Ever Heard “Buyer to Pay Professional Short Sale Negotiator Fee?” Just Say NO.

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Ever Heard “Buyer to Pay Professional Short Sale Negotiator Fee?” Just Say NO.

The Professional Short Sale Negotiator – a New Face in the Real Estate Cast of Characters

An exhaustive (as in it pooped me out) study of Short Sale homes for sale in Orange County CA uncovered a rising trend in the number of Short Sale listings with the terms “Buyer to pay for Professional Short Sale Negotiator Fee of 1% of the sales price.”  What in the world is going on here?  This is just wrong on so many levels – let me outline just a few.

Wrongness Level 1. Isn’t the Short Sale Listing Agent a Professional Short Sale Negotiator?

That’s our job.  When a Realtor agrees to help a distressed home owner sell their home for less than what they owe the bank, that Realtor has the fiduciary responsibility to negotiate on behalf of the seller, their client.  That includes negotiating EVERYTHING on behalf of their client.  By definition, they have signed a contract to be a Professional Short Sale Negotiator.  How can they hand that fiduciary responsibility off to anyone else? Let alone ask a buyer to pay for it?

Wrongness Level 2. What makes anyone a Professional Short Sale Negotiator?

Nothing but self proclamation.  There is no licensing process.  No college degree.  No trade school, match book cover mail order program, no standard of conduct, no Errors and Omissions insurance. Not even a Boy Scout Merit badge.  Print up some cards, hang out a shingle, and beat your chest.   This is pure American entrepreneurship at its finest – which I love very much. This particular brand of Creative Capitalism raises my Buyer Beware antennae to about 40 stories. How about yours?

Wrongness Level 3. What does a Professional Short Sale Negotiator do?

Well, all I can think of is scan, copy,collate and  make phone calls.  And more phone calls.  And email.  Seriously.  If you don’t get that the bank is in control and everyone else is just trying to move them along like the Norwegian Curling team in their outrageous pants sweeping the ice in front of a giant stone, you are hallucinating.

Wrongness Level 4.  The Big Kahuna.  Why should the home buyer pay for this?

This fee can’t be folded into the loan.  It’s hard cash money the buyer is being ordered to pay to someone he never hired, probably will never meet, and doesn’t even know what he’s actually doing. In addition to all the other buyer costs like Escrow, Title, Appraisal and Inspections.  But unlike those other fees, it’s not tax deductible.  The buyer didn’t hire this Professional Short Sale Negotiator.  Didn’t vet him.  Doesn’t have a contract with him.  No Service Level Agreement has been signed.  No disclosures have been made about the relationship between the Seller, the Seller’s Realtor, the Broker, or the Escrow company and the Professional Short Sale Negotiator.  Pretty bad deal, if you ask me.

My Promise to all my Short Sale Sellers

I have never and will never defer the negotiation of your sale to a Short Sale Negotiator – Professional or otherwise. And have never and will never charge anyone anything extra for doing my job.

My Promise to Short Sale Buyers

If you ever make an offer on a home listed with the terms “Buyer to pay for Professional Short Sale Negotiator Fee of 1% of the sales price”  – We will counter with “Buyers’ Agent to Negotiate Short Sale in Lieu of Professional Short Sale Negotiator for a fee of 0%.”

I’m Leslie.  Just keeping it real in Orange County Real Estate.  Call me when you want me to do my job for you. 949-678-3373

Comments
  • Leslie Eskildsen

    Here’s the email comment I received from an actual Short Sale Negotiator – hopefully you can see my comments after his – should be obvious 😉

    Hi Leslie,

    I happened to came across your article and really enjoyed it. However, I do have a few issues that I would like to address with you:

