Who pays for short sale facilitators/negotiators? I put an offer on a short sale home 8 months ago that is being worked on by a short sale

Asked by Orlandohomebuyer, Orlando, FL Mon Nov 23, 2009

facilitator that the listing agent selected. I never selected (or even got the chance to do so) this company/person; however, the listing agent says I need to pay their fee. Apparently, she says she sent a disclosure to my Realtor when the process began, but it was never received, and therefore never signed.

If I chose not to pay for this service, can the listing agent “cancel” my offer?

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8
, ,
Wed Dec 2, 2009
Can the short sale facilitator also be the listing agent and collect outside fees over and above the real estate commission?
0 votes
Alys Esmond, , Orlando, FL
Mon Nov 23, 2009
When you and your Realtor submitted your offer to purchase, you set out very clear terms and conditions for how YOU wanted the transaction to proceed. Or at least how your agent wrote how you want the transaction to proceed.
There are a couple of ways that you could be responsible for this fee:
Did you sign a buyer-brokerage agreement where you agree to pay your agent a minimum percentage? The list agent could just lop the shared commission off and that agreement could force you to reimburse the difference in the reduced commission to your agent.
Did your agent include the MLS Broker's Synopsis as an addendum to your offer? If that negotiation fee is disclosed on the MLS form and you initialled it, you've agreed to that condition and could be locked in.

Now, the disclosure that was sent to your agent could be problematic, even if it wasn't signed. Your agent is required to have disclosed that to you, and if he didn't, it still doesn't change the fact that you are in a contract, so any backing out on your part will probably lead to an escrow dispute.

Here's how the process should have happened: You submit your offer. The seller needs you to pay closing costs, so will not sign the offer (and thus making it a binding contract) until you have signed the addendum they send you, you sign negotiation fee addendum and proceed to an executed contract from the buyers, or you disagree and cancel your offer.

I wish you luck,
short sales are not necessarily bargains and they're hard work.

Alys Esmond
Century 21 Professional Group Inc.
(321)695-5593
0 votes
Kevin Strawt…, , Saint Cloud, FL
Mon Nov 23, 2009
Hate to say, but negotiators are hit and miss. You must have trust in your agent that they have provided you the option with a good negotiator and this is at your expense. Not as sure of how you got ahold of yours. We only use ours when we feel it is necessary and many contracts flowing to ensure each offer is treated with the same respect. However we are our own negotiators. Also what may hamper the deal is the bank that the agent and negotiator is working with.
0 votes
Rick Aguirre, Agent, Orlando, FL
Mon Nov 23, 2009
OHB,
My Esteemed Colleagues all bring valuable insight to this question. Each deal is different and each 3rd party negotiator is different.
Some have the lender/seller pay others have the buyers pay a portion.
It really does depend.
Realtor Rick
0 votes
Mark LeMenag…, Agent, Lake Nona Orlando, FL
Mon Nov 23, 2009
Unfortunately this illustrates one of the problems with short sales. One more time -- SHORT SALES ARE USUALLY A WASTE OF TIME. Less than 25% will ever be closed. A buyer should NEVER agree to pay the fee of a negotiator. Short sales always come down to the knowledge and experience of the listing agent. If they farm out the most important part of the process then how much knowledge and skill to you think they have? My broker's advice is clear, if there is a negotiator, then walk away.

If you want to pursue this then I suggest that you contact the FBI's Florida real estate fraud team. (Yes, there is one.)

Sorry not to be upbeat, but wating 8 months should have sent off alarm bells.
0 votes
Jacqueline C…, , Orlando, FL
Mon Nov 23, 2009
I too have faced this dilemma with a first time homebuyer I was working with. I also agree with your position that the buyer should have an opportunity to negotiate or decide whether they want to pay, what I consider, a Seller's side fee.

I don't know if they listing agent can cancel your offer but I would ask her if the bank will pay for the fee or if the agent or agents are willing to split the fee 3 ways to help make the deal work.

Good luck,
Jacqueline Clarke
Down Payment Assistance/Rehab (203k) Loan Specialist
Enterprise Mortgage Group, LLC
1850 Lee Road, Suite 140
Winter Park, FL 32789
Direct: 407-739-3853
Fax: 407-951-8886
0 votes
Gay Middleton, , Orlando, FL
Mon Nov 23, 2009
OHB

These days most agents are using either a title company, attorney or a paid facilitator to complete the short sale for their sellers. Most agents do not have the staff or time to follow up on the negotiations by themselves.

I agree with previous agent in that all fees should be disclosed upfront before you enter into a contract for purchase. I would check with your agent. If your agent did not present the form to you then that agent may be liable and may agree to pay the fee or split it with you. After all you were told that it was sent to your agent. What happened to it.? Someone is liable. The selling agent should prove via email or fax copy that it was sent over to your agent. You may try and negotiate with your agent for payment of this fee, since you did not agree to it. That is one answer.

You may agree to pay it, that is one answer. The selling agent may agree to pay since they should have to prove they sent it over. That is another answer. Obviously you get the picture that someone will have to pay the fees for the facilitator. This area of Real Estate is not currently being regulated. It is all so new. I am sure with time rules and regulations will come into play with guidelines for these situations.

That being said, may I ask if you if you have an expiration date for your offer? Just as a note aside, all buyers of short sales should consider putting an expiration date for the third party approval. These kind of transactions could tie you up for many months and many things can change in those months. Typically the current standard is 45 days for third party approval and then when that point passes you and seller can agree to extend it along month by month or for as long as you wish to stay in the contract. That is a much better approach than to be obligated to a contract until the end of time and possibly lose your escrow money in process. My last short sale, we extended it two or three times until if finally closed.

If you run into any changes of circumstances (such as this facilitator cost) you can opt out at the expiration date. Just something to think about. I hope this helps. If you require further info or help I will leave my contact information for your convenience.

Regards and thanks for the questions
Gay Middleton
Realtor*Moving You in the Right Direction
gaymiddleton@orlandohomeresales.com
407-493-3699
Web Reference:  http://www.gaymiddleton.com
0 votes
Melitza Perez, Agent, Kissimmee, FL
Mon Nov 23, 2009
Orlandohomebuyer,

Normally fees are negotiated and advised of before an offer is made. However, it is not uncommon for these fees to be picked up by the buyer since they are receiving a bargain from the get go. Can you cancel your offer? You can always cancel an offer; however, you may be at risk of losing your Escrow Deposit. You may confirm that with your Real Estate Agent.

Good Luck with your hunt!

Regards,

Melitza Perez
Keller Williams
407-729-6655
melitzarealtor@gmail.com
0 votes
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