees down to where you're satisfied. Stick with written negotiations from now on.
Real estate fees are not set but something you have to work out with your listing agent. The short sale lender has to approve all the fees being charged. You can ask for an estimated buyers closing costs or HUD statement which itemizes all of the fees in the sale which is something the short sale lender will require. The title company can provide these documents.
You can go to http://www.CentralValleyHomes.com for more information on short sales.
Prudential California Realty