    1. Wrongness Level 1. Isn’t the Short Sale Listing Agent a Professional Short Sale Negotiator?
    It is true that once any agent signed the purchase contract they need to handle it professionally. However, under an agent and or broker they can have as many assistant who can help oversee the process as they please. It is great that you can do all keep track of everything personally. However, calling someone unprofessional just because they have someone help them to do minor work! I did not call anyone unprofessional – just it’s the listing agent’s job. If they want to hire someone to help – as you clearly indicate they have the right to do, go right ahead. JUST DON”T ASK THE BUYER TO PAY FOR IT.
    2. Wrongness Level 2. What makes anyone a Professional Short Sale Negotiator?
    Does a degree really make someone a professional? Why someone would needs a degree to work? A degree is nothing but piece of paper stating that the individual has demonstrated the minimum requirement in the work field. Bill Gate never graduated but still being able excels in his work. Some of our presidents never graduated with a degree yet sill able to carry out their duties well. Does not having a paper that certified an individual a Short Sale Negotiator mean they are unable to do it well? NO My point was that this is a self-appointed title. No E&O or license, let alone a degree or a merit badge. People need to be aware and be wary. And again – they buyer should not be asked to pay.

    3. Wrongness Level 3. What does a Professional Short Sale Negotiator do?
    A Professional Short Sale Negotiator does more than just “scan, copy, collate and make phone calls. And more phone calls. And email.” Just to give you an example. I have a client that has three properties and two of them have equity. They decided to short sale one the one that does not have equity. After reviewing all their incomes they are qualified for a short sale. Yet, the lender wanted to PUT A LIEN on the other two properties. I was able to negotiate with them for a NO DEFIENCY JUDGEMENT and No Lien on any of the properties. Tell me if this is a good deal for the seller? I hope you would say yes. Once you accept a listing, is it your responsibility to maximize the benefits of the seller? YES! A professional short sale negotiator does the following: they expedite the process and shorten the length of time that it would take for a short sale transaction to go through. They thoroughly negotiate for a NON DEFIENCY JUDGEMENT for the seller. They should be able to know exactly what each lender is looking for as they are working with the lender. Now ask yourself this, will collecting, faxing, and making phone calls is going to accomplish this task? If it is that easy, then a real estate agent will not be needed. Again, great for the seller – don’t ask the buyer to pay for your fee. That should stay with you, the listing agent and the seller.
    4. Wrongness Level 4. The Big Kahuna. Why should the home buyer pay for this?
    You are correct that the buyer should not pay for the fee. However, it is never required for a buyer to pay for the short sale negotiation fee. Honestly – did you read my blog? It is in the private agent remarks in an increasing number of Short Sale listings in Orange County. However, here is a question for you. Is it ever requiring for a seller to credit back for closing cost and other fees that a potential buyer might be requesting? NO, it is never a requirement, however, some of the seller agreed to do so through the process. Sure – seller to credit closing costs is an entirely different topic – read my blog on that here: http://www.whatagentsfeartellingyou.com/how-to-save-on-closing-costs-ask-the-seller-to-pay/ Don’t mix up PSSN fees with closing costs. Please. Something for this fee, it is a term that is being set up for whatever reason. If a buyer wants to purchase them property all parties need to come into an agreement. If the buyer does not want to pay for it, the buyer’s agent can pay for it out of their commission if he or she wishes. HA – not a chance, man! I never signed up paying the bill for this!
    5. My Promise to all my Short Sale Sellers
    It is great that you are able to do your own work and run your own shows. However, don’t make yourself a one man band. Everyone is out to make money in a reasonable way. You can pride and sell yourself in the way you want your seller and buyer to see you. Yet, I do not believe that you have never asked anyone to fax a document, answer an email, or call someone. There are two reasons for this: 1. you either do not have enough client to keep you busy. 2. You do not generate enough income to have an assistant or a transaction coordinator to help you out. Here is my advice for you: Promote yourself but do not intimidate someone else’s profession. Otherwise you will be receiving lots and lots of email like mine. OR, I DO HAVE A TEAM AND PAY THEM OUT OF MY COMMISSION TO HELP ME DO MY JOB.

    Wishing you and your family a happy HOLIDAY SEASON. It is always a pleasure working with you!

    Sincerely Thanks,

    Short Sale Negotiator

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