Angela, Home Buyer in Orlando, FL

With short sales, is it normal for the seller to require buyer to pay over $2000 in processing fees?

Asked by Angela, Orlando, FL Sat Jan 7, 2012

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Angela it is not normal, it is greedy. All fees for selling and negotiating should be paid from the sellers side and proceeds from the sellers bank. I commonly use a professional negitiator when listing and negotiating short sales and the cost never gets passed on to a buyer. Your buyer brioker shoudl assist you in negotiting this fee or moving on.
Web Reference: http://www.ScottSellsNH.com
2 votes Thank Flag Link Sun Jan 8, 2012
This short sale is empty, no tenants nor owners living there, and the list price has been previously approved by the lender. I am bidding the list price plus willing to pay half of the processing fee.
1 vote Thank Flag Link Sun Jan 8, 2012
Thank you all for your advice. We are negotiating a lesser amount, but we LOVE the property so it will be worth it in the end.
1 vote Thank Flag Link Sun Jan 8, 2012
That sounds very hopeful! You may want to go back and visit the property occasionally to see if a tenant has moved in. I've seen that happen, too, an unscrupulous seller will rent out the property to an unsuspecting tenant "after" they get a contract. The tenant may refuse to move out, too!

One other hurdle is if the property wasn't the seller's primary residence they could end up with a substantial income tax liability if they are forgiven the loss on the sale. On a primary residence there are certain exemptions. If the seller discovers they could have a significant amount of income tax owed they must just get a modification and keep the property as a rental until the market recovers.

It's not your worry or responsibility to inform the Seller of his potential tax liability and I have seen many Realtors and Sellers who clearly have made foolish recommendations with respect to short sales.

Hopefully you will have smooth sailing.

Good luck!

All the best,
Alma
0 votes Thank Flag Link Sun Jan 8, 2012
Hi Angela,

Also don't FALL in LOVE... unless the price and seller have already been previously approved.

You see, until/if the Seller AND the Price have been approved you may not end up getting the house at the price you think.

So, bottom line is you need to continue to search for a property that is truly available up until the day you receive the short sale approval letter in your hands.

Also consider getting an FHA 203k Streamline fixer upper mortgage so you can buy a bank owned fixer upper an include new paint, carpets, even granite counters and/or hardwood flooring. It's difficult to see past the UGLY bank owned properties but at least you will get a better bargain than a short sale an also have a definite closing date.

You may have to wait 6 months or longer for the short sale to close if the owners want to drag out the process to live rent free for as long as possible or if they're renting it out and collecting "free money". If there is a tenant in the property they may also get a destructive pet that may damage the cabinets and flooring. Also appliances, light fixtures and window treatments may be missing by the time you close. And plan on the possibility that the house may be left without utilities during the summer (if you aren't closed by then...a real possibility) and accumulate mold!

So, sorry to be a pessimist but you have to be prepared for the pitfalls with buying a short sale.

All the best,
Alma Kee
http://www.SoldOnTampa.com
0 votes Thank Flag Link Sun Jan 8, 2012
Hi Angela,

Unfortunately there are some Realtors who may attempt to extract extra money from a buyer on a short sale.

Also there may be a "negotiator" fee but I believe that fee can only be paid to an attorney or licensed mortgage broker.

It's sleazy in my opinion for a listing agent to engage in this type of practice but it's probably why the house hasn't already been sold to another buyer and if you want it bad enough then you'll probably have to pay it.

All the best,
Alma Kee
http://www.SoldOnTampa.com
0 votes Thank Flag Link Sun Jan 8, 2012
Hi Angela,

Another thing I forgot to mention in my previous post. Talk to your Realtor and let them know you want to negotiate the prices down to a lower amount.

Nadine Mauro
Highlight Realty
561-414-0864
NadineSellsHouses@gmail.com
http://www.floridahouseseller.com
0 votes Thank Flag Link Sat Jan 7, 2012
Hi Angela,

There are often cases where the cost of a professional (usually an attorney's office), will not be paid by the seller's lender. If the seller doesn't have any money the costs will be passed on to the buyer.

The question comes down to: Is the property worth the price with the extra $2,000 addition?

These fees are usually paid when the property closes.

If they are asking you, the buyer, to pay any money upfront I would run in the opposite direction.

I hope everything turns out in your favor.

Nadine Mauro
Highlight Realty
561-414-0864
NadineSellsHouses@gmail.com
http://www.floridahouseseller.com
0 votes Thank Flag Link Sat Jan 7, 2012
Hi Angela - I'm not sure anything is considered "normal" when it comes to short sales. Perhaps this is a fee for a Short Sale Service Provider to expedite the purchase package with the bank(s). You will want to get the advice of your Realtor or that of an attorney. Especially if you are paying a fee up front and you don't have an approved offer by the bank. Be sure you know what you are paying for and if you believe it provides you the value you need and want.
0 votes Thank Flag Link Sat Jan 7, 2012
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